Canada: The CRTC Determines That Canada's Anti-Spam Legislation Is Constitutional And Reduces The First Penalty Handed Out Under The Legislation To $200,000

On October 19, 2017, the Canadian Radio-television and Telecommunications Commission (CRTC) handed down two decisions1 in response to CompuFinder's challenge to the notice of violation issued under Canada's Anti-Spam Legislation (CASL).2 As reported in a previous legal update, the notice set out a penalty of $1.1 million.

CompuFinder raised a challenge to the constitutionality of CASL, arguing, among other things, that CASL: (i) had not been validly enacted by the federal Parliament and (ii) contravened the Canadian Charter of Rights and Freedoms (Charter) by infringing CompuFinder's freedom of expression and other protections conferred by sections 7, 8 and 11 of the Charter. CompuFinder also challenged the amount of the penalty.

In its two decisions, the CRTC determined CASL to be constitutional and confirmed CompuFinder's violation of CASL. However, it reduced the amount of the monetary penalty to $200,000.

Constitutionality of CASL

In its first3 decision, the CRTC determined that CASL was intra vires the legislative powers of the federal Parliament, under the general trade and commerce head of power of subsection 91(2) of the Constitution Act, 1867. The CRTC also determined that, although the impugned provisions of CASL violated the freedom of expression guaranteed by section 2(b) of the Charter, the violation was justified under section 1 of the Charter. Lastly, the CRTC determined that sections 7, 8 and 11 of the Charter did not apply because the proceedings under CASL were administrative and not criminal or penal in nature, despite the potential for hefty penalties.

Violation of CASL and monetary penalty

In its second decision,4 the CRTC determined that CompuFinder had committed the offences described in the notice of violation, but that the imposed amount was unreasonable under the circumstances. In arriving at this determination, the CRTC made a number of interesting observations regarding the interpretation of certain relevant CASL concepts.

"Business-to-business" (B2B) exemption

Relying on invoices and proofs of payment for single training sessions given to an individual within the recipient's organization, CompuFinder maintained that, owing to the "business-to-business" exemption, among others, section 6 CASL did not apply to the messages it had sent.

However, the CRTC determined that the mere fact that an organization paid for training on behalf of one of its employees was not sufficient to demonstrate an existing relationship that would allow for a complete exemption from CASL that would permit every other employee of the recipient to be solicited. Such invoices were, however, evidence of an existing business relationship with the employee who had attended that training session, and such a relationship could create implied consent to send commercial electronic messages (CEMs) to that employee, pursuant to paragraph 10(9)(a) CASL.

The CRTC thus made an important distinction between the business-to-business exemption (which provides that CASL does not apply to the sending of all CEMs to all employees, representatives or consultants of another organization if the organizations have a relationship and the message concerns the activities of the organization to which the message is sent) and implied consent (which is only valid for the sending of CEMs to a specific individual in an organization with whom the sender has an existing business relationship).

Unsubscribe mechanism

A key issue raised regarding CompuFinder's unsubscribe mechanism was that some CEMs contained two unsubscribe links, one of which was functional and the other of which produced an error when accessed. This issue created confusion and frustration among those who wished to no longer receive CEMs from CompuFinder. The CRTC stated that the inclusion of two unsubscribe mechanisms did not satisfy the CASL clarity requirements, particularly when one of the links did not work.

The CRTC's decision underscores the importance of having functional and easy-to-use unsubscribe links.

Implied consent

CompuFinder claimed that it had obtained the recipients' implied consent under paragraph 10(9)(b) of CASL because the recipients had conspicuously published their electronic addresses. The CRTC determined that the conspicuous publication exemption sets a higher standard of proof than the simple public availability of electronic addresses and only applies when consent can be reasonably inferred according to the other conditions of that provision, including the relevance of the CEMs to the person's business, role, functions or duties in a business or official capacity. In view of the circumstances, the CRTC determined that CompuFinder had not met the criteria.

The CRTC therefore determined that CEMs may not be sent to electronic addresses simply on the basis that the addresses are available on the Internet: for this exemption to apply, other conditions, including relevance, must also be met.

Due diligence

CompuFinder argued that it had demonstrated due diligence by implementing a comprehensive CASL compliance program. The CRTC observed, however, that some of those measures had been taken after the period of the violations and therefore had to be excluded from the analysis of this ground of defence. As for steps taken prior to that period, the CRTC noted that the company had not adopted written policies, ongoing audit and monitoring mechanisms and procedures for dealing with third parties to confirm compliance and had not provided adequate training to its employees. Consequently, the measures implemented by CompuFinder were not sufficient.

In brief, in order to establish a due diligence defence with respect to a violation, companies must take precautions by adopting measures consistent with those required by the CRTC. The CRTC also took this opportunity to confirm that the guidelines issued by it represent the minimum acceptable standard to ensure CASL compliance.

Reasonableness of the penalty amount

The CRTC found that CompuFinder had violated the CASL provisions, but reduced the penalty to $200,000. To determine whether the penalty was reasonable, the CRTC considered the factors listed in section 20(3) of CASL. In this regard, CompuFinder did not have any history with respect to any previous CASL violation. The company had not paid compensation to persons affected by the violations, but had not obtained any financial benefits tied to the violations. In ascertaining whether CompuFinder, given its financial position, had the ability to pay the initial penalty of $1.1 million, the CRTC pointed out that an organization's annual revenues should be considered, as opposed to its annual profits, because they are generally a better indicator of an organization's ability to pay. The CRTC also considered the following relevant factors: the general deterrence associated with a penalty, cooperation with the investigation, self-correction (i.e. the efforts made to comply with CASL and to correct deviations from the requirements as quickly as possible) and the proportionality of the penalty.

On November 20, 2017, CompuFinder appealed the two decisions to the Federal Court of Appeal.5 


3510395 Canada Inc., operating as Compu.Finder – Constitutional Challenge to Canada's Anti-Spam Legislation, October 19, 2017, CRTC 2017-367; 3510395 Canada Inc., operating as Compu.Finder – Violations of Canada's Anti-Spam Legislation, October 19, 2017, CRTC 2017-368.

2p;An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act, S.C. 2010, c. 23.

3  3510395 Canada Inc., operating as Compu.Finder – Constitutional Challenge to Canada's Anti-Spam Legislation, supra Note 1.

4  3510395 Canada Inc., operating as Compu.Finder – Violations of Canada's Anti-Spam Legislation, supra Note 1.

5  Court Nos.: A-382-17 and A-383-17.

About Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global law firm. We provide the world's preeminent corporations and financial institutions with a full business law service. We have 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

For more information about Norton Rose Fulbright, see

Law around the world

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions