The introduction of the drip pricing provisions to the Competition Act, R.S.C. 1985, c. C-34 by way of Bill C-19 in 2022 has delivered a wave of proposed class actions challenging various ways Canadian businesses display prices and add-on fees. In July, the Federal Court issued its reasons for its first decision to certify a drip pricing class action in Deane v. Canada Post Corporation, 2025 FC 1194. The decision, currently under appeal, covers many framework issues for the offence of drip pricing and demarcates the boundaries between drip pricing and double ticketing. In this blog post, we will take a critical look at the Federal Court's reasons and analyze some issues that may be addressed in the pending appeal of this decision.
What is Drip Pricing?
As defined in the Competition Act, drip pricing is the act of representing a price "that is not attainable due to fixed obligatory charges or fees" other than sums imposed by an act of Parliament or the provincial legislatures (such as sales tax). For example, online booking fees added to the price of a movie ticket were found to be an example of drip pricing last year in Canada (Commissioner of Competition) v. Cineplex Inc., 2024 Comp Trib 5 (also under appeal in A-346-24).
As the Federal Court acknowledges in paragraph 84 of Deane, several requirements have to be met for a price representation to fall afoul of the drip pricing provisions: (i) the initially-represented price must not be attainable; (ii) the additional charge or fee must be fixed; (iii) the additional charge or fee must be obligatory; and (iv) the additional charge or fee must not be imposed by acts of Parliament or the provincial legislatures.
The Decision
The alleged drip pricing in Deane concerned the exclusion of fuel surcharges from Canada Post's display of the price of various delivery services on three of its online platforms, used by small business owners, large commercial customers, and individual consumers respectively. In the period considered by the motions judge, Canada Post imposed a fuel surcharge of between 13-26% of the price of a chosen shipping service. The entire purchase process was contained on a single page. However, customers clicked through four boxes that required them to: (i) enter their own location; (ii) enter the destination of the package; (iii) enter the type of package, dimensions and weight; and finally (iv) generated prices of various shipping service options that are then displayed. Once a shipping service is selected, a summary box of the customer's order at the top of the page will update to show the price of the selected shipping service, a customer discount if any, a fuel surcharge, an estimated total before taxes, estimated taxes, and an estimated total.
The plaintiff alleged that the omission of Canada Post's fuel surcharge from the price of the shipping service options in box (iv) amounted to drip pricing as "a representation of a price that is not attainable due to fixed obligatory charges" contrary to s. 52(1.3) and double ticketing contrary to s. 54 of the Competition Act despite the fact that all boxes were on the same page.She sought to bring this class action on behalf of people who used the relevant Canada Post online platforms and who paid the fuel surcharge.
The Federal Court found that all of the requirements for certification were met for the plaintiff's drip pricing claims under s. 52(1.3) of the Competition Act, treating many of the issues raised by the defendant as novel issues, preferring to finally determine them at a later merits hearing. The court's approach presents an obstacle to defendants at certification. Below, we highlight the key issues from the decision.
The Meaning of "Fixed" Remains Uncertain
In concluding that the plaintiff pleaded a reasonable cause of action for drip pricing under s. 52(1.3), the court declined to finally determine one of Canada Post's key defences: that its fuel surcharges were variable and therefore do not meet the "fixed" charge requirement for drip pricing. The court opined that "this issue is better left to the judge hearing the merits of the case and with the benefit of a full evidentiary record" (Deane at para. 53). Accordingly, at this time, what the "fixed" requirement entails for conduct to amount to drip pricing remains uncertain.
While the interpretation of the word "fixed" in s. 52(1.3) is a novel issue, Parliament deliberately exempted charges and fees that are not "fixed" from drip pricing (Deane at para. 84). By failing to grapple with this issue and instead deferring it to the common issues stage, the motions judge leaves the door open for drip pricing claims to proceed past certification without ever having to confront a necessary element of the offence.
Moreover in this case, the motions judge had apparently made the necessary findings of fact to determine if Canada Post's defence should apply. When analyzing the calculation of the fuel surcharge, the motions judge found that "the amount of the charge will also vary depending on the shipping service and package weight, dimensions, and destination" (Deane at para. 30). The motions judge concluded that Canada Post's fees were variable. The only further question that needs an answer is whether, as a matter of statutory interpretation, the "fixed" requirement for drip pricing excludes variable fees.
Although the court acknowledged "where a statute is central to the claim, courts 'should [not] shy away from engaging in statutory interpretation" and "pure questions of legal interpretation—even novel or disputed ones—can be decided and resolved" (Deane at para. 70) elsewhere in its reasons, the court nonetheless chose to defer a central statutory interpretation issue in this case—leading to significant uncertainty in this area.
In declining to adopt Canada Post's interpretation of the "fixed" requirement for drip pricing, the Court also appears to have conflated this issue with the analysis of the "obligatory" element of drip pricing in Cineplex. In this case, the plaintiff's response to Canada Post's defence was that the "fixed" element of drip pricing simply means that the add-on charges are "non-negotiable". The Court accepted that both interpretations are possible and concluded that this "is a novel issue, yet an arguable one" (Deane at para. 53).
However, the excerpts of Cineplex relied on by the court to reach this conclusion appear to conflate two different sections of the Competition Tribunal's decision. The court observed that in Cineplex the fact that different fees were charged to different categories of consumers "did not render the Online Booking Fee not fixed" and instead "[t]he question is whether it is obligatory for users who want to complete their purchase" (Deane at para. 50). However, this combines excerpts from two different parts of Cineplex and relies in part on the Competition Tribunal's analysis of whether the fees in that case were "obligatory", a different component of drip pricing than "fixed".
When s. 52(1.3) describes drip pricing as "making a representation of price that is not attainable due to fixed obligatory charges or fees" both words should be given meaning. The court in Deane appears to have conflated the two.
What "Representation of a Price" Counts?
Another point from Canada Post's defence that will likely be contentious on appeal is what "representation of a price" counts for the offence of drip pricing. Canada Post argued that there was no "representation of a price" that was not attainable because all displayed prices, including both the price of the shipping service and the fuel surcharge, appeared on a single page. Accordingly, Canada Post's price representations are an example of segmented pricing, akin to monthly invoices where "[t]he price is not provided to the customer drop by drop, but it appears in a one-time splash on a single page, with all components of the final total price described" on the single webpage itself (Zanin v. Ooma Inc., 2025 FC 51 at para. 433). The Federal Court previously opined that this was not drip pricing.
Despite the fact that all of Canada Post's price representations appeared on the same page, the motions judge concluded that "the Summary box discloses a second price with the fuel surcharge only after users have selected a service displayed at a first price in box number 4" and this arguably amounts to drip pricing under s. 52(1.3) (Deane at para. 58).
The court's conclusion raises a question about where the line should be drawn between segmented pricing and a "representation of a price" that is not attainable for drip pricing. Previously, the line appeared clear. Where all components of a price appeared on a single page, this was segmented pricing and not drip pricing. The Federal Court of Appeal may clarify the boundaries between these concepts.
Materiality of Price for Repeat Customers
The court accepted that an add-on charge of around 25% is arguably material to a consumer's decision to purchase and should therefore be addressed by the trial judge. The court continued that there is no categorical limitation of the drip pricing provisions of the Competition Act to first time customers and cites Cineplex for the position that an unattainable price is not unattainable only for a first time purchaser.
However, this appears to misunderstand Canada Post's argument about repeat customers. The significance of repeat customers, as Ms. Deane was of Canada Post's services, is the fact that they choose to return and continue using a service after knowing that any initial price representation is subject to add-on fees. The argument is not that repeat customers are per se excluded from drip pricing but rather that their return demonstrates the price representations and add-on fees are not material to their decision to purchase regardless of what percentage of the total price the fees amount to.
The Harm Caused by Drip Pricing
Deane accepts that to satisfy the causation element for a drip pricing claim at certification, plaintiffs may assert that customers would have paid the lower unattainable price representation but for the fixed obligatory surcharges that are imposed. Accordingly, drip pricing harms consumers by depriving them of the lower price representation and therefore "the customer suffers loss or damage equal to the difference between the unattainable price and the price paid" (Deane at para. 68).
This reasoning assumes that because a lower price representation is made, a consumer could have paid this price and was deprived of the difference. The court's counterfactual world without the additional charges is one where businesses simply charge the lower represented price. However, there is no reason to believe that businesses would lower their prices simply because they can no longer add charges and fees later in a purchase process.
The more likely counterfactual world is not one where the "fixed obligatory charges or fees" are not charged, but rather one where the "not attainable" price representation is not made. In this scenario, the total price that the consumer pays remains the same, the difference is when the customer is informed of the full price, not the monetary difference between the two prices.
It remains to be seen how this type of harm will (or even can) be quantified in future cases. However, neither causation theory raised by the plaintiffs in this case pleaded the harm they suffer from being presented with a price separated into components instead of an all in price. For now, following Deane plaintiffs will likely continue to plead that causation can be met by simply pleading that customers would have paid the lower represented price but for the "fixed obligatory charges or fees".
The Difference between Drip Pricing and Double Ticketing
Finally, in dismissing the plaintiffs' additional claims for double ticketing under s. 54 of the Competition Act, the motions judge explained the difference between the offences of drip pricing and double ticketing. Most class actions in this area allege that a defendant's conduct amounts to both drip pricing and double ticketing. Since both offences are concerned with multiple price representations there is some resemblance in how they are pleaded.
Deane definitively concludes that the same conduct cannot be both drip pricing and double ticketing. The motions judge opines that unlike drip pricing, in double ticketing "the price is not provided to customers drop by drop; rather, more than one prices are presented simultaneously" (Deane at para. 82). Double ticketing does not involve adding price components over the course of a sales process. Instead, it involves charging the higher of two or more prices presented simultaneously.
The motions judge also observed that s. 52(1.3) includes several clear exceptions to drip pricing including: where fees are not "fixed"; where fees are not "obligatory"; and where fees are imposed by acts of Parliament or the provincial legislatures. Double ticketing does not include these exceptions. Accordingly, if the conduct described in drip pricing (i.e. a lower price that is unattainable because of fixed obligatory fees resulting in a higher total price) is also double ticketing then exceptions to drip pricing will have no meaning. There will always be an offence even when a price is not "fixed", not "obligatory" or in fact imposed by an act of Parliament.
Key Takeaways
As the first of what will likely be many certification decisions over the coming years to deal with a s. 52(1.3) drip pricing claim, parties to these actions should take note of the following:
- Until a definitive interpretation of the "fixed" element of drip pricing is given, courts might follow Deane and continue to defer the issue to a hearing on the merits.
- Unless reversed on appeal, courts may view it as sufficient to plead that the harm caused by drip pricing is the difference between the all-in price and the lower unattainable price.
- There is no overlap between the offences of drip pricing and double ticketing under the Competition Act. The former concerns providing price components drop by drop over the course of a sales process while the latter involves charging the higher of two or more prices that are simultaneously presented.
This decision is currently under appeal in Court File No. A-253-25. The appellate decision may further grapple with these issues to provide a much-needed definitive assessment.
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