Canadian advertising law: from branding and packaging to billboards

Canadian advertising law regulates many aspects of how products are promoted, from branding and packaging to how they appear in grocery shelves or billboards. Aside from regulating what companies can do, it also provides avenues for consumers to complain about ads.

This article reviews key federal and provincial laws that make up Canadian advertising law. For more information, it's better to consult a Lexpert-ranked advertising and marketing lawyer.

How are advertisements regulated in Canada?

Advertising in Canada is regulated through a combination of federal laws, provincial laws, and industry self-regulation, says Laura Weinrib, a partner in the marketing and advertising group of Blake, Cassels & Graydon LLP.

Since there is no single law for it, advertisements and marketing practices in Canada are regulated by different laws. Together, these statutes and regulations form the framework of Canadian advertising law.

The different Canadian advertising laws

Below are some of the laws in Canada that are related to advertising and marketing:

• Competition Act: prohibits unfair competition, including false or misleading representations and deceptive marketing practices, among large and small businesses in the country
• Canada's Anti-Spam Legislation (CASL): regulates the use of commercial electronic messages, so that these would not be abused by marketing companies and advertisers
• Canada Consumer Product Safety Act (CPSA): imposes several prohibitions on certain products, and establishes the legal regimes on incident reporting, recalls, and corrective measures
• Personal Information Protection and Electronic Documents Act (PIPEDA): regulates the collection, use, and disclosure of personal information about an identifiable individual

"Provincial consumer protection laws also prohibit false and misleading representations aimed at individual consumers," Weinrib says. "There are also privacy laws, anti-spam laws and telemarketing laws that regulate various aspects of advertising."

These laws are particularly relevant given the surge in online advertising and associated scams:

For more information about these Canadian advertising laws, you can reach out to the best advertising and marketing lawyers in Canada as ranked by Lexpert.

Advertising code of ethics in Canada

Industry-led regulations are also part of Canadian advertising law. One of these is the Canadian Code of Advertising Standards (the Standards).

"Ad Standards, which is an industry self-regulatory body, administers the Canadian Code of Advertising Standards," Weinrib says.

The Code applies to all ads, whether they are made by a private or public body. However, the Code will not apply to the following:

• political advertising
• election advertising
• foreign media
• packaging, wrappers, and labels of products

While it is not a legislation, the Standards complements statutory regimes by regulating advertising content in Canada.

Are there special advertising rules for specific products or industries?

"Advertisers in a wide variety of industries must adhere to stringent, sector-specific federal and provincial laws that go beyond general advertising laws (although general advertising laws also continue to apply to such industries)," Weinrib points out.

She cites the following examples:

• Health Canada enforces strict laws regarding the advertisement of pharmaceuticals, tobacco and cannabis
• Canadian Food Inspection Agency enforces laws regarding the advertisement of foods

"Provincially, there are also specific laws and restrictions aimed at the advertisement of a wide range of products and services, including tobacco, cannabis, healthcare service and gambling," Weinrib says. "In addition, Québec maintains restrictions regarding the language of advertisements."

When collecting personal information

In relation to advertising, PIPEDA requires companies to acquire meaningful consent from consumers before collecting, using, and disclosing their personal information, especially when the information is used for targeted marketing.

Targeted marketing refers to personalized ads based on the information collected about an individual. An example would be an ad about smartphones, after searching for a specific smartphone in a search engine. This has recently been regulated because of the rising concerns about the invasion of privacy regarding digital marketing.

Cookie consent notices, commonly seen when visiting websites, also reflect the application of PIPEDA's provisions:

Advertising using emails and electronic messages

Canadian advertising law, specifically the CASL, regulates the use of technology for advertisements and marketing purposes, such as emails and social media interactions. It also prohibits flooding consumers with unsolicited commercial electronic messages when promoting a product or service.

What is spam under the CASL?

A spam text, email, or software may be either of the following:

• when a program is installed in a smartphone or computer without the owner's consent after clicking or accessing a spam message or spam email
• when false or misleading electronic representations are sent through an email, or through any electronic or digital means
• when one's personal information is collected by accessing a computer system or electronic device without the owner's consent

Prior consent requirement

Under CASL, advertisers and marketing agencies cannot send commercial electronic messages without the required consent of the recipient.

A consumer or receiver must also be able to easily unsubscribe from these commercial electronic messages. When doing so, they should not be charged for any cost they supposedly incurred when receiving these commercial electronic messages.

In addition, commercial electronic messages must include prescribed information, such as details identifying the sender.

Learn more about the CASL with this video:

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Advertising alcohol, cannabis, cigarettes, and gambling

Although these products are heavily regulated rather than outright banned, there are specific standards governing how they may be advertised. This includes the advertising of alcohol, cannabis, cigarettes, and gambling activities.

Example: How to advertise gambling

For instance, British Columbia's Advertising and Marketing Standards for Gambling under the Gaming Control Act (GCA) provides for the following rules when advertising gambling activities:

• must not be immoral nor obscene
• must not depict undue exploitation of sex, crime, horror, cruelty, and violence
• must contain a responsible gambling message
• must reflect the demographic targeted by the ad

In addition, the Standards also state that gambling ads must not:

• encourage people to play beyond their means
• imply the certainty of rewards or alleviation of problems
• present gambling as an alternative to employment
• use minors or persons who appear to be minors
• appear in media directed primarily to minors
• be based on themes or use language that are appealing to minors

Advertising of government activities

Provinces also have laws that regulate how government bodies should advertise their programs, laws, or policies. One example is an Ontario advertising law called Government Advertising Act (GAA). Under the GAA, it's required, among others, that:

• there should be a preliminary review of advertisements by the Office of the Auditor General before it's released to the public
• the advertisement has a statement that it's paid for by the Government of Ontario, and must be non-partisan

What are misleading advertising claims, and how can advertisers avoid them?

Weinrib says that the "Competition Act is the primary federal law prohibiting false or misleading advertising and is enforced by the Competition Bureau." In addition to prohibiting misleading advertising, she says that the Competition Act contains several more specific requirements on the following:

• prohibiting greenwashing
• regulating specific types of pricing and sales claims
• setting out requirements for promotional contests
• requiring substantiation of claims

What is misleading advertising?

"The Competition Act includes a general prohibition against making any materially false or misleading representation to the public for the purpose of promoting a product or business interest," Weinrib says.

"Such representations do not have to be false to be misleading; they can be technically true statements that create a false impression, or they may involve omitting crucial information."

Applicability of the Competition Act

The Competition Act has special applicability on several instances:

• it applies not just to "offline" advertising and marketing, but also when these are done online or through other technology
• advertisers or marketers outside Canada that conduct online marketing in Canada are also governed by the Competition Act

Penalties of misleading advertising

These prohibitions can result in either or both civil liability or imprisonment. Violators may be:

• charged with administrative or civil fines, or
• filed with a criminal charge depending on the determination of the Competition Bureau

"Penalties under the Competition Act can be imposed without a determination that any person was actually deceived or misled by the representation," Weinrib adds.

Tip for advertisers on misleading claims

To reduce the risk of being the subject of a misleading advertising claim, Weinrib says that advertisers should:

• substantiate all claims,
• be transparent particularly about pricing,
• understand that disclaimers and fine print should not contradict the main message of the advertisement, and
• use accurate images

How can lawyers help clients when it comes to advertising laws?

According to Weinrib, lawyers can help clients with advertising law in at least three ways:

1. Reviews during the early stages: "Lawyers can review proposed advertising concepts and promotional structures early in the development stage to assist advertisers and agencies in developing compliant campaigns and flagging areas of potential risk. They can also review specific advertising copy and visuals, minimizing the risk of misleading advertising claims."
2. All about contracts and agreements: "Lawyers can draft and negotiate agreements between advertisers and agencies, including influencer contracts and sponsorship agreements."
3. Dealing with advertising regulators: "Finally, lawyers can liaise with regulators like the Competition Bureau and Health Canada and represent and defend clients in inquiries and claims regarding alleged non-compliance."

For consumers: Reporting false advertising

Customers have many ways to report false or misleading advertising or any other violation of Canadian advertising laws:

• if an ad violates the Standards: file a complaint directly to Ad Standards through their online complaint submission form
• if an ad violates the Competition Act: submit an online complaint with the Competition Bureau for misleading advertising, or unfair or deceptive business practices
• if an ad violates a provincial law: a complaint may be submitted to the provincial or territorial consumer protection agency (e.g., Consumer Protection Ontario)
• if you receive a spam message or spam email: a report may be filed with the Canadian Radio-television and Telecommunications Commission (CRTC), indicating the spam's sender and message

It is also advisable to consult an advertising and marketing lawyer on the most appropriate remedy. In addition to filing complaints with regulators, court action may be an option, but a lawyer should evaluate whether a claim is viable before litigation is commenced.

Canadian advertising law: More than just putting up an ad

Canadian advertising law ensures fairness and protects consumers from deceptive practices. It governs various aspects of advertising, from digital marketing, spam messaging, to the collection of personal data. Whether you're a consumer wanting to hold companies accountable or a business who wants to comply with advertising regulations, advertising and marketing lawyers are there to help you understand these laws.

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