Last Minute Uncertainty for Registered Charities Under Canada’s Anti-Spam Law

Canadian registered charities seeking to comply with Canada’s new anti-spam law (CASL) recently received some disappointing news. CASL is a very complex law and many important issues remain ambiguous and uncertain. Several registered charities under the Income Tax Act, however, had thought that they could avoid some of the turmoil that non-profits and businesses were facing as they sought to address the implications of compliance with a regulatory regime that regulates all commercial electronic messages. Registered charities had obtained, under the Industry Canada Regulations published in December 2013, an exemption from the regulation of commercial electronic messages provisions of CASL (Section 6) for messages sent for the “primary purpose” of fundraising.

While this exemption was good news for charities, uncertainty remained about what “primary purpose” might mean and how “fundraising” was to be interpreted.

Imagine Canada describes itself as “A national charitable organization that supports charities and nonprofits so they can support Canadians and communities they serve”. Imagine Canada reported that it had entered into discussions with Industry Canada, one of the regulators responsible for certain aspects of CASL, to seek clarification on aspects of how registered charities would be treated under CASL. On June 5, Imagine Canada issued an “Issue Alert” on its website and to many registered charities on how they believed charities’ activities would be treated under CASL. Many charities responded favorably to such guidance, which gave them a direction forward in planning their CASL-compliance activities.

Unfortunately, the desired certainty may have been illusory. On June 25, less than a week before CASL’s commercial electronic message regulations come into force, Imagine Canada issued a further “Issue Alert” indicating that the CRTC advised that they disagreed with the advice provided by Industry Canada officials. A link to that alert is here:

Further, the CRTC did not give specific guidance on their interpretation for Imagine Canada to disseminate to Canadian charities. Rather, according to the “Issue Alert”:

“The CRTC has yet to issue official guidance on the exemption as it applies to charities and has indicated that an FAQ document pertaining to registered charities will be issued in the coming weeks. [Note: After CASL comes into force.] As such, the full extent of the discrepancies between the interpretation provided by Industry Canada, the authors of the legislation and regulations, and the CRTC, may only become clear after the legislation takes effect.

We have written to the CRTC asking to meet with them immediately to obtain clarification and guidance to assist charities.”

It is very unfortunate that registered charities, like non-profits and commercial concerns in Canada, will need to await clarity on many open issues under the new law until after the law is in place.

It is hoped that the uncertainty created by the new law will be given prominent consideration in enforcement decisions by the CRTC in respect of the compliance efforts of legitimate businesses, nonprofits and registered charities as they seek to navigate its requirements.



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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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