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Government Watch News



Government Watch
  (January - February 2016 Report)
 


TOPICS IN THIS ISSUE:

Wynne Government Pushes Back Start of Ontario Retirement Pension Plan  
• New Waste-Free Ontario Act Means Big Changes for Province’s Recycling Stewardship Programs
• Do You Import or Manufacture Products Containing Mercury?  If So, New Federal Regulations May Apply to You!
TPP Deal Signed, But Years of Negotiations Still to Come
• Federal Government Moves to Cool Hot Housing Markets with New Down Payment Rules
Is Canada’s Anti-Spam Legislation (CASL) Missing the Mark? 
 
 
                    
WYNNE GOVERNMENT PUSHES BACK START OF ONTARIO RETIREMENT PENSION PLAN (ORPP)      

The Ontario government will delay the start of its signature Ontario Retirement Pension Plan (ORPP) by a year in a bid to ease the fears of businesses.

The ORPP, a key legacy item for Premier Kathleen Wynne, was supposed to start collecting contributions from large corporations on Jan. 1, 2017. Finance Minister Charles Sousa announced on February 16th that the plan will now be delayed by a year to give companies more time to adjust.While the province will still start enrolling employers in January 2017, it won’t start taking deductions from paycheques until 2018.

“We are giving employers more time to prepare and about 400 companies involved will have the extra time they’ve asked for,” he said.

The delay will also give the small business lobby, which is set against it, more time to lobby the government to scratch it altogether. It also puts the implementation date close to the next provincial election in spring 2018.

The ‎pension will be given to roughly 3.5-million Ontarians who do not have a workplace pension, and will nearly double CPP benefits. But some business groups oppose it because they say it will force them to lay off staff or cut wages.

Despite the delay, the government appears committed to make the ORPP happen: Last month, it appointed former PanAmerican Games head Saad Rafi as CEO of the pension plan.

Mr. Sousa also confirmed what Prime Minister Justin Trudeau announced in October, that the federal government will collect ORPP contributions on the province’s behalf, saving Ontario on administrative costs and solving a major structural challenge as the previous Conservative government had refused to help administer the plan.

All employees in Ontario will belong to a workplace pension plan of one kind or another in five years after the proposed ORPP is implemented, Premier Kathleen Wynne said after announcing the plan last fall.

“I believe it is the right thing to do,” Wynne said of the plan, noting that two-thirds of Ontario workers have no pension plan other than the Canada Pension Plan (CPP).

The proposed plan when fully implemented would bring in about $3.5 billion annually.

Like the Canada Pension P‎lan, the ORPP would be equally funded by both employers and employee.

The Ontario government also says it is designing the plan to make it portable. Workers between 18 and 70 years old are eligible for the plan, which includes all types of work, such as part time and seasonal.

At age 65 a worker can start collecting benefits.

A chart provided in the initial briefing documents shows that an employee earning $45,000 a year would contribute $2.16 a day to the plan – her or his employer would match that. At the end of 40 years, the employee would collect $6,410 a year.

An employee earning $90,000, which is the maximum amount allowed, would contribute $4.50 a day – as would the employer – and would collect $12,815 a year at the end of four decades.

About 50% of workers in Ontario do not have a workplace pension plan or contribute to an RRSP, according to a government official.

In addition, the government has expanded the definition of “comparability” so some employers who currently have qualifying registered Defined Benefit (DB) or Defined Contribution (DC) pension plans will not need to contribute to the ORPP.To be exempt, the DB or DC pension plans must meet certain qualifying criteria:

• Both DB and DC plans must be federally or provincially registered, and retirement funds must be locked-in
• DB plans must have an annual accrual rate of 0.5%
• DC plans must have a total combined employer/employee contribution rate of no less than 8% with the employer contribution representing no less than 50% of the minimum combined rate (4%)
• Multi-Employer Pension Plans (MEPPs) and Pooled Registered Pension Plans (PRPPs) will also be considered comparable but the government has not yet determined eligibility criteria.

All other employers will start paying into the ORPP unless their savings plans are converted to a qualifying plan prior the timeframes outlined below:

So now, beginning in January 2018, employers with 500 or more workers, who do not have registered pension plans, will contribute. The contributions will also be phased in. For example, in 2018, large employers and their employees will each contribute 0.8%, and by 2020 they will contribute 1.9%.

The year after that, medium-sized employers – 50 to 499 employees – will start their contributions.

In 2020, small employers, with fewer than 50 employees, will join.

The Ontario government said employers and employees will not contribute more than 1.9%. The plan aims “to replace 15% of an individual’s pre-retirement earnings up to $90,000,” according to briefing documents.

The Ontario government has long called for reforms to CPP to enable Canadians to save more for retirement, and as the federal government has not moved forward the province introduced its own pension plan with the long-term goal of having other provinces join in.

“The ORPP is truly forward-looking, making Ontario a better place to work, invest and age. We are doing this for the next generation — our children and grandchildren to ensure they can retire with the security they deserve,” Premier Wynne has stated.

At this year’s CHHMA Spring Conference & AGM on April 12th, Jeff Kissack, a senior actuarial consultant with Towers /Watson, will be on hand to discuss this new legislation and the implications for employers with Ontario employees.


NEW WASTE-FREE ONTARIO ACT MEANS BIG CHANGES FOR PROVINCE’S RECYCLING STEWARDSHIP PROGRAMS

Ontario Environment and Climate Change Minister Glen Murray introduced Bill 151: the Waste-Free Ontario Act on November 26, 2015. This sweeping new legislation will ultimately eliminate Waste Diversion Ontario, the industry-run agency overseeing provincial recycling programs.

The bill sets the framework for “building the circular economy” in the province, government sources said.

“A shift to a circular economy encourages businesses to design long-lasting, reusable and easily recyclable products,” according to a 36-page draft document outlining the new approach.

“Transitioning to this type of economy requires a change in the way we think about waste, in how products and packaging are designed to reduce waste, and in how they are managed to maximize resource recovery.”

It is expected that the Ontario Liberal Government will pass the new legislation in the coming months with little debate as they have a clear majority. The act will definitely change the way stewardship programs are handled in Ontario in the future and the government is determined to make this happen. While there is little that anyone outside of the Ministry of the Environment can due to the actual legislation at this time, the CHHMA along with the coalition of several other trade associations are reviewing it in detail and we hope to be able to influence the “regulations” that go along with the implementation of the new legislation. We’ll keep you posted as this moves forward.


DO YOU IMPORT OR MANUFACTURE PRODUCTS CONTAINING MERCURY? IF SO, NEW FEDERAL REGULATIONS MAY APPLY TO YOU!

As of November 8, 2015, the Products Containing Mercury Regulations are prohibiting the import and manufacture of products containing mercury and its compounds.

What products may contain mercury or its compounds?  Examples include:

  • Lamps and light bulbs
  • Dental amalgam
  • Switches for appliances
  • Barometers and hydrometers
  • Thermostats and thermometers
  • Neon signs
  • Button cell batteries
  • Tire balancers
Exemptions to the prohibition do exists when meeting certain conditions, including total mercury content, or certain essential products with no current technical or economically viable alternatives.  However, for those products exempt from the prohibition, labelling, reporting and record keeping requirements may still apply.

Some examples* of exempted products and their respective mercury content limit (where applicable).

- Dental amalgam [No limits]
- Compact fluorescent lamp ≤ 25 watts [4 mg per lamp]
- T8 4-foot straight fluorescent lamp with normal lifetime [4 mg per lamp]
- Cold cathode tubing for signage (e.g. neon signs) or cove lighting [100 mg per 2.44m]
- Button cell batteries [25 mg per battery until Dec. 31, 2015]
- Thermometers used in research applications [No limits]
- Replacement parts (e.g. mercury flame sensors that are found in water heaters already in use) [No limits]

*Non-exhaustive list – Refer to the Schedule of the Regulations for a complete list.

What labelling requirements apply to mercury-containing products?
As of November 8, 2015, mercury-containing products allowed by the Regulations will be required to have the following statement in a readily visible location on the product and/or the package: “Contains mercury/Contient du mercure”

Other required labelling  information include: safe handling procedures and the measures to be taken in case of accidental breakage and options available for disposal and recycling.  Refer to Section 8 of the Regulations for more information.

In addition, many specified products must display the symbol “Hg”, including items such as fluorescent lamps and cold cathode tubing.

Reporting requirements
Manufacturers and importers of mercury-containing products will be required to report on their activities (import, manufacture) and provide product information (quantities, mercury content, etc.).  A first report for the year 2016 will be required by March 31, 2017.  Subsequent reports will be required every three years.

Already regulated by a federal government department or agency?
Many mercury-containing products are already subject to other federal regulatory controls. The new regulations mentioned above do not apply to such products as the risks they pose are already being managed by another federal department or agency.

These products include, but are not limited to: waste; material intended to be recycled; food, drugs and cosmetics under the Food and Drugs Act; surface coating materials under the Surface Coating Materials Regulations and Toy Regulations; pest control products under the Pest Control Products Act; feed and fertilizers under the Feeds Act and the Fertilizers Act; and ammunition and explosives under the control of the Minister ofNationalDefense or the Explosives Act.  Refer to Section 2.0 of the Regulations for the full list.

For more information on the Products Containing Mercury Regulations consult the website http://www.ec.gc.ca/mercury or email products.produits@ec.gc.ca.

You can also consult the following link for further details and key requirements of the regulations: http://www.gazette.gc.ca/rp-pr/p2/2014/2014-11-19/html/sor-dors254-eng.php

Some other helpful links are also available at: http://ec.gc.ca/lcpe-cepa/eng/regulations/detailReg.cfm?intReg=203 


TPP DEAL SIGNED, BUT YEARS OF NEGOTIATIONS STILL TO COME

The Trans-Pacific Partnership (TPP), one of the world’s biggest multinational trade deals, was signed by 12 member nations on February 3, 2016 in New Zealand, but the massive trade pact will still require years of tough negotiations before it becomes a reality.

The TPP, a deal which will cover 40% of the world economy, has already taken five years of negotiations to reach last month’s signing stage.

The signing is “an important step” but the agreement “is still just a piece of paper, or rather over 16,000 pieces of paper until it actually comes into force,” said New Zealand Prime Minister John Key at the ceremony in Auckland.

The TPP will now undergo a two-year ratification period in which at least six countries – that account for 85% of the combined GDP of the 12 TPP nations – must approve the final text for the deal to be implemented.

The 12 nations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

Given their size, both the United States and Japan would need to ratify the deal, which will set common standards on issues ranging from workers’ rights to intellectual property protection in 12 Pacific nations.

Opposition from many U.S. Democrats and some Republicans could mean a vote on the TPP is unlikely before President Barack Obama, a supporter of the TPP, leaves office early in 2017.

U.S. Trade Representative Michael Froman has said the current administration is doing everything in its power to move the deal and told reporters he was confident the deal would get the necessary support in Congress.

In Japan, the resignation of Economics Minister Akira Amari – Japan’s main TPP negotiator – may make it more difficult to sell the deal in Japan.

There is wide spread grassroots opposition to the TPP in many countries. Opponents have criticized the secrecy surrounding TPP talks, raised concerns about reduced access to things like affordable medicines, and a clause which allows foreign investors the right to sue if they feel their profits have been impacted by a law or policy in the host country.

Chile’s Foreign Minister Heraldo Munoz predicted “robust democratic discussion” in his South American nation.

Australian Trade Minister Andrew Robb said the agreement would be tabled shortly in parliament. Opposition to the deal in Australia has been building, but Robb was confident it would be approved, despite the government not control the Senate.

Secretary of the Economy for Mexico, Illdefonso Guajardo, said the TPP would be voted on before the end of 2016, while Malaysia said the deal had already been approved, although some legislative changes were still needed.

Canada’s new Liberal government signed the deal after the previous Conservative government had been involved in the negotiations which were concluded on October 5, 2015, but Trade Minister Chrystia Freeland has said “signing does not equal ratifying.”

She emphasized that the government committed itself to a wide-ranging consultation on the TPP during its election campaign and that process is currently underway.

A majority vote in the House of Commons is required to ratify the deal. And the TPP will not take effect for at least two years, giving the government ample time to engage in the consultation and study that was largely absent during a negotiation process that was notable primarily for its secrecy.

The Liberal minister said she’s aware of the fact Canadians are divided on the agreement, which would eliminate Canadian tariffs on Japanese vehicles and make it easier for manufacturers to use offshore parts in cars. It would be a boon for low-wage Asian suppliers of parts, but a challenge for Canadian firms.

She said she’s spent two months talking to Canadians.

“After attending public town halls, participating in over 70 meetings and round tables, and receiving feedback from thousands of Canadians who have written to me, it is clear that many feel the [deal] presents significant opportunities, while others have concerns.”

Ms. Freeland said she wants to see a major parliamentary debate on the matter. The fact remains, however, that the Liberals have a sizable majority and can easily vote through approval of the deal whenever they want.

“Throughout this process, our government’s guiding principle is that strengthening Canada’s trade performance is one of the ways we will work to strengthen our middle class and support high-wage jobs. Canada is a trading nation. As our government has made clear, we want to expand economic opportunities for all Canadians, and trade with our Asia-Pacific partners is key to making that happen.”

The TPP represents a huge rewrite of international trade engagement for Canada.

TPP will reach far beyond other trade pacts in its scope – including agriculture, manufacturing, services industries, investments and intellectual property.  In almost every area it will overtake the North American Free Trade Agreement (NAFTA), and it more than matches the Comprehensive Economic and Trade Agreement between Canada and the European Union.

Under TPP, Canada has agreed to concessions on its supply-managed policy for dairy and poultry products, along with new content limits for vehicles and auto parts as mentioned.

The TPP “is a major deal for Canada and not something that we should turn our back on by any means. I think we should embrace it,” said Lawrence Herman, an expert in international trade law.

Next to agreements under the World Trade Organization, “I would suggest this is the biggest deal on the planet.”

“The TTP will supersede all bilateral agreements we have, where there’s a conflict. We’ll retain our rights under the NAFTA where any NAFTA agreements are superior to the TPP provisions. And they haven’t set those out in any detail,” Herman said.

“But I think that most of the provisions in the TPP will be superior.”

For one, access to the U.S. procurement process will exceed the levels agreed to in NAFTA. “Canadian companies will obviously get additional preferential bidding opportunities for U.S. procurements,” Herman said.

Forget WTO, Herman added, TPP will become the “gold standard” of global trade.

Danielle Goldfarb, director of global commerce at the Conference Board of Canada, agreed this agreement is “a bit more ambitious in terms of its liberalization.”

But NAFTA “essentially remains in place unless these other aspects of the deal are more ambitious,” she said.

“So, if Canada and the U.S. have no tariff between them in a particular sector (now), then Canada and the U.S. will not have tariffs between them in that particular sector under the TPP as well.”

Still, she adds, the TPP “gets into all kinds of areas, like investment and services, data flows and e-commerce, and all kinds of labour mobility (issues) and so on — many areas that go beyond what already exists in NAFTA.”

David Watt, chief economist at HSBC Bank Canada, said the TPP represents “the next generation of trade deals that cover more than just trade.”

“NAFTA was a trade deal. It basically dealt largely with merchandise and trade. Now we’re seeing these trade deals evolve into issues of services, skills recognition, migration trends and things like intellectual property — which might not have been serious concerns in the past,” he said.

Watt added that even in areas where, for now, NAFTA will remain “the pre-eminent force,” TPP will expand and could eventually supersede those rules as well.

“Don’t get comfortable thinking that you’re insulated by NAFTA from TPP.”

Jim Balsillie warns that provisions tucked into the TTP could cost Canada hundreds of billions of dollars – and eventually make signing it the worst public policy decision in the country’s history.

After poring over the treaty’s final text, the businessman who helped build Research In Motion into a $20-billion global player said the deal contains “troubling” rules on intellectual property that threaten to make Canada a “permanent underclass” in the economy of selling ideas.

Balsillie said parts of the deal will harm Canadian innovators by forcing them to play by rules set by the treaty’s most-dominant partner: the United States.

Balsillie’s concerns about the deal include how it would impose intellectual property standards set by the U.S., the biggest partner in the treaty.

He fears it would give American firms an edge and cost Canadian companies more money because they would have to pay for someone else’s ideas instead their own.

On top of that, Balsillie believes the structure could prevent Canadian firms from growing as it would also limit how much money they can make from their own products and services.

Balsillie, who spent much of his time building RIM by negotiating agreements around the world, called the comprehensive final text a “brilliant piece of literature.”

“It’s such brilliantly systemic encirclement. I’m just in awe at its powerful purity by the Americans...

“We’ve been outfoxed.”

And unlike legislation passed in Parliament, he noted treaties like this one set rules that must be followed forever. This deal, he added, also features “iron-clad” dispute mechanisms.

The Conservatives had hailed the agreement as a means of ensuring Canadian access to a market of nearly 800 million people (close to 40% of global GDP, or $28 trillion U.S.) and before it was signed, warned Canada couldn’t afford not to take part.

Like the European Union and NAFTA before it, the TPP promises to greatly increase export revenues and household incomes in its member countries. The TPP would for the first time bring highly protectionist Japan, the world’s third-largest economy, into a wide-ranging trade agreement with the western hemisphere.

But the real eye-openers are the countries left out of this historic arrangement.  The Pacific Rim outsiders to the TPP include China, the world’s second-largest economy; powerhouse economies South Korea and Taiwan; and the rapidly growing developing world countries Indonesia and the Philippines.

Despite being called a “trade deal,” the TPP is holistic. Its provisions include new minimum standards of environmental protection, workplace safety and purity of food, drug and other imports. Those are the minimum standards to which second- and third-wave members would have to agree.

Fear of job loss also accompanies trade deals in their infancy. But bear in mind that offshoring of Canadian jobs has been to countries and regions with which Canada has no free-trade arrangements. Which makes the argument that a TPP would spur more job loss a bit counterintuitive.

Overall, the deal opens doors for Canadian business in most of the nations surrounding the Pacific Rim, from Vietnam to Australia. That will be good for Canada’s resource sectors, manufacturers, service providers, chemical firms, beef farmers and canola producers. Jobs will be created and exports will grow, boosting the economy. Many trade barriers, including major tariffs in Japan, will be coming down.

But the TPP deal does almost zip for Canadian consumers. Average Canadians will not lose, but they will not rack up meaningful gains either.

For further info on the TPP and its main benefits for Canadian manufacturers/exporters, click here for a summary prepared by the Canadian Manufacturing Coalition.

Source: Reuters, The Financial Post, The Globe and Mail


FEDERAL GOVERNMENT MOVES TO COOL HOT HOUSING MARKETS WITH NEW DOWN PAYMENT RULES 
 
In December of last year, the Liberal government announced that it would raise the minimum down payment for new insured mortgages to 10% from 5% for the portion of house prices above $500,000.

The new rules took effect on Feb. 15, 2016. Down payment rules for mortgages for properties below $500,000 remain unchanged.

At a news conference, Finance Minister Bill Morneau said Ottawa’s move is targeted at “pockets of risks” in the Toronto and Vancouver housing markets.“This will impact 1% or less of the market. We think it does it in a very targeted way,” he said.

The finance minister said the government looked closely at what the changes might mean for this will mean for the struggling Alberta economy.

“We considered the fact that the Alberta situation is challenging. We want to make sure that we’re doing things that don’t negatively impact that market and in fact that’s one of the reasons why we were very careful about exactly what we did and only impacted those homes over $500,000 up to a million,” he said.

“We’re not talking about bubbles here. We are talking about ensuring that Canadians take the right approach to investing in a home. It’s to protect the market for the existing home owners and it’s to protect new home buyers as well so that they have the appropriate amount of equity in their home,” he said.

Ottawa had previously restricted its mortgage insurance to homes valued at less than $1-million, so the minimum down payment for more expensive homes remains unchanged at 20%.

“The Ministry of Finance is touching the untouchable,” said CIBC economist Benjamin Tal.

While the move represents the most significant tightening of mortgage rules since Ottawa implemented the minimum 5% down payment in 2008, the effect may be smaller than expected, writes Mr. Tal.

Just 17% of home sales across Canada over the past year were for between $500,000 and $1-million, although that figure rose to 33% in Vancouver and 40% in Toronto.

Roughly 23% of outstanding mortgages in Canada are considered “high-ratio,” with owners requiring government-backed mortgage insurance, meaning the rules will affect less than 4% of new mortgages, writes Mr. Tal.

“[However,] I think you will see some extreme activity in some markets,” said Doug Porter, chief economist with Bank of Montreal, referring to the red hot Toronto and Vancouver markets.

The mad dash scenario almost always plays itself out when mortgage rates rise as consumers who have locked in their rates rush to take advantage of the lower rate they have guaranteed. Porter said the effect of down payment changes may be even more pronounced, when you factor in current rates and the unseasonably warm weather.

He noted that in the past, the Tories implemented changes and made them effective immediately. However, he added, the change in down payment rules is large enough that people probably needed an adjustment period.

The Toronto and Vancouver markets, which the new measures hope to cool, hardly need any more heat.

The record-shattering pace of Toronto’s housing market showed no sign of ending as sales far outpace new listings.Sales in the Toronto area climbed more than 21% in February from a year earlier. Even factoring in the extra leap year day, sales topped the previous February, 2010, record, the Toronto Real Estate Board reported on March 3rd.

The average home price in the Toronto area climbed almost 15% to $685,278, while the MLS home price index, deemed a better measure, showed a gain of 11.3%.

In Toronto’s 416 area, the average price of a detached home is now above $1.2-million. In the surrounding 905 area, it’s now $816,705, according to TREB statistics.

Meanwhile, it was the best February for sales in the history of the Real Estate Board of Greater Vancouver.

The board said on March 2nd that its composite benchmark price for all residential properties in Metro Vancouver reached $795,500 at the end of last month, a 22.2% increase compared to a year ago. The average detached home sold for $1,816,487.

There were 4,172 sales in February 2016, a 36.3% jump from the 3,061 sales a year ago and a 65.6% increase from January. Sales were 56.3% above the 10-year average for the month of February.

The share of properties valued at between $500,000 and $1-million is actually smaller in Toronto and Vancouver given that these sizzling markets have pushed many properties, particularly detached homes, over the $1-million mark, pushing out many of the first-time buyers who would most likely be affected by the new rules. A 2015 survey by private sector mortgage insurer Genworth MI Financial found the average down payment among first-time buyers in Toronto and Vancouver was 20%.

Within minutes of the announcement last December, Toronto mortgage broker Steve Garganis saw a noticeable pickup in calls from concerned clients.

“This is just political posturing, but it did raise peoples’ eyebrows. I had clients asking, ‘What does this mean for me?’

“It’s going to impact a very, very small minority of buyers, but the really adverse effect will be that we will see a bit of a spike in buyers (between now and February), which is just what we don’t need in Toronto right now.”

Realtor David Fleming predicts the new rules will simply fuel more competition for condos and those rare houses under $500,000 among first-time buyers determined to break into the booming market before they are locked out forever.

It will also just force them to alternative sources, like the Bank of Mom and Dad, to come up with the extra money.

“I understand what the government is trying to accomplish, but all it’s doing is taking demand from one column and shifting it to another.”

ReMax had been predicting that price growth should slow in Toronto next year to 5% and expects Ottawa’s announcement to do little to change that, says Ontario-Atlantic region executive vice president Gurinder Sandhu.

“Part of what the government’s trying to do is promote stability, but it wasn’t required in this case. The market is stabilizing on its own.”

BMO chief economist Doug Porter predicts almost no impact.

“We’ve seen a number of measures over the years by Ottawa to try to cool the housing market and they’ve always just landed a glancing blow, especially on the two big cities.”

The new rules will likely affect just 5% of new sales in Toronto, and just 2.5% in Vancouver, added CIBC’s Mr. Tal. But will affect nearly 10% of sales in Calgary, where homeowners tended to have relatively small down payments.

“The overall impact will be felt only at the margin, given the relatively small segment of the market that will be impacted – even in the target markets.”

Even so, the government’s move has widespread support, according to a RE/MAX survey that found two thirds of Canadians agree that the minimum down payment for a home should be at least 10%.

Canada Mortgage and Housing Corporation (CMHC) also announced it was raising the limits on its government-insured mortgage-backed securities program to $105-billion in 2016 from $80-billion this year. The program is an important source for lenders, allowing them securitizes insured mortgages and sell them to investors, with Ottawa providing insurance on both the mortgages and the mortgage-backed securities themselves. The amount of government-backed securities that individual lenders can issue each year was raised from $6-billion to $7.5-billion. CMHC said it was hiking the fees it charges to lenders who go over the prescribed annual allotment, but would lower the fees for lenders who used the government’s Canada Mortgage Bond program.

“The revised fee structure is intended to encourage the development of private market funding alternatives by narrowing the funding cost difference between government sponsored and private market funding sources,” the federal housing agency wrote.

Source: The Globe and Mail, The Financial Post, The Toronto Star


IS CANADA’S ANTI-SPAM LEGISLATION (CASL) MISSING THE MARK?

In July of 2014, Canada’s Anti-Spam Legislation (CASL) was introduced, a new law aimed at reducing, if not completely eradicating, spam from Canadians’ inboxes.

Now approaching two years later, where do we stand? Is CASL fulfilling its quest of freeing us from the tyranny of digital junk mail?

The enforcement branch of the Canadian Radio-television and Telecommunications Commission (CRTC) is responsible for tracking down violators of, and, as promised, they aren’t messing around.

“The CRTC has a team of highly qualified people ready to start enforcing CASL. We have former RCMP officers, major criminal investigators and sophisticated computer forensics experts who will be leading these efforts,” Jean-Pierre Blais, chairman of the commission, told a Toronto audience in June, 2014, shortly before the new law took effect. “Enforcement is now in the CRTC’s DNA.”

He said the commission would target “the most egregious violators: the high-volume spammers, the malicious URLs and the ‘botnets’ located in Canada,” adding, “If you abide by the law, you have nothing to fear. Good corporate citizens will be in good standing.”

Since then, the enforcement branch has announced three settlements with well-known Canadian companies – Rogers Communications Inc., Porter Airlines Inc. and dating website Plentyoffish Media Inc. – for violations related to sending commercial e-mails without an option to unsubscribe or with faulty unsubscribe functions.

Manon Bombardier, chief compliance and enforcement officer at the CRTC, says the uniforms her team wears are partly for the officers’ safety and also help win co-operation from the targets of their investigations. “When an officer comes into a business with a uniform, there’s collaboration almost instantly.”

That tactic may have helped with those three companies, which agreed to pay a total of $398,000 between them and all worked collaboratively with the CRTC, Ms. Bombardier said. In a less co-operative case, the commission issued a $1.1-million fine against Compu-Finder, a professional services training company, for sending commercial e-mails without consent and with faulty unsubscribe mechanisms.

A cottage industry has sprung up around CASL compliance with many lawyers now devoting their entire practices to it and recent blog posts from the legal community have questioned whether only “perfect” compliance is acceptable.

David Elder – a partner with law firm Stikeman Elliott LLP in Ottawa who has represented clients both on interpretation of the law and in investigations – says the first year and a half under CASL has proved many fears correct, arguing that enforcement actions have primarily targeted legitimate domestic companies. He says there is a lack of clarity around how the CRTC decides which cases to investigate, little transparency around the process of agreeing on a monetary fine and scant consideration of the defence of due diligence for companies that have put systems in place to try to comply with the law.

Last December, the CRTC said it served its first warrant under CASL, working with international partners to take down a server in Toronto that was associated with a malware family that has infected computers in more than 190 countries. Mr. Elder called that move encouraging.

“A lot of the bad actors are offshore, which does complicate investigation and enforcement. But at the same time, it’s not clear that the objectives of the law are being well-served if they just go after the low-hanging fruit,” he said.

Yet, Ms. Bombardier says the commission has only published the results of four investigations so far. “We’ve completed and closed 30 investigations in 2015,” she said, adding that on top of the published cases, her team issued 15 warning letters and one citation and that not all investigations lead to enforcement action.

The CRTC received 460,000 reports of spam from Canadians in 2015, she said, and it must look for trends and patterns in the data to determine which companies to pursue.

“We’re very proportionate in our approach. If we see a problematic practice in a sector or a large volume being sent by a particular player, we’ll look at those. We’re not looking at one or two spam messages. And we publish results, which we hope informs businesses of our concerns and helps them focus their attention in those areas so they’re compliant.”

Regarding the amount of the penalties, once more investigations have been concluded, there will be a number of precedents that will help, Ms. Bombardier said, adding, “Each case is different. So there’s no magic formula, it’s case by case.”

Network security firm Cloudmark published a report in April noting a 37% reduction in spam originating from Canada and also reporting that Canadians received 29% less e-mail after CASL took effect as marketers decided against sending e-mail that “was not technically spam but did not meet the stringent requirements for affirmative consent.”

Mr. Elder says it remains difficult to understand how to interpret the law and there is a need for better guidance. “Regulators like to leave things open-ended, but it creates uncertainty and a chill in the business community. People end up erring on the side of caution and curtailing marketing.”

Here is a link to another interesting article on CASL called “The Great Anti-Spam Cash Grab” that appeared in the Financial Post: http://business.financialpost.com/fp-comment/the-great-anti-spam-cash-grab

Source: From Articles by The Globe and Mail, The Financial Post


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