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CASL is Constitutional: Federal Court of Appeal Upholds Constitutionality of Canada’s Anti-Spam Law

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Canada’s anti-spam law has been the target of intense criticism since its introduction in 2009 as the Electronic Commerce Protection Act. Even after the law passed in 2010, there was no shortage of effort to delay the regulations needed to put it into effect. Once it finally took effect in 2014, the criticism continued with a steady stream of fanciful suggestions that it would render promotions of neighbourhood lemonade stands illegal and warnings that the law would invariably be challenged in the courts and ruled unconstitutional. In 2017, just as critics were arguing for reforms to the law at the Industry Committee, the CRTC issued its ruling on the matter, determining that the law was in fact constitutional. The issue then proceeded to the Federal Court of Appeal, which last week unanimously upheld the constitutionality of law.

The case could still be appealed to the Supreme Court of Canada, but the decision signals that Canada’s anti-spam law (now typically referred to as CASL) will remain the law of the land for the foreseeable future. The lobbying campaign at the Industry Committee in 2017 to overhaul the law was rejected, resulting only in recommendations to clarify certain provisions. The government response to the committee report months later was even more tepid, merely noting the committee’s concerns. Now the efforts to challenge the  constitutionality at both the CRTC and in the federal courts have failed with the Federal Court of Appeal firmly dismissing claims that have repeatedly raised by the law’s critics.

I have written extensively about CASL, defending it when it took effect in 2014 (here and here) and making the case for the law in 2017 before the Industry Committee. My committee appearance focused on three issues: there is a real harm or risk to be addressed, the evidence suggests that the law has been effective, and that the claims that the law is too onerous or overbroad are overstated. The Federal Court of Appeal addressed all of those issues in its decision.

The ruling includes an extensive review of the CRTC spam investigation into a Montreal firm named CompuFinder that triggered the case, but the heart of the case is whether the law is unconstitutional. The argument touches on numerous issues, including whether the law falls within federal jurisdiction, violates the freedom of expression protections found in the Canadian Charter of Rights and Freedoms, or runs afoul of several other Charter provisions related to self-incrimination or the right against unreasonable search and seizure. There is also additional analysis of the specific CRTC investigation and application of the law to CompuFinder, which will be the subject of a follow-up post as it provides guidance on the interpretation of CASL.

Does CASL fall within federal jurisdiction?

The CRTC ruled that CASL falls within the second branch of the federal trade and commerce power pertaining to general trade and commerce affecting Canada as a whole. As the court assessed that finding, it divided CASL into three distinct regulatory schemes that govern commercial electronic messages (CEM), alteration of transmission data, and unauthorized installation of computer programs. At issue in this case was the CEM rules, which the court ruled were far narrower than critics have suggested:

The impugned provisions target a particular type of electronic communication – commercial messaging – that is intimately tied to the scheme’s purpose of protecting e-commerce. The scheme has no effect on the sending of electronic messages that cannot reasonably be considered to have as a purpose encouraging participation in a commercial activity. This belies the appellant’s assertion that ‘CASL’s ‘true purpose’ is to regulate unsolicited messages generally.’

More particularly still, the impugned scheme regulates only a narrow aspect of the targeted type of messaging. The scheme establishes three consent-related preconditions for the sending of CEMs: express or implied consent of the recipient; inclusion of an unsubscribe mechanism to allow recipients to withdraw consent; and inclusion of senders’ identification and contact information so these individuals can be contacted directly and informed of recipients’ withdrawal of consent, if necessary.

I have often argued that the fight against CASL was a thinly disguised objection to obtaining consent. A reasonable reading of the law is that once consent is obtained, there are few restrictions on businesses. The court viewed the law the same way:

once recipient consent has been obtained and the few consent-related content requirements satisfied, as far as CASL is concerned, senders of CEMs are at liberty to offer, advertise or promote any form of transaction, act or conduct they wish, in any manner, according to whatever terms they see fit.

The court also dismissed concerns that some of the affected commercial messages might occur exclusively within a single province and thereby undermine the federal jurisdiction:

The impugned scheme’s regulation of intraprovincial messaging is incidental to its primary aim of regulating CEMs that by nature do not respect provincial borders and can have a dramatic effect on the national economy. Pursuit of this primary aim made the scheme’s regulation of some intraprovincial messaging unavoidable.

Having established the character of the CASL CEM provisions, the court then assesses whether it falls within federal jurisdiction over trade and commerce. The court concludes that it does, notably finding that spam threatens e-commerce and that touches potentially on all industries:

These deleterious effects associated with unsolicited CEMs threaten e-commerce in Canada. The impugned scheme regulates the sending of unsolicited CEMs to defend against these threats. Once it is accepted that e-commerce permeates Canada’s economy and is not confined to any specific industry or sector- and I do not perceive the appellant as seriously contesting this proposition – it must follow that the impugned legislation is concerned with trade as a whole and thus satisfies the third General Motors indicium.

The court also finds…

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