On Friday, July 4 the CRTC issued FAQs for registered charities and a statement regarding the general approach to enforcement of Canada's Anti-Spam Legislation. The new guidance aligns with Imagine Canada's and Industry Canada's broad interpretation of the exemption for registered charities.
CAPACOA has published the helpful overview of the new guidance below that clarifies matters for charitable organizations still uncertain about the types of electronic messages that may be exempt.
The Governor-in-Council regulations implementing the Canada Anti-Spam Legislation (CASL) already exempted a commercial electronic message (CEM) "that is sent by or on behalf of a registered charity ... and the message has as its primary purpose raising funds for the charity" (R3(g)). Yet it remained to be clarified whether or not this exemption included only those activities that fall under the Canada Revenue Agency definition of fundraising (i.e. activities for which tax-deductible receipts are produced). On June 5, Imagine Canada published a FAQ (based on information provided by Industry Canada) providing a broad interpretation of the exemption. After a few weeks of uncertainty, CRTC's guidance released on July 5 confirms this broad interpretation.
Most electronic messages sent by charities are exempt.
With regard with the R3(g) exemption, CRTC's FAQ does not limit the interpretation of "raising funds for the charity" to Canada Revenue Agency definition of fundraising, thereby implicitly including under the exemption other revenue-generating activities for which tax-deductible receipts are not issued. Moreover, the FAQ provides examples where raising funds is the primary purpose of a CEM, including: "a CEM, sent by or on behalf of a charity, which promotes an event and/or the sale of tickets for an event – such as a dinner, golf tournament, theatrical production or concert or other fundraising event – where the proceeds from ticket sales flow to the registered charity."
Based on this information, most CEMs by performing arts charities would be exempt. The only caveat is for CEMs where the primary purpose is to encourage the recipients to participate in a commercial activity with a charity's sponsor – those would not be exempt. This being said, it remains in arts charities best interest to comply with some specific requirements of CASL, where those represent good digital marketing practices. Namely: identifying the sender clearly, providing an easy unsubscribe mechanism and seeking consent before sending messages.
Enforcement will empahize education rather than penalties
The FAQ also states that CRTC's enforcement goal is "to promote compliance with the CASL in the most efficient way possible while preventing recidivism." The FAQ also adds:
"The CRTC has the authority to impose administrative monetary penalties; however there are a number of factors that need to be kept in mind:
- steps you take to show due diligence (such as tracking how you obtain email addresses, or always including an unsubscribe option) will be taken into consideration when assessing a measure or a penalty for non-compliance;
- the CRTC will focus its investigations on cases where there are a significant number of complaints or there appears to be a major transgression;
- the CRTC emphasizes education and compliance, rather than punishment; and
- in the case of a violation, an undertaking with the CRTC eliminates the possibility of private lawsuits."
Based on this information, arts organizations should:
- take positive steps to comply with CASL, especially where compliance actually enhances digital marketing practices (ie. clear sender identification, easy unsubscribe mechanism, obtaining express consent whenever possible); and,
- focus on continually improving their digital marketing practices in order to deepen engagement with their patrons.