Regulation - LGIC
Consumer Protection Act, 2023: Consultation on Phase 1 Regulatory Proposals
Regulation Number(s):
N/A
Instrument Type:
Regulation - LGIC
Bill or Act:
Consumer Protection Act, 2023
Summary of Proposal:
On December 6, 2023, Bill 142, the Better for Consumers, Better for Businesses Act, 2023 received Royal Assent. Bill 142 introduced a new Consumer Protection Act, 2023 (the new CPA or the new act) that will, if proclaimed, replace the current Consumer Protection Act, 2002 (the current CPA or the current act). The current CPA is the primary piece of legislation that sets out rules for consumer protection in Ontario. The current CPA governs most personal and household transactions by consumers, including buying furniture in a store, shopping for clothes online, buying goods or services sold door-to-door, and renovating homes.
The new CPA requires the development of regulations to set out the details of various rights and requirements under the act, including contract requirements for which a new, modernized approach is being proposed. As a result, the new CPA would not come into force until after the first phase of regulations have been developed and approved. Until then, the current CPA remains in effect to protect consumers.
The ministry is seeking feedback from the public, businesses, and other stakeholders on a first phase of regulatory proposals to support implementation of the new CPA, as outlined in the attached consultation paper.
The ministry is seeking feedback on the following proposals that would:
General Contract Rules
Core Set of Rules: Contract and Pre-Disclosure Requirements
• Simplify consumer protection requirements for both businesses and consumers by combining key contract types into a single set of core contract rules that would apply to most consumer contracts.
o The core rules will include required pre-disclosures, similar to those for remote and internet agreements under the current CPA.
Additional Requirements for Certain Contracts
• Require that certain contract types include additional information beyond the core contract rules. Additional requirements are being proposed for the following contract types:
o Contracts for Loan Brokering
o Credit Repair
o Contract Breaking Services
o Direct Contracts
o Direct Contracts for Restricted Goods and Services
o Purchase-Cost-Plus Leases (see additional details below)
• Contracts for timeshares and personal development services would not be subject to the core rules. These contracts have many important differences from typical consumer contracts for most goods and services. Therefore, their contract requirements and pre-disclosure requirements (if any) would be set out separately, although the intention is to align them with the core rules as much as possible.
Price Escalation Clauses and Appropriate Disclosures to Consumers
• Strengthen rules for price escalation clauses, including the specific information businesses must provide to consumers when they adjust prices in accordance with a price escalation clause.
New Contract Amendment and Continuation Rules
• Increase consumer choice by generally requiring suppliers to obtain express consumer consent to initiate an amendment or continuation of a contract. However, in certain circumstances, permit a supplier to amend or continue a contract by providing advance notice to the consumer, if the consumer has an ongoing right to terminate the contract.
• The consultation paper includes proposals outlining the types of amendments and continuations that could be initiated by the supplier by providing advance notice, and what information would need to be provided to the consumer in these situations.
• The consultation paper also outlines the general rules suppliers must follow when amending or continuing consumer contracts.
Purchase-Cost-Plus Lease Rules
• Require that Purchase-Cost-Plus Leases (PCPL) include additional disclosures beyond the core set of contract disclosure rules.
o PCPL are a new category of long-term leases established in the new CPA; primarily for heating, ventilation, and air conditioning (HVAC) and home comfort appliances.
• Clarify definitions related to PCPL (e.g., total amount payable).
• Determine parameters of an allowable buyout schedule required under the new CPA.
• Establish consumer remedies should suppliers not provide a compliant buyout schedule.
• Set out potential exemptions from these rules.
Timeshare Contract Rules
• Limit the costs that a consumer, or other specified persons, may be charged for exercising their right under the new CPA to terminate a timeshare contract on or after the 25-year anniversary of entering the contract or upon the death of the consumer.
• Improve disclosure requirements for timeshare contracts to help ensure consumers are better informed about the long-term implications of these contracts.
Proposed Application
Monetary Threshold
• Maintain the current monetary threshold for consumer contract rules.
• Monetary thresholds (i.e., total potential payment obligation) are used in both the current and the new CPA to determine if certain rules apply to a specific consumer contract.
• Clarify how recurring payments are treated.
• Reduce the monetary threshold to one cent to trigger the right to cancel a contract if there is late delivery or performance.
• Explicitly state how taxes should be treated when assessing the monetary threshold.
Exemptions from the New CPA
• Generally retain most existing exemptions from the current CPA in the new CPA and its regulations, with several key changes, including the:
o Removal of certain redundant exemptions;
o Addition of a new exemption for the University of Ottawa Heart Institute;
o Addition of a partial exemption for banks; and
o Expansion of the partial exemption for certain lotteries.
• Feedback is also being sought on potential areas of duplication or conflict between federal and provincial regulatory frameworks.
Transition Rules
• Seek stakeholder feedback and inform the ministry's understanding of the impacts and risks of applying the new CPA rules to certain existing contracts.
Increasing Transparency
• Expand on and improve the public record through various changes, which would broaden the scope of the public record and enhance the information it provides to the public. Specific proposals would:
o Establish clear regulations for posting Notices of Proposal on the public record,
o Require different posting periods to reflect the severity of the enforcement or compliance
action taken,
o Expand the scope of the public record to allow the ministry to post all enforcement and
compliance measures it takes under specified consumer protection statutes, and
o Allow for additional business information to be included.
Continuing Existing Policies
• Generally carry over the following existing policies from the current CPA, with minor adjustments in some instances (additional changes to some of these areas may be considered in the future):
o Motor Vehicle Work and Repair
o Government Cheque Cashing
o Prepaid Purchase Cards (including gift cards)
o Rewards Points
o Restricted Direct Sales
o Personal Development Services
o Credit Agreements
o General Lease Rules
Informing Future Regulations
• Seek high-level and exploratory feedback on Barriers to Contract Cancellation to inform the development of future regulations that would prohibit businesses from creating unnecessary barriers when consumers are trying to cancel a contract; particularly a subscription or membership-based contract like a gym membership or newspaper subscription.
Consultation feedback is being sought from interested stakeholders by February 10, 2025.
The ministry welcomes your feedback. Further details and questions for your consideration can be found in the consultation paper. Please respond to the questions in each section and review the "How to Participate" section within the attached consultation paper for information about how to submit your responses. Please provide examples or evidence to support your suggestions, where possible.
You may submit your comments by responding directly to this Regulatory Registry posting or by sending your comments by email to consumerpolicy@ontario.ca no later than February 10, 2025.
As part of a future phase of regulation development work, the ministry also intends to consider the development of regulatory proposals related to administrative penalties, as well as any substantive policy changes related to both rewards points or prepaid purchase cards, and any further restrictions on door-to-door sales or solicitation, among other things. Consultations on these proposals would be held separately, at a later date.
The new CPA requires the development of regulations to set out the details of various rights and requirements under the act, including contract requirements for which a new, modernized approach is being proposed. As a result, the new CPA would not come into force until after the first phase of regulations have been developed and approved. Until then, the current CPA remains in effect to protect consumers.
The ministry is seeking feedback from the public, businesses, and other stakeholders on a first phase of regulatory proposals to support implementation of the new CPA, as outlined in the attached consultation paper.
The ministry is seeking feedback on the following proposals that would:
General Contract Rules
Core Set of Rules: Contract and Pre-Disclosure Requirements
• Simplify consumer protection requirements for both businesses and consumers by combining key contract types into a single set of core contract rules that would apply to most consumer contracts.
o The core rules will include required pre-disclosures, similar to those for remote and internet agreements under the current CPA.
Additional Requirements for Certain Contracts
• Require that certain contract types include additional information beyond the core contract rules. Additional requirements are being proposed for the following contract types:
o Contracts for Loan Brokering
o Credit Repair
o Contract Breaking Services
o Direct Contracts
o Direct Contracts for Restricted Goods and Services
o Purchase-Cost-Plus Leases (see additional details below)
• Contracts for timeshares and personal development services would not be subject to the core rules. These contracts have many important differences from typical consumer contracts for most goods and services. Therefore, their contract requirements and pre-disclosure requirements (if any) would be set out separately, although the intention is to align them with the core rules as much as possible.
Price Escalation Clauses and Appropriate Disclosures to Consumers
• Strengthen rules for price escalation clauses, including the specific information businesses must provide to consumers when they adjust prices in accordance with a price escalation clause.
New Contract Amendment and Continuation Rules
• Increase consumer choice by generally requiring suppliers to obtain express consumer consent to initiate an amendment or continuation of a contract. However, in certain circumstances, permit a supplier to amend or continue a contract by providing advance notice to the consumer, if the consumer has an ongoing right to terminate the contract.
• The consultation paper includes proposals outlining the types of amendments and continuations that could be initiated by the supplier by providing advance notice, and what information would need to be provided to the consumer in these situations.
• The consultation paper also outlines the general rules suppliers must follow when amending or continuing consumer contracts.
Purchase-Cost-Plus Lease Rules
• Require that Purchase-Cost-Plus Leases (PCPL) include additional disclosures beyond the core set of contract disclosure rules.
o PCPL are a new category of long-term leases established in the new CPA; primarily for heating, ventilation, and air conditioning (HVAC) and home comfort appliances.
• Clarify definitions related to PCPL (e.g., total amount payable).
• Determine parameters of an allowable buyout schedule required under the new CPA.
• Establish consumer remedies should suppliers not provide a compliant buyout schedule.
• Set out potential exemptions from these rules.
Timeshare Contract Rules
• Limit the costs that a consumer, or other specified persons, may be charged for exercising their right under the new CPA to terminate a timeshare contract on or after the 25-year anniversary of entering the contract or upon the death of the consumer.
• Improve disclosure requirements for timeshare contracts to help ensure consumers are better informed about the long-term implications of these contracts.
Proposed Application
Monetary Threshold
• Maintain the current monetary threshold for consumer contract rules.
• Monetary thresholds (i.e., total potential payment obligation) are used in both the current and the new CPA to determine if certain rules apply to a specific consumer contract.
• Clarify how recurring payments are treated.
• Reduce the monetary threshold to one cent to trigger the right to cancel a contract if there is late delivery or performance.
• Explicitly state how taxes should be treated when assessing the monetary threshold.
Exemptions from the New CPA
• Generally retain most existing exemptions from the current CPA in the new CPA and its regulations, with several key changes, including the:
o Removal of certain redundant exemptions;
o Addition of a new exemption for the University of Ottawa Heart Institute;
o Addition of a partial exemption for banks; and
o Expansion of the partial exemption for certain lotteries.
• Feedback is also being sought on potential areas of duplication or conflict between federal and provincial regulatory frameworks.
Transition Rules
• Seek stakeholder feedback and inform the ministry's understanding of the impacts and risks of applying the new CPA rules to certain existing contracts.
Increasing Transparency
• Expand on and improve the public record through various changes, which would broaden the scope of the public record and enhance the information it provides to the public. Specific proposals would:
o Establish clear regulations for posting Notices of Proposal on the public record,
o Require different posting periods to reflect the severity of the enforcement or compliance
action taken,
o Expand the scope of the public record to allow the ministry to post all enforcement and
compliance measures it takes under specified consumer protection statutes, and
o Allow for additional business information to be included.
Continuing Existing Policies
• Generally carry over the following existing policies from the current CPA, with minor adjustments in some instances (additional changes to some of these areas may be considered in the future):
o Motor Vehicle Work and Repair
o Government Cheque Cashing
o Prepaid Purchase Cards (including gift cards)
o Rewards Points
o Restricted Direct Sales
o Personal Development Services
o Credit Agreements
o General Lease Rules
Informing Future Regulations
• Seek high-level and exploratory feedback on Barriers to Contract Cancellation to inform the development of future regulations that would prohibit businesses from creating unnecessary barriers when consumers are trying to cancel a contract; particularly a subscription or membership-based contract like a gym membership or newspaper subscription.
Consultation feedback is being sought from interested stakeholders by February 10, 2025.
The ministry welcomes your feedback. Further details and questions for your consideration can be found in the consultation paper. Please respond to the questions in each section and review the "How to Participate" section within the attached consultation paper for information about how to submit your responses. Please provide examples or evidence to support your suggestions, where possible.
You may submit your comments by responding directly to this Regulatory Registry posting or by sending your comments by email to consumerpolicy@ontario.ca no later than February 10, 2025.
As part of a future phase of regulation development work, the ministry also intends to consider the development of regulatory proposals related to administrative penalties, as well as any substantive policy changes related to both rewards points or prepaid purchase cards, and any further restrictions on door-to-door sales or solicitation, among other things. Consultations on these proposals would be held separately, at a later date.
Analysis of Regulatory Impact:
The Ministry of Public and Business Service Delivery and Procurement is conducting a Regulatory Impact Analysis. Estimates of potential costs and benefits cannot be determined until the proposed regulations have been finalized.
Through this consultation, the ministry is seeking feedback on the potential costs and impacts associated with these proposals, including any potential operating and administrative costs. A key objective of the new CPA is to make it easier for consumers and businesses to understand and comply with the law. While the new CPA would be clearer and more concise, it would maintain the current CPA's intent and its existing consumer protections. The new legislation would streamline redundant and duplicative requirements, realign provisions between the CPA and its regulations where appropriate, and introduce other changes that increase consistency or readability.
Consumers would benefit from improved consumer rights in relation to unilateral contract amendments, automatic renewals and extensions and greater protections against unfair practices such as aggressive sales tactics and misleading claims. Some proposals could help consumers save money and promote competition by making it easier for consumers to cancel subscriptions and memberships they no longer want and by providing fairer exit options from timeshares and long-term leases or rental agreements.
Businesses would benefit from more streamlined requirements that better respond to modern market practices. The proposed changes are intended to bolster consumer confidence in the marketplace, promote fair competition, and deter bad actors who inflict harm on consumers. The proposals would be consistent with the government's work to promote a competitive business environment that fosters innovation and growth.
To further inform this analysis, the Ministry of Public and Business Service Delivery and Procurement encourages you to provide your feedback. We invite stakeholders to provide input on the potential costs and benefits associated with the regulatory proposals to implement the new Consumer Protection Act, 2023, as outlined in the consultation paper.
We are particularly interested in insights regarding the anticipated financial implications for businesses, potential benefits for consumers, and any challenges that may arise during implementation. Where possible, please provide examples or evidence to support your views.
Through this consultation, the ministry is seeking feedback on the potential costs and impacts associated with these proposals, including any potential operating and administrative costs. A key objective of the new CPA is to make it easier for consumers and businesses to understand and comply with the law. While the new CPA would be clearer and more concise, it would maintain the current CPA's intent and its existing consumer protections. The new legislation would streamline redundant and duplicative requirements, realign provisions between the CPA and its regulations where appropriate, and introduce other changes that increase consistency or readability.
Consumers would benefit from improved consumer rights in relation to unilateral contract amendments, automatic renewals and extensions and greater protections against unfair practices such as aggressive sales tactics and misleading claims. Some proposals could help consumers save money and promote competition by making it easier for consumers to cancel subscriptions and memberships they no longer want and by providing fairer exit options from timeshares and long-term leases or rental agreements.
Businesses would benefit from more streamlined requirements that better respond to modern market practices. The proposed changes are intended to bolster consumer confidence in the marketplace, promote fair competition, and deter bad actors who inflict harm on consumers. The proposals would be consistent with the government's work to promote a competitive business environment that fosters innovation and growth.
To further inform this analysis, the Ministry of Public and Business Service Delivery and Procurement encourages you to provide your feedback. We invite stakeholders to provide input on the potential costs and benefits associated with the regulatory proposals to implement the new Consumer Protection Act, 2023, as outlined in the consultation paper.
We are particularly interested in insights regarding the anticipated financial implications for businesses, potential benefits for consumers, and any challenges that may arise during implementation. Where possible, please provide examples or evidence to support your views.
Further Information:
Consultation paper
Consumer Protection Act, 2002
O. Reg. 17/05: GENERAL
Consumer Protection Act, 2023
(Download Adobe Reader)
Proposal Number:
24-MPBSD026
Posting Date:
December 12, 2024
Comments Due Date:
February 10, 2025
Contact Address:
Ministry of Public and Business Service Delivery and Procurement
Consumer Policy and Liaison Branch
56 Wellesley Street West, 6th Floor
Toronto, ON
M7A 1C1
Consumer Policy and Liaison Branch
56 Wellesley Street West, 6th Floor
Toronto, ON
M7A 1C1