Automatic Renewals In Canadian Consumer Protection Law

Introduction

With the explosion of online service offerings over the last decade, subscription plans have become a significant source of income for many consumer-facing businesses. To create a reliable and predictable income stream, these plans typically last for an indefinite period by automatically renewing at a regular frequency. However, to be effective in Canada, these contract structures must comply with provincial consumer protection legislation.

As a result of updated guidance from the US Federal Trade Commission and changes in California's Automatic Renewal Law, many U.S. retailers have had the opportunity to reconsider the automatic renewal of their consumer agreements over the last two years. However, despite no recent changes to analogous Canadian legislation, there remains confusion regarding the regulation of automatic renewals in Canada. Furthermore, some provinces, such as Ontario, are starting to take a closer look at the practice. It