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As recently reported, the Ontario government is proposing changes to direct selling rules and enforcement provisions under the Consumer Protection Act, 2002 (CPA).  HRAI has reviewed these changes, along with some members, and is supporting the majority of these changes.

A year and a half ago, rules were introduced to prohibit unsolicited door-to-door sales for certain products and services (e.g., water heaters, furnaces, air and water filters, etc.). As a result of those changes, a restricted product or service cannot be offered or sold at a consumer’s home unless the consumer initiates contact with the business and invites the business to their home for the specific purpose of entering into an agreement for such a product or service.

HRAI supported the intent of those regulations when introduced, but expressed concerns about their effect on legitimate residential retrofit contractors who do not engage in questionable sales tactics such as door-to-door selling.  In the view of HRAI, the regulations that were adopted in early 2018 reached far beyond their intended target. 

In June, the Ontario Ministry Government and Consumer Services responded to HRAI’s concerns with a series of regulatory amendments.

The amendments are intended to:

  • reduce burden and barriers for businesses that provide products and services when the consumer has initiated contact;
  • level the playing field by increasing consumer protection to deter non-compliant businesses in the sector; and
  • strengthen enforcement powers to target businesses that cause the most harm to consumers.

In July, HRAI met with a group of members to discuss the proposed changes and, as a result of this consultation, made written submissions to the Ministry.  The full submission can be seen here but, as an example, one of the proposed changes is the following:

Amend the CPA so that businesses may solicit for or enter into a contract for any restricted product or service at the consumer’s home so long as the consumer has contacted the business and invited a business representative to their home and one or more of the following conditions are met:

  • The consumer has invited the business representative to their home to enter into a consumer agreement for a restricted product or service.
  • The business is attending the consumer’s home as part of an ongoing consumer agreement related to a restricted product or service.
  • The consumer has invited the business representative to their home to enter into a consumer agreement for the service of a restricted product.
    • A person authorized to do so by statute has prohibited or restricted the use of a restricted product by tagging, sealing or other means.

Note: A contract formed in contravention of the will continue to be void, resulting in the consumer being able to keep the products and services without obligation in respect of their use or disposal.

This change addresses members’ concerns about how the former regulations limited sales in circumstances where contractors have a pre-existing relationship or where equipment has to be tagged due to an unsafe condition (as obliged by TSSA regulations).

The proposed changes were not all welcomed with open arms. For example, a Ministry proposal to amend the CPA “to allow consumers to provide notice to a business to rescind their agreement within one year of having discovered that the business engaged in an unfair practice” was viewed as going too far, as it would put any contractor at risk of exposure beyond a reasonable timeframe for which they can plan – it might in fact allow customers to make claims many years after a sale, based on frivolous grounds.  HRAI suggested to the Ministry that there are sufficient avenues for addressing fraud and other new provisions in the CPA regulations should diminish the likelihood of fraud.

The Ministry has also proposed to amend the CPA to establish “administrative penalties” as a tool for more effective enforcement of the regulations.  HRAI agreed that administrative penalties can be an effective enforcement tool but stressed that “the way these are designed will require extensive consultation with the industry potentially affected.”

As a final comment, HRAI submitted that, for these CPA regulations to be effective, the Ministry should conduct broad-based consumer awareness campaign(s) to educate both consumers and contractors.  The Ministry should commit to a consumer education program that clearly spells out consumers’ rights and the process for making complaints. In addition, when/if penalties are imposed by the Ministry, they should be publicized for all the industry to see so that the penalties have the appropriate deterrent effect.

HRAI will continue this discussion with the Ministry over the next few months.  Some of the regulations may be passed into law fairly quickly but other elements (e.g. the administrative penalties) will require legislative changes that will take some time and further consultation.

For more information, contact Martin Luymes at 1-800-267-2231, ext. 235, or email mluymes@hrai.ca