Navigating Canada’s Anti-Spam Laws: Key CASL Considerations for Small Businesses

For small and medium-sized businesses (SMBs), marketing is essential for growth and customer engagement. However, failing to comply with Canada’s Anti-Spam Legislation (CASL) can lead to costly penalties, reputational damage, and loss of consumer trust. Unlike large corporations with dedicated legal teams, SMBs must navigate these regulations carefully to avoid unintended violations. This guide breaks down the major dos and don’ts to help SMBs run effective and legally compliant marketing campaigns.

Why CASL Compliance Matters for SMBs

Many SMBs rely heavily on digital marketing, i.e., emails, text messages, and social media, to connect with customers. However, CASL imposes strict requirements on sending commercial electronic messages (CEMs). A misstep, such as failing to obtain proper consent or using deceptive marketing tactics, can result in fines up to $10 million per violation. More importantly, non-compliance can erode trust, making it harder for businesses to build strong customer relationships.

Understanding CASL and implementing best practices will not only keep your business legally compliant but also help establish credibility and improve customer engagement.

DOs: Best Practices for SMBs

1. Obtain Express or Implied Consent
   SMBs should always get clear permission before sending marketing messages. Express consent requires an opt-in mechanism, either written or verbal, where customers knowingly agree to receive messages. Implied consent can be inferred to an existing business relationship. Implied consent applies only in limited situations, such as when a customer has made a purchase within the last two years. Additionally, SMBs should be mindful of the time limits on implied consents which may range from 6 months to 2 years following the last transaction between the customer and the business.
2. Clearly Identify Your Business
   Customers need to know who is contacting them. Each CEM must include the sender’s name, business name, mailing address, and a valid contact method such as an email, phone number, or website.
3. Include a Simple Unsubscribe Option
   SMBs must ensure that every marketing email or message contains a clear, prominently displayed and functional unsubscribe link. The unsubscribe link or alternative mechanism must be accessible to the recipient for 60 days following receipt of the CEM containing it, and requests to unsubscribe must be honored within 10 business days, without requiring additional steps from the recipient.
4. Keep Records of Consent
   Document all instances of consent, including when and how customers opted in. Proper record-keeping is crucial in case your business ever faces a CASL compliance investigation.
5. Ensure Transparency in Marketing Messages
   SMBs must avoid misleading subject lines or deceptive messaging. CASL prohibits false representations in any marketing content, meaning messages should accurately reflect their purpose.

DON’Ts: Mistakes That Can Cost SMBs

1. Don’t Assume Implied Consent Covers Everything
   Relying too much on implied consent is risky and time-limited. If a customer hasn’t purchased from you in over two years, you need fresh consent before sending promotional emails.
2. Don’t Use Pre-Checked Consent Boxes
   Customers must actively opt in to receive messages. Using pre-checked boxes or automatic subscriptions violates CASL and could result in penalties.
3. Don’t Ignore Third-Party Marketing Services
   If your business uses an external agency for email marketing, ensure they follow CASL regulations, including proper identification of your business. SMBs are legally responsible for messages sent on their behalf.
4. Don’t Hide Your Identity
   Some businesses try to mask their identity to avoid spam filters. This is illegal under CASL. Always be transparent about who is sending the message by including the sender’s name, your business name and contact information.
5. Don’t Assume CASL Enforcement Won’t Affect SMBs
   While larger companies have received some of the biggest fines, small businesses are not exempt from CASL enforcement. Regulators target all businesses that violate the law, regardless of size.

How SMBs Can Stay Ahead

CASL compliance isn’t just about avoiding fines, it’s about fostering customer trust and engagement. SMBs that follow CASL’s best practices will benefit from a stronger reputation, higher customer retention, and more effective marketing campaigns. By implementing the right policies now, small and medium-sized businesses can avoid legal troubles and build sustainable, long-term relationships with their customers.

If you have any questions about Canada’s anti-spam legislation, or need guidance tailoring your marketing practices to meet regulatory standards, please contact Layla Makhzoumi (lmakhzoumi@kmblaw.com) or Jonfranco Monaco (jmonaco@kmblaw.com).