Points Taken: Legislative Updates in Rewards Programs

Under Schedule 5 of Bill 46, Protect Ontario by Cutting Red Tape Act, 2025 (“Bill 46”), the Ontario
government plans to introduce legislative amendments to the existing rules under the Consumer
Protection Act, 2002, SO 2002, c 30, Sched A (“CPA”) that govern consumer agreements under
which rewards points are offered. If your business, directly or through a third-party supplier, offers
rewards points, you should follow this legislative development to prepare better if the proposed
legislative amendments become law.

This is a significant legislative development because, if the proposed amendments become law,
every new or existing consumer agreement under which rewards points are offered will need to
be made, amended or extended in accordance with the new legislative requirements.

If passed, the legislative amendments would come into force on a day to be named by order of
the Lieutenant Governor in Council, except for the technical and consequential amendments,
which would come into force on the day Bill-46 receives Royal Assent.

High-level overview of the proposed legislative amendments:

The CPA safeguards consumer rights in Ontario, with Section 47.1 of the CPA governing
consumer agreements under which rewards points are offered by rewards points suppliers.

Who is a rewards points supplier?

Under the CPA, a supplier is a person who is in the business of selling, leasing or trading in goods
or services or is otherwise in the business of supplying goods or services, including the supply of
rewards points, and includes an agent of the supplier and a person who holds themselves out to
be a supplier or an agent of the supplier.

What constitutes a consumer agreement?

Under the CPA, the consumer agreement is an agreement between a supplier and a consumer in
which:

a. the supplier agrees to supply goods or services for payment, or
b. the supplier agrees to provide rewards points to the consumer, on the supplier’s own behalf or
on behalf of another supplier, when the consumer purchases goods or services or otherwise acts
in a manner specified in the agreement.

The proposed legislative amendments under Bill 46 that may amend Section 47.1 of the
CPA include the following:

a. existing and new consumer agreements under which rewards points are provided shall
be made, amended or extended in accordance with prescribed requirements;
b. rewards points suppliers shall disclose prescribed information to consumers prior to
consumers entering into the consumer agreement;
c. consumer agreements under which rewards points are provided shall not allow for the
expiry, cancellation, or suspension of rewards points, except as permitted by the
regulations;
d. if a consumer is a party to an agreement under which rewards points expire or are
cancelled contrary to regulatory requirements, the consumer may request that the rewards
points supplier credit back any rewards points that were expired, cancelled, or suspended;
e. if there is a dispute, consumers shall submit a written request to the rewards points
supplier within the prescribed time and shall comply with regulatory requirements;
f. rewards points suppliers shall, within the prescribed period, acknowledge the
consumer’s request. If the request meets the prescribed requirements, the rewards points
supplier shall, within the prescribed period, credit back any rewards points to the consumer
or, after an investigation, send a written notice to the consumer explaining why the rewards
points supplier is of the opinion the consumer is not entitled to a credit of rewards points
under the CPA;
g. consumer will be entitled to commence an action against the rewards points supplier to
recover the rewards points to which the consumer is entitled;
h. rewards points supplier or other person shall not be entitled to compensation if
proposed legislative changes become law;
i. failure to act or acting contrary to the CPA or regulations under it will constitute
expropriation or injurious affection under the Expropriations Act; and
j. the Lieutenant Governor in Council will receive additional regulation-making powers to
make regulations governing matters related to consumer agreements under which rewards
points are provided, and if the regulation so provides, it may apply retroactively to existing
consumer agreements under which rewards points are provided.

Practical suggestions to prepare ahead of proposed legislative changes:

1. If you are a rewards points supplier or use a third party to offer rewards points on behalf of your business, assess how many consumer agreements you have under which rewards points are offered.
2. Ensure that consumer agreements under which rewards points are offered are readily accessible.
3. Consult with your legal team at Keyser Mason Ball, LLP regarding the next steps.

If you have specific questions or need more information on how to prepare better for the proposed
legislative amendments, please contact your Franchise, Retail, and Distribution team at Keyser
Mason Ball, LLP.

Key contact:
Amy M. Delisle, Partner (Franchise, Retail & Distribution)
adelisle@kmblaw.com
905.276.0422