CASL Part II - What it Means for RCAAAs

Published May 12, 2014

Building on the March 25 posting by LeeAnn Cupidio, we wanted to delve a little further into the somewhat confusing situation faced by Registered Canadian Amateur Athletic Associations (RCAAAs) regarding the applicability of the Canada’s Anti Spam Legislation (CASL). Of particular interest is whether or not the exception of implied consent is applicable to RCAAAs.

(If you are not sure whether your sport organization is a RCAAA, here is a list published by Canada Revenue Agency).

Within the legislation, there is a specific exemption given to registered charities with regards to Commercial Electronic Messages (CEMs) if the primary purpose is to solicit donations. This means that charities can rely on implied consent from those recipients who have donated or volunteered over the past two years and do not need to have written or oral (explicit) consent. Implied consent means that due to the nature of the existing non-business relationship, and the fact that there has been previous communication or activities undertaken between the charity and the recipient, it is implied that the recipient has agreed to continued correspondence until such time as the recipient requests the communication to cease.

As such, the charity would be able to continue to send donation CEMs to previous donors or volunteers in the appropriate form. However, charities are still required to comply with the CASL if the CEM contains other revenue generating items (beyond soliciting for a donation), which require explicit consent. RCAAAs are recognized as charities and are thereby able to issue tax receipts for income tax purposes. However, under the CASL, they are not entitled to rely on the implied consent exemption available to other registered charities for donation CEMs.

An additional section of the legislation states that non-profit organizations which are a “club, association or voluntary organization” will have implied consent from those recipients who were members of the organization in the prior two years from the date that the donation CEM was sent. In defining “club, association or voluntary organization”, it is unclear if the exemption applies to RCAAAs. Furthermore, there is the added complexity that most national sport organizations do not have individuals as members.

Given the confusion about RCAAAs and the CASL, it is hoped that the government will provide clarification at some point in the near future in regards to the applicability of the implied consent exemption. Until that time, we recommend that RCAAAs and other sport organizations err on the side of caution by presuming that all CEMs require explicit consent, and therefore take steps to obtain that consent.

With a large portion of the CASL coming into effect on July 1, 2014, we are recommending that over the next few months, all RCAAAs and other sport organizations undertake a “re-subscribe” campaign for all of their email distribution lists. This confirmation email should ask recipients to reconfirm their agreement to continue to receive email communications and CEMs from the organization, including such things as newsletters, information sheets, advertising of events or camps, fundraising and promotional materials.

Those who indicate they do not wish to receive these materials or those who do not reply within a reasonable time should be removed from the distribution list. While CASL only applies to CEMs, this blanket process will serve to ensure that all recipients have given explicit consent to receive the communication and will limit the possibility of error in the future.

For those organizations who rely on third party distribution of their materials, the CASL requires that the originating organization verify that the third party is adhering to CASL. In addition, senders of CEMs located outside of Canada are also governed by CASL if the recipient of the CEM is located in Canada.

The potential penalties associated with the CASL are significant. Over the coming year, we would expect an ongoing education period for organizations to comply with the legislation. In the short term, we encourage organizations to act quickly to ensure they have the appropriate consents and formats in place for their communication tools.

The CASL will certainly change the way organizations communicate in the future. If you would like additional information specific to your organization, please contact Steve Indig (sji@sportlaw.ca) or LeeAnn Cupidio (llc@sportlaw.ca).