Summary#

Bill 142, Better for Consumers, Better for Businesses Act, 2023, was enacted as Chapter 23 of Ontario’s 2023 statutes. It repeals and replaces the Consumer Protection Act, 2002, amends the Consumer Reporting Act and makes related changes to other Acts. Its stated goal is to protect and inform consumers and promote fairness in the marketplace.

• The new Consumer Protection Act, 2023 sets rules for consumer transactions in Ontario, including clear disclosures, bans on unfair practices and a rule that contract ambiguities are interpreted in the consumer’s favour.
• It creates or changes consumer rights and supplier duties for certain contracts, credit agreements, leases and prepaid purchase cards. These include cancellation rights, refunds and limits on charges.
• It gives the Minister, Director, inspectors and investigators enforcement powers, including inspections, orders and administrative penalties of up to $50,000 for prescribed violations.
• Consumer reporting agencies must use a consumer-score method similar to the one they would most commonly use for a creditor’s request. Consumers may add a written explanatory statement of up to 200 words to their file, which must accompany relevant reports.
• The Consumer Reporting Act changes also add inspection powers and a consumer right to sue for damages caused by a breach. The maximum fines shown in the amendments rise from $25,000 to $50,000 and from $100,000 to $250,000.

What it means for you#

• Consumers: Suppliers must make required disclosures clear, easy to understand and prominent. Consumers may have a 10-day cancellation period for named contracts, including direct contracts, timeshares and personal development services contracts. Other cancellation and refund rights apply in specified situations.
• Consumers with timeshares: A consumer may terminate a timeshare contract on or after its 25th anniversary, subject to notice, any fee set by regulation and other prescribed requirements. This rule can apply to existing contracts.
• Borrowers and lessees: Borrowers may repay all or part of fixed credit without a prepayment penalty, subject to the Act’s rules. The Act also limits default charges and permits borrowers to end optional continuing services with notice. Lease protections apply to specified leases.
• Consumers with credit files: You may ask an agency to add, amend or remove an explanatory statement. The agency must include it in reports containing related information. A new right to sue applies for damages caused by a breach of the Consumer Reporting Act or its regulations.
• Businesses and credit reporting agencies: They must follow applicable disclosure, contract and other rules. Inspectors may inspect business premises, demand records and ask questions. A dwelling is excluded from ordinary inspections; entry to a dwelling may require a search warrant.
• Current status: The new Consumer Protection Act, 2023 is enacted, but its schedule says it starts on a day named by proclamation. The supplied material does not establish whether that proclamation has happened. Some Consumer Reporting Act changes also have separate start rules. The bill text does not set up an application or review process for every consumer contract.

Money#

No cost information is in the available material.

• The text gives no estimate for government spending, enforcement staffing or business compliance costs. It does not specify a new tax or appropriation.
• The Director may impose administrative penalties of up to $50,000 for prescribed violations. Offence convictions can carry fines of up to $100,000 for an individual, or $500,000 for a corporation, and an individual may also face imprisonment of up to two years less a day.
• The Consumer Reporting Act amendments raise the maximum fines shown in the text, but no expected fine revenue is given.

What is unclear#

• Many requirements depend on regulations, including which contracts are covered, disclosure details, fees, cancellation rules and the timeshare termination fee.
• The supplied material does not establish when the new consumer Act or each delayed Consumer Reporting Act provision took effect.
• It does not give cost estimates for government enforcement or for businesses that must comply.
• The existing Consumer Protection Act, 2002 and the full current Consumer Reporting Act were not supplied, so I could not verify all changes against current law. The explanatory note says the new consumer Act replaces the 2002 Act.
• The Act gives examples of unfair practices, but does not define every term that may affect how a case is decided.

Case for#

• The bill appears intended to make consumer rights easier to use by requiring clear disclosures and making contract ambiguities count in the consumer’s favour.
• Cancellation, refund and credit-report rights could give consumers ways to respond to certain unfair practices or errors.
• Inspection powers, orders and penalties could help enforce rules; the bill also allows a person to appeal an administrative penalty to the Tribunal.

Case against#

• Many details depend on future regulations, so consumers and businesses cannot determine from the Act alone how some rules will work.
• Administrative penalties can be imposed without a hearing first and can apply even if a person took reasonable steps to prevent a breach or honestly relied on mistaken facts. An appeal is available, but the initial decision may still be a concern.
• The timeshare rules can apply to existing contracts, and regulations may modify or extinguish rights or interests already acquired under them.
• The bill adds inspection and enforcement powers, but the supplied material gives no estimate of their cost or detail on how often they will be used.