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The House of Commons Standing Committee on Industry, Science and Technology (INDU) has released its report [pdf, 4.3MB] following the statutory review of Canada’s Anti-Spam Legislation (CASL) and the Committee has made a number of recommendations to “ensure the Act continues ‘to promote the efficiency and adaptability of the Canadian economy.'”

Ever since its enactment, CASL’s main challenge remains to balance, on the one hand, restricting the transmission of unsolicited commercial electronic messages in order to limit the costs associated with such messages and protecting Canadians against spam, and, on the other, allowing individuals and organizations to promote their lawful activities. Meeting this challenge requires clear legislative action that does not lead to unintended consequences.

The report has a total of 13 recommendations, ranging from the trivial to far more substantive. Recommendations 1 and 13 deal with the name of the Act itself, recommending that the Act be called the “Electronic Commerce Protection Act” (ECPA) as contrasted with the name that rolls off no one’s tongue: “An Act to promote the efficiency and adaptability of the Canadian economy by regulating certain activities that discourage reliance on electronic means of carrying out commercial activities, and to amend the Canadian Radio-television and Telecommunications Commission Act, the Competition Act, the Personal Information Protection and Electronic Documents Act and the Telecommunications Act“. Catchy, right?

The bulk of the recommendations incorporate the phrase “unintended cost of compliance”, evidence that the message has been received: CASL has led to unintended costs for Canadian businesses which ultimately are borne by consumers.

Three of the recommendations target the CRTC: increasing education efforts; sharing information with law enforcement agencies; and, increase transparency in its investigations and determinations of penalties.

The INDU Committee is recommending changes, made clear from the title of its report, “Canada’s Anti-SPAM Legislation: Clarifications Are In Order.” The report concludes with a clear message to the Government:

While improving guidance and education should be a priority moving forward, it can only achieve so much. The Act and its regulations require clarifications to reduce the cost of compliance and better focus enforcement. Provisions defining CEM, consent, and “business-to-business” messages, among others, warrant the attention of the Government of Canada. The Government will be in a better position to assess the impact of the coming into force of the private right of action once these clarifications are implemented.

As longtime readers of this blog are aware [just use search word “CASL” to see], I agree. Clarifications are in order.

For years, I have been writing about Canada’s well intentioned but misguided efforts to legislate against the scourge of spam.

Five and a half years ago, in 2009 I wrote about the potential for the legislation “to inadvertently chill some beneficial forms of electronic commerce communications.”

It isn’t that I like getting spam; or getting junk mail. The problem is that the Act seems to be banning electronic communications that would be completely legitimate in paper form. I’m not crazy about door-to-door sales people either, but we need to be careful about restricting communications in a democratic society. Instead, we can teach ourselves how to slam the door politely. And once in a while, we actually open our wallets and purchase something, due to an unsolicited communication, whether it was in person, on paper or transmitted electronically.

A year later, in 2010 I wrote that I was somewhat surprised with the response to the Act by people who normally stand up for civil liberties.

Typically, we see internet communications as being less restrictive than traditional media. We have so many people that talk about open access to information and actively promote it. I see so many cases of civil libertarians up in arms over attempts to block digital communications – even in cases where hard copies are stopped at the border or seized by police.

So it is somewhat satisfying to read on Barry Sookman’s blog that a new paper by Emir Crowne from University of Windsor’s Faculty of Law and Stephanie Provato says “the Act may not survive constitutional scrutiny as it unduly restricts freedom of speech.”

Will Canada’s anti-spam law (CASL) inhibit adoption of new technologies? Will it limit the participation of Canadian firms in exploring innovative new services and business models?

These were real questions that emerged from an exchange on Twitter earlier today.

As described by Wikipedia, iBeacon is the trademark for an indoor proximity system that Apple calls “a new class of low-powered, low-cost transmitters that can notify nearby iOS 7 devices of their presence.

That led to a real question:

Will Canadian development or adoption of beacon (or other technologies) be limited by the broad nature of the restrictions inherent in CASL?

Barry Sookman has an excellent blog post that strongly refutes the weak defense of Canada’s Anti-Spam Law that has been put forward as a desperate response to an outpouring of criticism of the “ludicrous regulatory overkill.”

For 8 years, I have been writing about the problem of legislation dealing with our right to be rude:

In a democratic society, I think you have the right to be stupid, you have the right to be rude and we should try to teach telephone etiquette, not legislate it.

A week later, still in May 2006, I wrote more directly about the hidden cost of spam, saying “I think that a democracy gives you the right to be merely offensive and annoying – otherwise, my brother would say that I should have been put behind bars years ago.”

In 2008, I warned “Worst case will see us get it wrong and introduce costs on legitimate businesses while doing nothing to stem the flow of the real garbage filling our inboxes.”

In 2010, I wrote, “the bill would be better titled the Electronic Commerce Restrictions Act: it discourages many efficiencies that should be available to businesses of all sizes in reaching out to new customers.”

As CASL was proceeding a year and a half ago, I cautioned, “we strayed too far from trying to target fraud. In doing so, Canada is going to cause harm to the adoption of digital technologies and electronic commerce.” At the end of the day, this translates into higher costs for consumers.

As Barry Sookman concluded in his post:

The Government should promptly suspend CASL’s operation until a Parliamentary Committee or special committee can review it and make recommendations on whether to kill it permanently or how to fix it. The Government could instead refer it to the Supreme Court of Canada for an opinion on CASL’s constitutionality. Either way, Canadians of all stripes would be put out of the collective misery of dealing with CASL.

The government couldn’t be happier. The CRTC has reported since the  that it has already received more than a thousand complaints since the anti-spam law took effect on Tuesday. CBC reported in the most dramatic fashion: CRTC flooded with more than 1,000 anti-spam complaints. “Flooded”!

The Industry Minister’s press secretary went onto Twitter boasting that this is evidence of how serious a problem we have:

How does the sudden tracking of complaints show spam is a serious problem? 10 years after there was an anti-spam task force – that’s right, 10 years – the press secretary to the Industry Minister says that 1000 complaints “shows this is a serious problem.”

The reality is that 1000 isn’t really such a large number. Remember that there are more than 30 million internet users in Canada and there are billions of spam messages being trapped by Canadians’ email systems every day – most never reaching the end user. The 1000 complaints from 35 million users should be compared to about 500 complaints being received by the CRTC every day for violations of the national Do Not Call List – a system that has been operating for more than 5 years already. There are only about 40% as many phone numbers in the DNCL as there are email users. So the CRTC was not “flooded” with complaints.

Indeed, just last week, CRTC chair Jean-Pierre Blais boasted that the commission was over-staffed in anticipation of CASL coming into effect: “we have more than enough human and technical resources to do whatever is needed to ensure the law is upheld.”

Unfortunately, the number of complaints doesn’t indicate anything about the effectiveness of the solution. Or the lack of effectiveness of this government’s solution. Or the cost to the economy of what has been imposed.

One might have hoped that 10 years would have produced better evidence.

Of course, proper evidence might have avoided the regulatory over-reach of Canada’s Anti-Spam Law (CASL). Jeffrey Graham, of Borden Ladner Gervais asks “Why would it not be enough for the law to simply provide that if there is an existing relationship, broadly defined, and an effective opt out right clearly identified in the promotional emails, the public interest is adequately protected?” In his OpEd in the Financial Post, he says that the compliance costs could be in the hundreds of millions of dollars.

In a commentary called “Spamaflop! Why Ottawa’s spam ban law is absurd and should be overturned“, Terence Corcoran cites Barry Sookman of McCarthy Tetrault in considering the impact on Canada’s economy:

The anti-spam law, he says, is an infringement on “commercial speech,” which is guaranteed under the Charter of Rights and Freedoms. The law “ignores that consumers benefit from receiving useful information about products and services” ‘ from businesses. It increases competition and expands consumers’ market knowledge.

Commercial Electronic Messages – and I mean otherwise legal, non-fraudulent, non-malicious messages – increase competition and expand market knowledge. Why would we want to block increased competition?

Recall from my blog post earlier this week that former Industry Minister Tony Clement claimed that 35 million Canadians disagree with my views on CASL.

If there are consumers who believe that CASL is worth the costs of compliance for Canada’s business community, I wonder if they understand the costs that are ultimately being borne by them? The direct costs will ultimately be passed on to Canadian consumers, as will the costs associated with reduced competition and reduced market knowledge.

Our government has imposed yet another impediment to the adoption of e-commerce and information technology in Canada. It is another contributor to lower levels of competition across the board in Canada’s economy.