Alberta Proposes Significant Amendments to Consumer Protection Legislation
On November 29, 2017, the Government of Alberta introduced Bill 31: A Better Deal for Consumers and Businesses Act (the “Bill”) setting out proposed changes to the Fair Trading Act (the “Act”), including changing the name of the Act to the Consumer Protection Act, consistent with the name used for such legislation in other provinces in Canada.
The Bill proposes significant changes to the Act, including the following:
- Consumer Bill of Rights – A Consumer Bill of Rights is to be established to highlight the rights and protections provided to consumers under the Act. While it will not have separate legal force, it could be persuasive when interpreting provisions of the Act.
- Restrictions on Unilateral Amendments – A supplier’s right to make unilateral changes to a “substantive term” of a transaction with a consumer for the “continuing or periodic supply of goods or services” will be restricted, and a consumer will be able to cancel such a transaction once notice of such a change has been received. Some other provinces deal with unilateral changes as part of the regulation of “negative option practices” or the providing of “unsolicited goods and services”. Unlike some of these provinces, Alberta proposes to treat a term that “relates to price” as a “substantive term”. Changes to substantive terms will require either express consent or that the underlying contract provide for such changes and that the supplier give at least 60 days and not more than 120 days’ notice of such changes. Regulations yet to be published will prescribe exceptions to these general provisions and requirements for compliance.
- Prohibition of Mandatory Arbitration Clauses – Mandatory arbitration clauses will not be enforceable. This is consistent with legislation in a number of other provinces, as well as court decisions which have found that such clauses contravene the non-waiver of rights provisions in consumer protection legislation.
- Additional Remedies – Consumers will be given a statutory right of action for damages due to any contravention of the Act. Currently, consumers only have a statutory right of action if they suffer damage or loss due to an unfair practice. This statutory right does not apply to credit transactions, for which separate remedies are provided under the Act.
- Additional Regulation of High-Cost Products – The “high-cost credit business” is to be regulated. Only Manitoba currently regulates this layer of the credit market – so-called “sub prime” – although regulation has been proposed in both Ontario and Quebec. The “high-cost credit business” involves offering, arranging for or entering into credit agreements that provide for an interest rate of 32% or more, and includes a lease but not a payday loan. In addition to the requirement to be licensed, lenders who operate in this market will have to comply with requirements for advertising, disclosure and the form and content of credit agreements.
In addition, the Bill addresses a number of other items, including negative consumer reviews, ticket sales and resales, veterinary services, car sales and repairs, and changes to the Alberta Motor Vehicle Industry Council.
Related regulations are expected to be developed and issued for comment over the course of 2018.