A Warning to Contractors and a Lesson for Regulators: Enforcement and Penalties Under the Consumer Protection Act

WeirFoulds LLP | JUNE 12, 2017
Jordan Glick, Jordan Stone

Virtually every regulator engages in some form of consumer protection. Concerns relating to false billing, misleading advertising, and the failure to deliver products and services can be found in nearly every regulatory statute. The vigour with which regulators seek the most serious remedies relating to these consumer protection issues is, however, quite variable. In some cases, the media has criticized regulators for not revoking a registrant's registration when they have been found guilty of professional misconduct for false or misleading billings.

Our provincial government's approach to addressing consumer protection issues is more aggressive, involving provincial offence proceedings where significant penalties, often involving large fines, jail, and probation are sought and received. We have firsthand experience, having recently represented clients in matters involving violations of the Consumer Protection Act, 20021  (the "CPA"). From our recent experience, we provide two important takeaways from the penalties being imposed for violations of the CPA. First, a charge under the CPA should not be taken lightly, as both the Ministry of Government and Consumer Protection (the "Ministry"), who administer the CPA, and the courts, view these matters as serious and are willing to order significant sentences for violations of the CPA. Second, professional regulators ought to carefully consider the penalties that they are seeking in cases involving consumer protection issues, as a new bar is being set by the province and by the courts.

Enforcement under the CPA

The CPA is aimed at protecting consumers by creating rules surrounding consumer transactions (i.e. any act or instance of conducting business or other dealings with a consumer)2. A breach of those rules is an offence that is prosecuted in provincial court against the individual and/or the corporation involved (including its officers and directors). While the CPA applies broadly to cover most forms of consumer transactions, the Ministry seems to have primarily targeted the residential construction industry (either by design or because the bulk of complaints have arisen in the construction context).

A conviction under the CPA can result in significant penalties. An individual convicted of an offence under the Act can receive up to two years less a day in prison and/or a fine of up to $50,0003. A corporation convicted of an offence may be fined up to $250,000. In addition, a person convicted under the CPA may be ordered to pay compensation or make restitution and the Ministry has typically insisted that restitution orders be paid out in a schedule contained within a probation order (rendering the nonpayment of restitution an offence unto itself)4. The fact that these penalties exist is not unusual for provincial offences - what is unusual is that convictions under the CPA are now routinely resulting in orders for significant jail time.

Penalties Under the CPA

A review of the Ministry's Bulletins provides numerous illustrations of the significant penalties handed down for violations of the CPA:

Key Take-Aways

The Ministry is taking matters of consumer protection seriously. If you or your business is charged under the CPA, it would be wise to retain experienced legal counsel as the courts have shown a willingness to order lengthy jail sentences. If you are involved in regulating professionals, in light of the new bar being set by the government, you should consider the penalties you are seeking for professionals found guilty of professional misconduct for consumer protection matters, such as false or misleading billings, in order to avoid public criticism.

[1]SO 2002, c 30, Sch A
[2]CPA, s 1 and 2(1).
[3]CPA, s 116(5).
[4]CPA, s 117.

Special thank you to WeirFoulds student-in-law, Jordan Stone for his valuable contribution.

The information and comments herein are for the general information of the reader and are not intended as advice or opinion to be relied upon in relation to any particular circumstances. For particular application of the law to specific situations, the reader should seek professional advice.