1 June 2015
The views of Canadians on the harmonization of consumer protection standards
The rules respecting consumer protection vary from province to province. This can cause problems for merchants, who they must adapt to them, and for consumers when they buy goods in a province other than the one where they reside. The exponential growth of e-commerce in Canada has exacerbated the seriousness of this issue. In 2012, online orders by Canadians increased by 24% compared to 2010, reaching a total of $18.9 billion.
Our literature review and our interviews conducted with experts3 allowed us to identify six problem areas. These are e-commerce, consumer credit, legal warranties, class action litigation (and related clauses), gift cards and cell phones. Our research focuses on these six topics.
We also studied the laws regulating these areas in ten provinces and three territories. We observed that consumers are protected by the laws of the province in which their purchase is made. Accordingly, when consumers make a purchase in person in another province, they are protected by the laws of that province.
Our research also permitted us to discover how consumers’ rights vary depending on where they live. For example, in certain provinces, consumers are protected by the laws of their province, even if they are making a purchase online from a merchant located in another province. Also, in some provinces, there are prohibitions against including clauses in consumer contracts that either restrict access to the courts or compel consumers to file their case in another jurisdiction. In addition, the laws respecting legal warranties give consumers living in some provinces better protection than others.
We also conducted a web survey of 2000 Canadians. This survey reveals that consumers know very little about their rights. This lack of information is particularly apparent in certain areas. For example, among consumers protected by the laws of their province, very few know that they are protected when they purchase goods online from a merchant located in another province. Likewise, an overwhelming majority of respondents are unaware of their rights with respect to class action litigation (including afferent clauses) and cell phones. Finally, Canadian consumers are also confused as to the applicable law with regard to legal warranties.
Although consumers do not have a good understanding of the laws that are meant to protect them, few have reported experiencing problems regarding a purchase made in another province. The problems reported were either related to a defective product, a disagreement over payments or a warranty that was not honoured.
In addition, our survey reveals that as a general rule, consumers would like the laws to be harmonized across the country. They especially want this be the case for consumer credit, for class action litigation, for cell phones and for gift cards. They also stated that they want better access to information on consumer protection.
The consumers’ opinions will certainly be of interest to legislators in the provinces and the Consumer Measures Committee when they have to decide how to better protect Canadian consumers with regard to the six topics addressed in this report.