Bill C-67

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First Reading

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	(b) disclosure is made, in a fair, reasonable and timely manner, of the price of any product whose supply or use is being promoted and any material restrictions, terms or conditions applicable to its deliv ery; and
	(c) disclosure is made, in a fair, reasonable and timely manner, of such other informa tion in relation to the product as may be prescribed by the regulations.
Deceptive telemarket- ing	(3) No person who engages in telemarket ing shall
	(a) make a representation that is false or misleading in a material respect;
	(b) conduct or purport to conduct a contest, lottery or game of chance, skill or mixed chance and skill, where
	(i) the delivery of a prize or other benefit to a participant in the contest, lottery or game is, or is represented to be, condi tional on the prior payment of any amount by the participant, or
	(ii) adequate and fair disclosure is not made of the number and approximate value of the prizes, of the area or areas to which they relate and of any fact within the person's knowledge, that affects materially the chances of winning;
	(c) offer a product at no cost, or at a price less than the fair market value of the product, in consideration of the supply or use of another product, unless fair, reason able and timely disclosure is made of the fair market value of the first product and of any restrictions, terms or conditions appli cable to its supply to the purchaser; or
	(d) offer a product for sale at a price grossly in excess of its fair market value, where delivery of the product is, or is represented to be, conditional on prior payment by the purchaser.
General impression to be considered	(4) In a prosecution for a contravention of paragraph (3)(a), the general impression con veyed by a representation as well as its literal meaning shall be taken into account in determining whether or not the representation is false or misleading in a material respect.
Exception	(5) The disclosure of information referred to in paragraph (2)(b) or (c) (3)(b) or (c) must be made during the course of a telephone communication unless it is established by the accused that the information was disclosed within a reasonable time before the commu nication, by any means, and the information was not requested during the telephone com munication.
Due diligence	(6) No person shall be convicted of an offence under this section who establishes that the person exercised due diligence to prevent the commission of the offence.
Offences by employees or agents	(7) Notwithstanding subsection (6), in the prosecution of a corporation for an offence under this section, it is sufficient proof of the offence to establish that it was committed by an employee or agent of the corporation, whether or not the employee or agent is identified, unless the corporation establishes that the corporation exercised due diligence to prevent the commission of the offence.
Liability of officers and directors	(8) Where a corporation commits an of fence under this section, any officer or director of the corporation who is in a position to direct or influence the policies of the corporation in respect of conduct prohibited by this section is a party to and guilty of the offence and is liable to the punishment provided for the offence, whether or not the corporation has been prosecuted or convicted, unless the officer or director establishes that the officer or director exercised due diligence to prevent the com mission of the offence.
Offence and punishment	(9) Any person who contravenes subsection (2) or (3) is guilty of an offence and liable
	(a) on conviction on indictment, to a fine in the discretion of the court or to imprison ment for a term not exceeding five years or to both; or
	(b) on summary conviction, to a fine not exceeding two hundred thousand dollars or to imprisonment for a term not exceeding one year or to both.
Sentencing	(10) In sentencing a person convicted of an offence under this section, the court shall consider, among other factors, the following aggravating factors:
	(a) the use of lists of persons previously deceived by means of telemarketing;
	(b) characteristics of the persons to whom the telemarketing was directed, including classes of persons who are especially vul nerable to abusive tactics;
	(c) the amount of the proceeds realized by the person from the telemarketing;
	(d) previous convictions of the person under this section or under section 52 in respect of conduct prohibited by this section; and
	(e) the manner in which information is conveyed, including the use of abusive tactics.
	14. Sections 53 and 54 of the Act are repealed.
1992, c. 14, s. 1	15. Paragraph 55(3)(b) of the Act is replaced by the following:
	(b) on summary conviction, to a fine not exceeding two hundred thousand dollars or to imprisonment for a term not exceeding one year or to both.
1992, c. 14, s. 1	16. Paragraph 55.1(3)(b) of the Act is replaced by the following:
	(b) on summary conviction, to a fine not exceeding two hundred thousand dollars or to imprisonment for a term not exceeding one year or to both.
R.S., c. 27 (1st Supp.), s. 189, c. 19 (2nd Supp.), s. 35(F)	17. Sections 56 to 60 of the Act are repealed.
R.S., c. 19 (2nd Supp.), s. 38	18. Subsections 65(1) and (2) of the Act are replaced by the following:
Contraven- tion of Part II provisions	65. (1) Every person who, without good and sufficient cause, the proof of which lies on that person, fails to comply with an order made under section 11 and every person who contravenes subsection 15(5) or 16(2) is guilty of an offence and liable on summary convic tion or on conviction on indictment to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding two years or to both.
Failure to supply information	(2) Every person who, without good and sufficient cause, the proof of which lies on the person, contravenes section 114 or 123 is guilty of an offence and liable on summary conviction or on conviction on indictment to a fine not exceeding fifty thousand dollars.
	19. The Act is amended by adding the following after section 65:
Contraven- tion of Part VII.1 or VIII order	66. Any person who contravenes an order under Part VII.1, except under paragraph 74.1(1)(c), or under Part VIII is guilty of an offence and liable
	(a) on conviction on indictment, to a fine in the discretion of the court or to imprison ment for a term not exceeding five years or to both; or
	(b) on summary conviction, to a fine not exceeding twenty-five thousand dollars or to imprisonment for a term not exceeding one year or to both.
	20. The portion of section 68 of the Act before paragraph (a) is replaced by the following:
Venue of prosecutions	68. Notwithstanding any other Act, a pro secution for an offence under Part VI or section 66 may be brought, in addition to any place in which the prosecution may be brought by virtue of the Criminal Code,
	21. Section 73 of the Act is replaced by the following:
Jurisdiction of Federal Court	73. (1) Subject to this section, the Attorney General of Canada may institute and conduct any prosecution or other proceedings under section 34, any of sections 45 to 51 and section 61 or, where the proceedings are on indict ment, under section 52, 52.1, 55, 55.1 or 66 , in the Federal Court-Trial Division, and for the purposes of the prosecution or other proceedings, the Federal Court-Trial Divi sion has all the powers and jurisdiction of a superior court of criminal jurisdiction under the Criminal Code and under this Act.
No jury	(2) The trial of an offence under Part VI or section 66 in the Federal Court-Trial Divi sion shall be without a jury.
Appeal	(3) An appeal lies from the Federal Court- Trial Division to the Federal Court of Appeal and from the Federal Court of Appeal to the Supreme Court of Canada in any prosecution or proceedings under Part VI or section 66 of this Act as provided in Part XXI of the Criminal Code for appeals from a trial court and from a court of appeal.
Proceedings optional	(4) Proceedings under subsection 34(2) may in the discretion of the Attorney General of Canada be instituted in either the Federal Court-Trial Division or a superior court of criminal jurisdiction in the province but no prosecution shall be instituted against an individual in the Federal Court-Trial Divi sion in respect of an offence under Part VI or section 66 without the consent of the individu al.
R.S., c. 19 (2nd Supp.), s. 44	22. Section 74 of the Act is repealed.
	23. The Act is amended by adding the following before the heading ``PART VIII'' before section 75:
	PART VII.1
	DECEPTIVE MARKETING PRACTICES
	Reviewable Matters
Misrepresen- tations to public	74.01 (1) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever,
	(a) makes a representation to the public that is false or misleading in a material respect;
	(b) makes a representation to the public in the form of a statement, warranty or guaran tee of the performance, efficacy or length of life of a product that is not based on an adequate and proper test thereof, the proof of which lies on the person making the representation; or
	(c) makes a representation to the public in a form that purports to be
	(i) a warranty or guarantee of a product, or
	(ii) a promise to replace, maintain or repair an article or any part thereof or to repeat or continue a service until it has achieved a specified result,
	if the form of purported warranty or guaran tee or promise is materially misleading or if there is no reasonable prospect that it will be carried out.
Ordinary price: suppliers generally	(2) Subject to subsection (3), a person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirectly, any business interest, by any means whatever, makes a representation to the public concern ing the price at which a product or like products have been, are or will be ordinarily supplied where suppliers generally in the relevant geographic market, having regard to the nature of the product,
	(a) have not sold a substantial volume of the product at that price or a higher price within a reasonable period of time before or after the making of the representation, as the case may be; and
	(b) have not offered the product at that price or a higher price in good faith for a substantial period of time recently before or immediately after the making of the repre sentation, as the case may be.
Ordinary price: supplier's own	(3) A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of a product or for the purpose of promoting, directly or indirect ly, any business interest, by any means whatever, makes a representation to the public as to price that is clearly specified to be the price at which the product or like products have been, are or will be ordinarily supplied by the person making the representation where that person, having regard to the nature of the product and the relevant geographic market,
	(a) has not sold a substantial volume of the product at that price or a higher price within a reasonable period of time before or after the making of the representation, as the case may be; and
	(b) has not offered the product at that price or a higher price in good faith for a substantial period of time recently before or immediately after the making of the repre sentation, as the case may be.
Saving	(4) Subsections (2) and (3) do not apply to a person who establishes that a representation as to price is not false or misleading in a material respect in the circumstances.
General impression to be considered	(5) In proceedings under this section, the general impression conveyed by a representa tion as well as its literal meaning shall be taken into account in determining whether or not the representation is false or misleading in a material respect.
Representa- tion as to reasonable test and publication of testimonials	74.02 A person engages in reviewable conduct who, for the purpose of promoting, directly or indirectly, the supply or use of any product, or for the purpose of promoting, directly or indirectly, any business interest, makes a representation to the public that a test has been made as to the performance, efficacy or length of life of a product by any person, or publishes a testimonial with respect to a product, unless the person making the repre sentation or publishing the testimonial can establish that
	(a) such a representation or testimonial was previously made or published by the person by whom the test was made or the testimo nial was given, or
	(b) such a representation or testimonial was, before being made or published, approved and permission to make or publish it was given in writing by the person by whom the test was made or the testimonial was given,
	and the representation or testimonial accords with the representation or testimonial pre viously made, published or approved.
Representa- tions accompany- ing products	74.03 (1) For the purposes of sections 74.01 and 74.02, a representation that is
	(a) expressed on an article offered or displayed for sale or its wrapper or contain er,
	(b) expressed on anything attached to, inserted in or accompanying an article offered or displayed for sale, its wrapper or container, or anything on which the article is mounted for display or sale,
	(c) expressed on an in-store or other point- of-purchase display,
	(d) made in the course of in-store, door-to- door or telephone selling to a person as ultimate user, or
	(e) contained in or on anything that is sold, sent, delivered, transmitted or made avail able in any other manner to a member of the public,
	shall be deemed to be made to the public by and only by the person who causes the repre sentation to be so expressed, made or con tained, subject to subsection (2).
Representa- tions from outside Canada	(2) Where a person referred to in subsection (1) is outside Canada, a representation de scribed in paragraph (1)(a), (b), (c) or (e) shall, for the purposes of sections 74.01 and 74.02, be deemed to be made to the public by the person who imports into Canada the article, thing or display referred to in that paragraph.
Deemed representa- tion to public	(3) Subject to subsection (1), a person who, for the purpose of promoting, directly or indirectly, the supply or use of a product or any business interest, supplies to a wholesaler, retailer or other distributor of a product any material or thing that contains a representation of a nature referred to in section 74.01 shall be deemed to make that representation to the public.
Definition of ``bargain price''	74.04 (1) For the purposes of this section, ``bargain price'' means
	(a) a price that is represented in an adver tisement to be a bargain price by reference to an ordinary price or otherwise; or
	(b) a price that a person who reads, hears or sees the advertisement would reasonably understand to be a bargain price by reason of the prices at which the product advertised or like products are ordinarily supplied.
Bait and switch selling	(2) A person engages in reviewable conduct who advertises at a bargain price a product that the person does not supply in reasonable quantities having regard to the nature of the market in which the person carries on busi ness, the nature and size of the person's business and the nature of the advertisement.
Saving	(3) Subsection (2) does not apply to a person who establishes that
	(a) the person took reasonable steps to obtain in adequate time a quantity of the product that would have been reasonable having regard to the nature of the advertise ment, but was unable to obtain such a quantity by reason of events beyond the person's control that could not reasonably have been anticipated;
	(b) the person obtained a quantity of the product that was reasonable having regard to the nature of the advertisement, but was unable to meet the demand therefor because that demand surpassed the person's reason able expectations; or
	(c) after becoming unable to supply the product in accordance with the advertise ment, the person undertook to supply the same product or an equivalent product of equal or better quality at the bargain price and within a reasonable time to all persons who requested the product and who were not supplied with it during the time when the bargain price applied, and the person fulfilled the undertaking.
Sale above advertised price	74.05 (1) A person engages in reviewable conduct who advertises a product for sale or rent in a market and, during the period and in the market to which the advertisement relates, supplies the product at a price that is higher than the price advertised.

Bill C-67

PART VII.1

DECEPTIVE MARKETING PRACTICES

Reviewable Matters