Advertising law has a reputation for being something only national brands need to worry about. In practice, the rules apply to a Brampton furniture store’s Boxing Week flyer, a Google listing for a local HVAC installer, a tutoring company’s Instagram post and a home-based business’s website. The statute speaks of representations made to the public “by any means whatever,” and it applies to small operators as well as large ones.
Most small-business owners who run into trouble did not set out to fool anybody. They copied a competitor’s “was/now” pricing, let staff write a few reviews, or repeated a supplier’s claim that a product is “100 per cent eco-friendly” without asking for proof. Those habits are worth examining, particularly because competitors can seek permission to bring certain cases themselves.
This is general information about Canadian and Ontario law, not legal advice on a specific campaign. Regulated industries, such as food, drugs, cannabis, financial services and professions, have additional rules that are beyond this overview.
The Two Main Sources of Law
The federal Competition Act is the main law on misleading advertising in Canada, and it is enforced by the Competition Bureau. It contains two tracks. Section 52 is a criminal provision for knowingly or recklessly making a representation to the public that is false or misleading in a material respect. Section 74.01 is a civil provision covering similar misrepresentations, without any need to prove intent.
Ontario’s Consumer Protection Act, 2002 prohibits false, misleading or deceptive representations to consumers, as well as unconscionable representations. It also gives consumers remedies, which can include rescinding the agreement within a time limit, or seeking damages. A separate Consumer Protection Act, 2023 has been passed and is intended to replace this statute once in force, so check which one applies to the date you are advertising.
The Trademarks Act also matters where your statements target a competitor, since it prohibits false or misleading statements tending to discredit a competitor’s business, goods or services.
What Counts as Misleading
Two points catch people off guard.
First, the test looks at the overall message, not only the technically correct wording. Under the Act, both the general impression conveyed and the literal meaning are taken into account. A claim can be literally true and still misleading if the ordinary customer would take away something different. An asterisk leading to contradictory fine print may not rescue it.
Second, nobody needs to have actually been fooled. It is enough that the representation is false or misleading in a material respect, meaning it could influence someone’s decision. There is no need to prove that a customer was deceived or lost money.
Then there is the distinction between opinion and fact. “The tastiest samosas you’ll ever eat” is the kind of subjective puffery that no reasonable reader takes as a provable claim. “Rated number one in Brampton” is different, because it suggests someone measured something. If you can’t name the survey, the date and the method, rewrite it.
Sale Prices and “Regular Price” Claims
Price comparisons get particular attention. Section 74.01 says a business that makes a representation about the ordinary selling price of a product can be in trouble unless it satisfies one of two tests. Roughly, either a substantial volume of the product has been sold at that price or higher within a reasonable period, or the product has been offered at that price or higher in good faith for a substantial period.
The Bureau’s guidance has long suggested benchmarks for these tests: a majority of sales over 12 months for the volume test, or the price being offered for more than half of the previous six months for the time test. They are guidelines, not hard rules, and the circumstances matter. But they do point to the real problem. A store that marks a sofa at $2,000 for a week, then runs a “60 per cent off” sale for most of the year has no real regular price of $2,000.
Before you run a “was/now” promotion, ask yourself:
- Could I produce sales records showing that the “regular” price was real?
- If I compare to a competitor’s price, is it current and for the same item?
- Is my “limited-time” sale actually limited, or do I run it again and again?
- Is the discount available on everything in the ad, or only selected items?
Hidden Fees and Drip Pricing
“Drip pricing” means advertising an attractive price that cannot actually be paid because mandatory fees get added later. The Competition Act expressly says that representing a price that is not attainable because of fixed obligatory charges or fees is a false or misleading representation, unless those added amounts are only those imposed by law, such as sales tax.
Consider a hypothetical moving company in Brampton advertising “$79 per hour” with a compulsory $45 “truck fee” and $20 “fuel surcharge” on every booking. Or a car detailer whose online price rises at checkout because of an unavoidable “service fee.” The fix is simple in principle: show the full mandatory price up front. A fee that is truly optional, and that customers can decline, is a different matter, but it must really be optional.
Bait and Switch
The Act also addresses advertising a product at a bargain price when you do not have a reasonable supply of it. Unless you can show you had reasonable stock, or that the shortage was beyond your control and you took other steps such as offering a rain cheque, the conduct can be reviewable. Word your flyers accordingly. “While quantities last” is not a complete answer if you only ever had two units. Also, once you’ve advertised a price, you generally shouldn’t charge more than that price during the period the ad covers, apart from a genuine error that is corrected promptly.
Performance, Guarantees and Testimonials
Performance claims have their own rule. Any statement, warranty or guarantee about the performance, efficacy or length of life of a product must be based on an adequate and proper test, and the burden is on the person making the claim. The test must be done before the claim is made, and testing done afterward won’t cure it.
So “stops mould for 10 years,” “reduces back pain,” or “our coating lasts twice as long” should not appear in your marketing just because your supplier said so. Ask for the test. Read it to see if it matches what you are saying, in the conditions customers would actually use it.
Reviews and testimonials raise a related concern. The Act limits the use of testimonials and publication of test results without permission, and the Bureau treats fake reviews as a type of misleading representation. Avoid these:
- Reviews written by staff, relatives or friends posing as customers
- Paying for positive reviews without disclosing it
- Removing negative reviews in a way that distorts what customers see, if you control the platform
- Influencer posts that don’t disclose a free product, payment or discount
Asking genuine customers for honest feedback is fine. If you give them an incentive, it should not depend on a positive review, and any such connection should be clearly disclosed. Note also that the Act covers representations you permit to be made, so a marketing agency’s conduct on your behalf may become your problem.
Environmental and “Made in Canada” Claims
Environmental claims are subject to specific statutory rules. In force since June 20, 2024, the Competition Act’s deceptive marketing provisions require that a claim about a product’s environmental benefit be based on an adequate and proper test. A claim about the environmental benefit of a business or business activity must be based on adequate and proper substantiation in accordance with internationally recognized methodology. Words like “green,” “sustainable,” “carbon-neutral” and “net zero” therefore call for support, and the Bureau has published guidelines on what it looks for.
A Brampton cleaning company describing its products as “non-toxic and eco-friendly” should be able to answer: compared to what, measured how, and for which product? Saying less and being specific, such as “contains 30 per cent recycled plastic by weight” where that is true, is generally safer than a broad claim.
Origin claims work in a similar way. Bureau guidance on non-food products sets out the conditions for “Product of Canada” and “Made in Canada,” with cost thresholds of 98 per cent and 51 per cent of direct costs, along with a last substantial transformation in Canada, and a qualifying statement for the latter. Food labels have their own guidance from the Canadian Food Inspection Agency. A patriotic label on a product finished abroad is not a harmless flourish.
Contests, Telemarketing and Email
Other marketing activities have their own rules. Contest promotions must disclose the number and value of prizes, regional allocation and chances of winning, among other requirements, and they also need attention under the Criminal Code’s gaming provisions. Skill-testing questions are not just tradition.
Commercial emails and texts are governed by Canada’s anti-spam legislation, which generally requires consent and an unsubscribe mechanism. Telemarketing has its own unsolicited call rules. If you collect personal information for marketing, privacy law applies too. Our privacy page gives an overview.
Consequences Are Not Just for Big Companies
For civil deceptive marketing, a court or the Competition Tribunal may order a business to stop the conduct, publish a corrective notice and pay an administrative monetary penalty. For a corporation, the penalty can be up to the greater of $10 million ($15 million for each later order) and three times the benefit derived from the conduct, or, if that amount can’t be reasonably determined, 3 per cent of its annual worldwide gross revenues. For an individual, the limit is the greater of $750,000 ($1 million for later orders) and three times the benefit. Those are maximums and not typical amounts for small businesses, but they show how seriously Parliament treats the issue. Courts can also order restitution for customers in some cases.
Criminal prosecution under section 52 is reserved for the more serious conduct, and can involve fines and imprisonment. A person who suffers loss from a breach of section 52 may also have a right to sue for damages.
Since June 20, 2025, private parties have been able to ask the Competition Tribunal for leave to bring deceptive marketing applications, where it is in the public interest to do so. This means a competitor or public interest group might start a case, not just the Bureau. Directors and officers should also be aware they may be exposed if they knowingly direct or authorize a contravention, and a due diligence defence is available only if you can show real preventive steps.
Ontario customers have remedies of their own. A consumer who was induced into an agreement by a false or misleading representation may be able to rescind it, generally within one year of entering into it, by giving written notice, and may seek damages. Complaints may also reach Consumer Protection Ontario.
A Pre-Publication Check You Can Use
Before an ad, a landing page or a social post goes out, have someone other than the author ask:
- What is the first impression, and is it accurate?
- Do I have proof of each factual claim, on file, dated before the ad ran?
- Is the price the customer will actually pay shown clearly?
- Is the discount based on a real regular price?
- Do I have enough stock for the expected demand?
- Is the fine print consistent with the headline?
- Have reviews and endorsements been disclosed honestly?
- Are competitor comparisons fair, current and comparable?
Keep a short file for each campaign: the ad, the claim’s support, the date range and who approved it. That file can support a due diligence argument and gives you an answer if a customer, competitor or the Bureau asks a question.
If you’ve already published something you are not sure about, fix it rather than wait. Correct or withdraw the claim, keep a record of what you changed and consider whether any customer has been affected. Should a complaint or Bureau letter arrive, contact a lawyer before responding. We can review marketing materials and related contracts through our corporate law practice, and disputes with competitors over advertising sometimes lead to business litigation. A few questions before launch cost far less than correcting a campaign afterward.