Bill C-10 could lead to drop in ad spend, says ACA

Chair of the Senate committee on national finance has spoken out against the bill, which if passed would lead to $10-million penalties for infractions, and would give a government tribunal power to freeze assets.

Proposed amendments to the Competition Act through Bill C-10, which is slated for its third reading in Parliament this week, would ‘send a chill’ through the advertising industry and lead to a decrease in ad spending, says a representative of the Association of Canadian Advertisers (ACA).

‘If any creative director now thinks that any kind of unique approach might be misconstrued as misleading, he will not use it. I think it will lead to a drop in advertising spend frankly, and that’s the last thing we need in this economy,’ says Bob Reaume, ACA VP, policy and research.

The amendment would increase penalties imposed by the Competition Tribunal for false or misleading advertising and deceptive marketing practices from $100,000 to $10 million ($15 million for subsequent violations), and increase maximum imprisonment terms from five to 14 years for criminal offences. The tribunal would also be empowered to freeze assets and prevent the disposal of property before a finding against the advertiser, in cases where there is concern that money may not be available for redress to harmed consumers, the bill states. The changes are a part of Bill C-10, a series of provisions to Canada’s budget put forth by James Flaherty, Minister of Finance.

‘If there’s really bad stuff going on, the tribunal should be acting under the criminal sections of this act, not the civil penalties,’ says Reaume, adding that civil penalties are supposed to be issued for marketing infractions that are smaller and less serious – ‘sometimes accidental.’

The ACA’s call for the removal of the amendments echoes that of Senator Joseph Day, chair of the Senate Committee on National Finance, who has also asked that the Competition Act amendments and other non-budgetary items in be dealt with separately.

The ACA represents over 200 marketing companies and divisions that collectively account for estimated sales of $350 billion annually.