The Ontario Consumer Protection Act Explained

Ontario's Consumer Protection Act sets out the rules that apply when a business sells goods or services to a consumer in the province. It gives Ontario residents specific rights, including the right to cancel certain contracts, protection from false or misleading sales tactics, and rules about what a written contract must disclose. This guide explains what the Act covers, how cancellation and cooling-off rules work for different contract types, and what is changing under a newer law that has already passed but is not yet in effect.

What the Consumer Protection Act Covers

Ontario's general consumer law is the Consumer Protection Act, 2002. It is administered by the Ministry of Public and Business Service Delivery and Procurement, through the branch known as Consumer Protection Ontario. The Act applies to consumer transactions where a person buys, leases, or receives goods or services mainly for personal, family, or household use, and either the consumer or the supplier is located in Ontario when the deal is made.

The Act covers a wide range of everyday purchases and contracts. These include retail purchases, home renovation and repair contracts, gym and fitness memberships, timeshares, online purchases, some loan products, and door-to-door sales. It is not limited to deals signed in person; online and phone sales are covered too. For an overview of consumer protections across the country, see Canada consumer protection.

Transactions the Act Does Not Cover

The Act is broad, but section 2 sets out specific exemptions. It generally does not apply to the purchase, sale, or lease of real property, since real estate transactions are governed by separate legislation. It also does not apply to insurance, credit union, mortgage broker, and loan and trust products that are already regulated under their own Ontario statutes, or to transactions regulated under securities and commodity futures law.

Professional services regulated under their own Ontario statute, and charges for the supply of a public utility, are also excluded. Because of these carve-outs, a dispute may be governed by a different set of rules depending on what was purchased. A vehicle purchase, for example, can raise separate issues; see car defect remedies for how those are typically handled.

Unfair Practices: False, Misleading, and Unconscionable Representations

A central part of the Act prohibits unfair practices. This includes false, misleading, or deceptive representations, such as overstating what a product does, claiming a licence or certification the business does not actually hold, or telling a consumer that a repair or part is needed when it is not.

The Act also prohibits unconscionable representations, meaning a supplier cannot take advantage of a consumer who is not reasonably able to protect their own interests, or charge a price grossly higher than the price of similar goods or services available elsewhere.

When a supplier engages in an unfair practice, the consumer generally has the right to rescind, or cancel, the resulting agreement. This right is usually available for up to one year after entering into the agreement, and a consumer who rescinds is entitled to a refund of money paid.

Cancelling a Contract in Ontario: Rules Vary by Contract Type

There is no single blanket cooling-off period that applies to every purchase in Ontario. Instead, the Act sets separate cancellation rules depending on how and where the agreement was made.

Direct Agreements (Door-to-Door Sales)

A direct agreement is negotiated and signed somewhere other than the supplier's regular place of business, most often at the consumer's home. Common examples include furnaces, air conditioners, water heaters, water treatment systems, duct cleaning, and some home renovation contracts sold door to door.

Under the Act, a consumer may cancel a direct agreement without giving any reason within 10 days after receiving the written copy of the agreement. This right applies once the price is above the 50 dollar threshold set out in Ontario Regulation 17/05. If the supplier never provided the required written agreement, or left out information the Act requires, the cancellation window extends to one year from the date the agreement was entered into.

Internet and Remote Agreements

For purchases made online or by phone or mail, where the consumer and supplier are not face to face, a consumer can cancel within 7 days if the supplier did not provide the required information before the contract was made, or did not give the consumer a clear chance to accept, decline, or correct errors in the order. As with direct agreements, the cancellation window extends to one year if the required written copy of the agreement was never delivered.

Future Performance Agreements

A future performance agreement is one where delivery of the goods or the start of the service happens after the contract is signed, such as a custom order or a membership that begins on a later date. A consumer can cancel this type of agreement within 30 days if the supplier does not deliver or begin performance by the date promised, and within one year if a required written agreement was never provided.

Whichever category applies, once a valid cancellation notice is given the supplier must refund all money paid within 15 days, and the consumer is generally expected to return any goods already received.

Written Contracts and Disclosure Requirements

For most of the contract types above, the Act requires the agreement to be in writing and to include specific information: the supplier's name and contact information, a clear description of the goods or services, an itemized and total price, delivery and payment terms, and a plain statement of the consumer's cancellation rights.

Leaving out required terms does not automatically cancel the deal on its own, but it does extend how long the consumer has to walk away, as described above. The Act also works alongside the Sale of Goods Act, which supplies background protections such as an implied condition that goods be of reasonable quality and fit for their intended purpose. The Consumer Protection Act prevents a supplier from using contract wording to strip away those underlying protections.

The Consumer Protection Act, 2023: What Is Changing, and When

A newer law, the Consumer Protection Act, 2023, has already been passed but has not yet taken effect. It was introduced as Bill 142, the Better for Consumers, Better for Businesses Act, 2023, and received royal assent on December 6, 2023. Once it is proclaimed into force, it will repeal the Consumer Protection Act, 2002, and take its place as Ontario's general consumer protection law.

Among the changes it is expected to bring are higher maximum penalties, up to 500,000 dollars for a corporation and 100,000 dollars for an individual, a list of contract terms that will be automatically prohibited, such as mandatory arbitration clauses and clauses that stop a consumer from posting an honest review, a broader definition of unfair practices, and a longer window to rescind an agreement affected by an unfair practice.

Because no start date has been set, everything described elsewhere in this article reflects the Consumer Protection Act, 2002, which is the law currently in force. Businesses and consumers should watch for a proclamation announcement and finalized regulations before assuming any of the 2023 Act's changes already apply.

Getting Help or Filing a Complaint

If a problem comes up, it is usually best to raise it with the business first, ideally in writing, and to give the business a reasonable chance to respond. Keeping copies of the contract, receipts, and any correspondence helps if the issue needs to go further.

If the business does not resolve the issue, a consumer can file a complaint with Consumer Protection Ontario, the consumer protection branch of the Ministry of Public and Business Service Delivery and Procurement. The ministry can investigate patterns of non-compliance, add repeat offenders to its public Consumer Beware List, and in serious cases refer a matter for prosecution, but it does not act as a private arbitrator that will force an individual refund. For a dispute that is purely about money, Small Claims Court is often the practical next step.

Contract problems sometimes overlap with other consumer issues. If a dispute involves being contacted about an unpaid account, see debt collection rules. For a broader look at consumer protection rules across the country, see Canadian law by province.

Disclaimer

This article provides general information about Ontario's Consumer Protection Act, 2002, and the pending Consumer Protection Act, 2023, for educational purposes only. It is not legal advice and should not be relied on as a substitute for advice from a licensed Ontario lawyer or paralegal about a specific situation. Consumer protection law changes over time, and readers should confirm current requirements with the Ontario government or a qualified legal professional before acting.