Putting on a contest, giveaway, or sweepstakes in Canada requires that you comply with all the promotional contest rules that govern this kind of activity. Failure to comply with these rules can lead to significant penalties that include large fines levied against you or your company by the Canadian government.
You should consider several pieces of legislation and sources of law. Continue reading to learn what those sources are and where you can find them.
Don't forget these rules of thumb:
- Remember to create a set of mini-rules that attach to every mention of the contest in your promotional materials.
- Potential entrants should be able to access the complete rules of the contest by taking no more than one action (one click or one phone call, for example).
- If your contest includes features (like participation by minors, or the promotion of alcohol) that may implicate other regulations, ensure that you investigate those rules as well.
- Each province and territory, particularly Quebec, has its own contest rules and regulations. Investigate those region-specific laws and rules carefully.
Contest Rules Checklist
Every contest needs rules, and we'll begin with a checklist of the ones you'll need to include in your long-form rules.
- Contest eligibility. In this section, include any restrictions on entry, like age or place of residence.
- Methods of entry. Be sure to include a free, alternate method of entry in addition to the usual method of entry (which is usually the purchase of a participating product).
- Conditions to satisfy before participants can win, for example: (A) correctly answering a skill-testing question or (B) agreeing to a release.
- Privacy notice. Include a description of how you’ll be storing and using any personal information provided by a participant.
- Precise contest times (to the second), dates, and duration. Be as specific as possible with this. The more ambiguity there is in the contest times, the more likely it is that a dispute could arise about whether a participant has won.
- Circumstances, time, and place of winner selection. The Competition Act requires transparency with respect to winner selection.
- How alternate winners will be selected. Sometimes, the winner will be unwilling or unable to collect their prize. In those cases, you need an alternate winner, as well as a procedure to select them.
- A detailed, complete, and full description of prizes and their value. Be as detailed as possible, especially if your prize includes a trip or vacation.
- General prize conditions. Conditions that attach to the acceptance of a prize.
- Products involved in the contest. You’ll need to expressly indicate which products are included in the methods of entry.
- Specific rules for minors (if their participation is permitted). Consider carefully whether you want minors to be permitted to enter your contest. If so, draft a detailed set of rules, particularly eligibility rules, specifically for them.
- Specific rules for Quebec (if the contest is offered there). Ensure you comply with the special rules that govern contest promotion in Quebec.
- A clause allowing the contest promoter to void or modify the contest. Such a clause is important if you or your company encounter difficulties during the contest, and you need to put a stop to it immediately.
- Rules about intellectual property (if necessary). Particularly in contests that include user generated content, you’ll need to specify who owns the intellectual property contained within the entries.
- Liability limitations and releases. This is especially important if your prize is a trip or vacation. Carefully draft a liability limitation to release you from liability in the event the winner is harmed or injured during travel.
You’ll also need “Mini-Rules” to attach to every mention of your promotional material and advertising. The specific details that must be disclosed in the mini-rules will depend on the sort of contest you’re putting on. However, there’s a good chance the following details will be relevant:
- Purchase requirements
- Technical requirements (like internet access, or a Facebook account)
- Contest dates
- Eligibility requirements
- A requirement for winners to sign a liability release
- A requirement for winners to answer a skill-testing question
- The number and value of prizes, as well as the regional allocation of prizes
- Odds, and any facts that may affect them
- Instructions on how to access the full rules. (As a guideline, entrants should only be required to take a single action, like one mouse click or one phone call, to access the full rules.)
Promotional contest rules in Canada are primarily governed by three pieces of legislation:
- The Competition Act, R.S.C., 1985, c. C-34
- The Criminal Code, R.S.C., 1985, c. C-46
- Quebec’s Act Respecting Lotteries, Publicity Contests And Amusement Machines, 1990, c. 46, s. 18.
A fourth enactment, Canada’s Anti-Spam Legislation (“CASL”), is likely relevant as well if you’re doing any sort of online marketing.
Section 74.06 of the Competition Act sets out three promotional contest rules:
- “Adequate and fair disclosure” of the contest must be made to entrants
- Distribution of the prizes must be prompt
- The distribution of prizes must be based on skill or chance.
The second and third criteria are generally not problematic, but contest promoters should pay special attention to the first rule.
- Adequate and Fair Disclosure. The disclosure rules of the Competition Act require that contest promoters conspicuously disclose details of the contest prior to the entrant being inconvenienced. In practice, this means that a contest promoter should post a set of “mini-rules” alongside any mention or announcement of the contest.
Section 206 of the Criminal Code makes it an indictable offense to engage in lotteries or games of chance except in very particular circumstances or ways. We won’t set out the full text of the provision here (you can click the link above if you’re interested in seeing the prohibition in full detail), but suffice to say that the Criminal Code renders it necessary to do at least two things when putting on a promotional contest.
1. Introduce an element of skill
You may have wondered why promotional contest rules in Canada frequently require the player to answer a skill-testing question. This question, which is frequently a simple, multi-step mathematical equation, must be answered before a person can win the contest.
Simply put, the Criminal Code prevents most people from putting on purely chance-based contests in exchange for money. Therefore, contest promoters add an element of skill to distinguish the game from a game of pure chance. This avoids the prohibition in the Criminal Code.
2. Eliminate Consideration
The concept of consideration in contract law is one that refers to a quid pro quo. In other words, getting something in exchange for something else. Because a contest promotion is a form of contract under Canadian law, the law of consideration applies.
Contest promoters frequently add a free method of entry (known as an alternate method of entry, or AMOE) to eliminate the element of consideration from their contest. Like introducing a skill element, eliminating consideration allows contest promoters to avoid the Criminal Code and its attendant penalties.
Quebec’s Act Respecting Lotteries, Publicity Contests And Amusement Machines
Section 20 of Chapter 6 of Quebec’s Act Respecting Lotteries, Publicity Contests And Amusement Machines sets out several additional contest rules that promoters must satisfy if they wish to put on a contest in Quebec.
Enforced by the Regie des alcools, des courses et des jeux (Liquor, Racing, and Games Control), these rules apply to contests that do not involve only franchisees (where the contest is put on by the franchisor) or employees of the promoter, a contest and have a prize pool with a value greater than $100. The rules include:
- Contest rules are provided in French
- A duty, calculated as a percentage of the prize pool, be paid
- A security agreement be posted with the Regie (where prizes are greater than a specific amount)
- All contest advertising be filed in Quebec (where the prize pool is greater than $2000)
Special Contest Rules
There are several discrete areas in which special giveaway contest rules are required. Here are just a few examples.
Contest Rules for Minors
Several considerations become relevant when deciding whether to include minors in your contest promotion. People under the age of majority are governed by a patchwork of different laws and regulations that could affect the nature of your contest. These regulations exist with respect to:
- Consent to participate
- Liability releases
- Advertising and marketing
Depending on where you are in Canada, what you’re promoting, and the medium in which your contest is taking place, you may wish to obtain specific advice with respect to allowing minors to participate in your contest.
Alcohol Contest Rules
Because alcohol advertising is heavily regulated in Canada, and because that regulation exists at both the federal and provincial levels of government, alcohol-related contest rules are complex.
Federal regulations for alcohol advertising include the Code for Broadcast Advertising of Alcoholic Beverages and are pre-cleared by AdStandards Canada.
Provincial and territorial regulations vary between the provinces and territories. Quebec requires that all alcohol advertising be submitted to the Regie and approved. Several provinces and territories require pre-approval for contests and advertising involving alcohol.
All provinces and territories require that all contest entrants must be legally allowed to drink alcohol in the province where the contest takes place. The prize for the contest may not be alcohol.
Canada’s Anti-Spam Legislation
Canada’s Anti-Spam Legislation, S.C. 2010, c. 23, (the long-form name of which is too long to include here) prohibits several behaviors that could be relevant to contest promoters. While the full impact of CASL on your contest will depend on the manner and form of your marketing, the key takeaway is that CASL prohibits the sending of electronic messages without the permission and consent of the recipient.
This has implications for contests that allow participants to refer other entrants, for example.
The penalties you face for failing to adhere to giveaway and contest rules include imprisonment and fines. So you know, imprisonment is available only for Criminal Code offenses and, even then, would likely only be imposed for serious, repeat infractions. Fines are the more likely sanction.
For individuals who contravene the Competition Act, the Commission may impose administrative monetary penalties of no more than:
- $750,000 for a first offense, and
- $1,000,000 for a second or subsequent offense.
For companies who contravene the Competition Act, the Commission may impose administrative monetary penalties of no more than:
- $10,000,000 for a first offense, and
- $15,000,000 for a second offense.
Other enactments, like Canada’s Anti-Spam Legislation and the Privacy Act, as well as industry- or product-specific rules and regulations (like those applying to alcohol), contain their own penalty provisions.
Gordon Greenwood. Conducting Contests in Canada, 2018 CanLIIDocs 10902
The Competition Act, R.S.C., 1985, c. C-34
The Criminal Code, R.S.C., 1985, c. C-46
Quebec’s Act Respecting Lotteries, Publicity Contests And Amusement Machines, 1990, c. 46, s. 18.
The Competition Bureau. Promotional Contest Enforcement Guidelines
Finally, a note on how you can use this article. This article is not to be considered legal advice and is not a substitute for advice from qualified legal counsel. Material aspects of the discussions in this article may change at any time and without further notice. The currency referred to in this article is Canadian dollars.