Canada’s New Anti-Spam Legislation – How does it affect your business?

Bill C-28, Canada’s anti-spam legislation, was recently passed and will come into effect later this year. While its intended target is deceptive forms of spam, Canadian small and medium sized businesses should be aware of the Act in order to ensure their compliance when contacting leads, networking and developing marketing campaigns. Here are highlights of the important aspects of Bill C-28 that you and your employees need to know:

Definition of Spam

Generally spam is considered to be mass, unsolicited email from unknown or unwarranted senders. However, the new legislation applies to the sending of “commercial electronic messages”, which can encompass email, instant or text messaging and social media messages and other forms that we may not consider to be spam. Many times information that is sent may not be considered to be spam by the sender, but can be viewed as spam by the recipient. It’s important to think of how the message will be received on the other end before sending.  Hopefully, the yet to be released regulations will provide some added details or thresholds to more readily define the scope of this term.

Expressed and Implied Consent

Electronic messages are not considered spam if the recipient consented to receive the message so it is important that you first determine whether or not you have approval from the recipient to send the message. Consent comes in two forms – express and implied.

Expressed consent, as defined in the Act, is what is known as “opt-in” consent, whereby the person or corporation expressly agrees to be contacted before any communication is sent. Usually this would come in the form of a newsletter subscription sign up, adding an email address to a written or electronic list, or checking a box to receive more information. This is a more viable option for business owners because it is less likely that an issue will be raised from those who have clearly indicated interest.

Implied consent has a broader use, which can actually be beneficial to marketers and small business owners, but could also pose to be harder to prove if any issue arises. According to the new Act, implied consent occurs when “[t]he person who sends the message, the person who causes it to be sent or the person who permits it to be sent has an existing business relationship or an existing non-business relationship with the person to whom it is sent;" (Bill C-28 Sec. 9a).

If a customer has purchased wares or services from your business with the past two years, there is considered to be an existing business relationship between you and your customer, which would be implied consent. There is no time limit on the relationship status if the customer has provided expressed consent for future contact. In terms of expressed and implied consent, it’s best to err on the side of caution and try to gain expressed consent for all users when possible.

Identification

Messages must clearly express to the recipient who the message is coming from, remaining consistent with the branding used when the recipient made initial contact with the company. There must not be any misleading information in the subject line that misrepresents the message or the sender.  All messages are required to include the active contact information and postal address of the sender.

Unsubscribe Option

Businesses who have an email newsletter must have an unsubscribe option clearly stated on each message so that users can easily halt future correspondence at any time. Some users may not know to use the unsubscribe link, so including contact information for your business is important to ensure that recipients are able to contact you in another form in order to be removed from the mailing list. If a client does contact you via other means to be removed from the list, unsubscribe the user manually and notify them of the removal immediately.

Tips for Small Businesses

If you have a newsletter sign up area on your website, make sure your database saves important information such as name and date of sign up – not just the email address - so that you are able to prove consent if a problem arises. Always give your customers your contact information in any messages sent as well as the option to “opt-out” or “unsubscribe” at any time. Customers should not be automatically placed in an email database, they must be able to choose whether or not they would like to receive information from you. Don’t bombard your customers with messages, it can easily frustrate your clients if their inbox is getting constantly filled with messages from you.  Setting up an account with email marketing software can ensure that your messages are compliant with the government rules. Senders who don’t comply with the new regulations can face serious fines, so make sure your messages are useful or informative to the user in some way, this will make customers look forward to your correspondence and make your database grow.

There will be more to come on this important topic when the regulations are released.

Normalizing Interest Rates?

With the end of the global recession now becoming more than merely a prediction, the time has come to begin the clean-up from the temporary measures that were a necessary part of the economy during the difficult financial times. In short, besides stimulus funds becoming part of the scenery, record low interest rates were also an everyday occurrence.

Interest rates, at near zero levels, were the Shangri-la of investors. Investors who could tap this virtually free money, profited well and the markets responded in kind. In a chain of events, this unprecedented boost of the markets helped restore confidence in the average household and greatly strengthened the ailing economy by fortifying its foundations. However, even the best of vacations must come to an end. Any student of economics will tell you that interest rates reflect and influence an economic situation. Artificially set rates will cause undue influence and possible damage. The current rates were set for an emergency situation. With the economic emergency now having been downgraded, the time has come to allow the markets to respond appropriately. The question now is the timing and magnitude of the normalization of rates. Having faced a near collapse of the financial sector in the Western world, it is crucial that the central banks of both the US and Canada time their adjustments accordingly. For example, towards the end of the Great Depression in the 30's, the US government pulled out its stimulus funds in a final push in 1937-38. This sudden move, due to improper timing, had a negative effect, pushing the US economy into a tailspin and sent the markets reeling.

Economists are mixed in their predictions as to the end of the rock-bottom interest rates. Most feel confident that neither the Governor of the Bank of Canada nor the U.S. Federal Chairman will allow a repeat of the Great Depression mistakes. However, even the latest of predictions for rate hikes is no later than early 2011. Some predict that rates will begin rising by this summer. In either case, investors should prepare themselves for a return to normalcy. The worst, we hope, is over.

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Three Cheers for Canadian Finances

Let's face it – Canada's reputation is not one of the glitzy stars of the world. It is rather conservative, moderate, and perhaps even a bit dull at times. But, those exact qualities allowed the nation to remain strong and secure during the recent recession. At the same time that the U.S. economy has been floundering with no end yet in sight, Canada weathered the storm that lasted just eight months.

Canada's well managed banking sector was a key factor in saving the day. The country's strict regulatory system, combined with a conservative banking culture and superior credit conditions, paved the way for stability. The recession saw the loss of more than 122 banks in the U.S. Not a single Canadian bank closed and none needed bailouts.

Certainly there has been Canadian unemployment. But, our workforce shrinkage of 2.5% was half of our American neighbours.

Let's look at the GDP. Canada's fell 5.4% but that's far less than other nations like Germany's 14.4% fall or Japan that plummeted by a whopping 15.2%.

Sub-prime mortgages dealt a death blow to U.S. banks, comprising almost 20% of the mortgage market. Canadian banks were a lot more cautious and only 7% of the market was comprised of sub-prime mortgages. Furthermore, banks in Canada rarely sold their mortgages and kept a tight reign, thus reducing the risks of default.

Conservative Canadians are more reserved? Quite possibly so, if one considers personal finances. Canadian household debt measures approximately 102% of income while the U.S. ratio is 114%. When Americans had to start repaying their debts, Canadians were able to take advantage of low borrowing rates and boost consumer spending.

Do Canadians have the last laugh? Not really. The recession has hurt everyone and is far from over around the world. But, whereas the great credit bubble burst in other countries, and many are still reeling from the effects of the recession, Canada has shone brightly as a model of fiscal prudence and responsible financial management.
 
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Canadian Consumers May Rock Economic Recovery

Recent statements by Bank of Canada governor, Mark Carney, reflect a spirit of optimism but also carry an undertone of warning.

Despite the recession, Canadians have amassed greater debt, due, in part, to the low interest rates currently dominating the market. These rates, currently at an historic low of 0.25%, were set by the Bank of Canada as emergency interest rates in order to resuscitate an ailing economy. The rates will rise eventually and Mr. Carney, as well as other leading economists, fear that many Canadians may be caught short. Mortgage rates have been extremely low for months while housing prices have rebounded. This has created a perfect setting for many Canadians to take on large debts. However, as the economy improves, interest rates may rise, at a quicker rate than they dropped. Mr. Carney is cautioning Canadians that purchasing a more affordable home today may be a wise choice.

One of the early warning signs of Canadians over-extending is the rise in personal bankruptcies. The third quarter of this year showed a 41 per cent jump compared to the same period in 2008. Similarly, the delinquency rate of mortgage payments has risen by 50 per cent in the last year.

The governor emphasized the vulnerability of the country's economy due to household defaults. As consumers are the key drivers to the nation's economic recovery, Mr. Carney, therefore, hazards Canadians about avoiding credit risks. Of course, a similar warning has been issued to lending institutions to properly monitor household credit.

Mr. Carney strongly believes the Canadian economy is definitely on the rebound and he expects Canada to outperform the other G7 countries. However, Canadian households will play a vital role in that economic recovery and the governor hopes that Canadians will act with economic responsibility for the collective good of the nation.
 
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Truths About Bankruptcy

For some individuals, there is no alternative. Financial debt can eventually lead to personal bankruptcy. Although the prospect of absolving one's self of debt by this method is a frightening thought, the truth is that there are many misconceptions surrounding the bankruptcy process that serve to make a difficult situation even worse.
 

Many people believe the misconception that filing for bankruptcy requires hiring an expensive lawyer. Truth be told, Canadian law states that lawyers cannot serve as bankruptcy trustees. In fact, small bankruptcies are filed by a trustee and do not appear before a judge. Moreover, if you're worried about protecting your privacy during this difficult time, fear not. Since 1997, personal bankruptcies are no longer advertised in the newspaper so your privacy in this delicate matter is assured.
 

Some have an image of the bankrupt individual sitting penniless in the street, hat in hand. That's a fine cartoon image but not reality. Declaring bankruptcy requires committing to a modest lifestyle for at least nine months. Different provinces have different rules regarding the amount of money you may retain as well as which possessions are protected.
 

A common untruth is that all debts are erased upon declaring bankruptcy. In fact, some debts are not. Child support and alimony are not changed. In many cases, student loans are also not erased.
 

Fearful that you will remain bankrupt for life? Fear not. Once your obligations have been fulfilled, you can be discharged from your bankruptcy. In a majority of cases, this occurs after nine months (but it can be extended if there is reasonable opposition from interested parties). Also, believe it or not, many people can re-establish their credit within one to two years after declaring bankruptcy.
 

No two cases are the same. But, before making a decision about declaring bankruptcy, do not merely visit the local rumour mill. Do the appropriate research carefully.

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Is Deflation Good for Business?

Energy prices have truly influenced the global economy over the last couple of years. As gasoline prices have moved down in 2009, one result, in June 2009, was a negative annual inflation rate in Canada. This was the first time this has occurred since November 1994. Similarly, the country's Consumer Price Index (CPI) is expected to be down, marking a decline for the second consecutive year. Overall, though, core inflation is expected to remain fairly stable and close out the year at or near two per cent, as predicted by the Bank of Canada.

Analysts predict that this period of deflation is merely transitory and will likely be take in stride by markets. The Bank of Canada is expected to maintain its promise to keep interest rates at a floor of 0.25 per cent until next year, assuming that inflation remains stable.

As the deflation is attributed to the movement in gasoline prices, the effects are not considered to be ominous. The Bank of Canada had predicted that there would be a period of falling prices, but also predicted that the effects would taper off towards the end of the third quarter of 2009.

When the rather volatile gasoline prices are removed from the inflation index, the country's economic factors are fairly stable. During the recession, some economists described to the core inflation rate as "sticky." Despite the weakening of the economy, the Canadian dollar was fairly strong and food prices were slow to come down. Thus, the core inflation rate did not vary much. As food costs begin to drift down in the coming months, they are expected to bring down the core inflation rate.

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When Will the Economy Be Stable Again?

This is the question on the lips of many economists and regular citizens alike. According to the Bank of Canada, the economy is in an upswing. However, complete recovery, or a return to economic levels prior to the recession, should not be expected until mid-2011.

Although economic indicators are showing upward trends, restructuring in major industries such as auto and forestry – to name but two of many – will take some time, thus slowing economic activity. Another key factor is the increasing strength of the Canadian dollar. The return of a strong dollar – currently trading at nearly 91 cents U.S. - will hold back exports. Mark Carney, governor of the Bank of Canada, has warned that the dollar's raid rise may "fully offset positive factors" in the economy. However, economists seem certain that Mr. Carney is unlikely to intervene with the dollar's growth, thus maintaining the policy of the Bank of Canada for nearly a decade.

A strong Canadian dollar is not all bad, though, for the economy. While it increases the price of Canadian exports, conversely it decreases the price of imports. As the demand for imports is quite high, the strength of the Canadian dollar is beneficial to consumers.

Another indicator of recovery on the horizon is the decision by the Bank of Canada to reduce the amount of cash that it was injecting into the banking system. This measure was adopted when credit markets seized up in the final quarter of 2008. The banks have reduced their dependence on this cash influx, thus generating the central bank's decision. However, the Bank of Canada will maintain its commitment to provide liquidity as necessary to support the stability of the nation's financial system.

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Bank of Canada: Hiring and Sales to Go Up Within a Year

Businesses in Canada say things are looking up after a difficult year, as per a new Bank of Canada survey. One hundred companies were polled in May and June.

Sales are expected to increase in the next year according to 61% of senior managers polled in the quarterly business survey. This is the first positive forecast for sales from a majority of execs surveyed since the 3rd quarter of 2008. In the past year, sales went down according to 69% of respondents, which was a record amount for this poll.

In addition, more companies plan to do more hiring in the next 12 months (39%) than those who plan to lay off employees (17%).

The Bank of Canada comments that in general their results show that businesses expect the economy to improve, but slowly, still conservative about investing.

This is an extremely positive outlook for Canada and as well for the US. But the companies surveyed still don't see US demand increasing in a big way next year. So they estimate that they will spend less on investing in the upcoming year. The results in this area have been negative for the past 2 years as well.

And despite some claiming to have reduced their production capabilities already at this point; the bank says very few businesses report that they would have a hard time meeting unforeseen swells in demand. A greater number of businesses also believe their product prices will be lower next year.

Senior loan officers, polled separately, reported that in the second quarter of 2009 the conditions for lending continued to contract. However, this time the bank explained that the tighter lending was industry-specific than in previous surveys and found more in such areas as the auto sector, forestry products and transportation.


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Economic Growth is on the Horizon

While it is not predicting the end of the economic recession – the worst since the Second World War, the Canadian government is presenting a bright outlook for the immediate future. The government now thinks that the current year's downturn will be less severe than earlier predictions and growth for 2010 will be stronger. As expected, the Bank of Canada is keeping its key policy rate at 0.25-per-cent – an historic low and has pledged to keep that rate until the spring of 2010.

In a move that has surprised some economists, the central bank has reduced the amount of money available to chartered banks in order to support borrowing and lending. Bank Governor Mark Carney has noted that some banks were not drawing down as much money as the Bank of Canada was making available, Mr. Carney cautiously sees this trend as a strong indicator of improving financial markets.

"Stimulative monetary and fiscal policies, improved financial conditions, firmer commodity prices, and a rebound in business and consumer confidence are spurring domestic demand," according to a recent statement released by the central bank.

Mr. Carney has improved his financial forecast for the Canadian economy. An earlier April forecast of three percent annual contraction has been reduced to 2.3 percent. Similarly, he has increased his 2010 growth projection by half-a-point to 3.5 percent.

While agreeing that the future is looking brighter, leading analysts at several of the nation's leading banks view Mr. Carney's outlook as overly optimistic. Most forecasts in the private sector are limiting growth in 2010 to 2.0 percent.

In any event, Mr. Carney has not changed his opinion that complete economic recovery will not be realized before mid-2011.


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