Skip to content
Download Consolidated Credit's Free Debt Relief Guide

The Consumer Protection Act

Canada has laws governing the way companies can go about the sale of goods and services. Laws are in place to ensure both businesses and consumers remain safe and protected. Under The Consumer Protection Act, this is all possible. To learn more about the rules and regulations, continue reading below.

What is the Consumer Protection Act?

The Consumer Protection Act came into effect in 2002. The Canadian federal government introduced and incorporated the Act. The Act applies to all consumer transactions in Ontario. Rather, all transactions between a buyer and a business. As long as either the consumer or the business is in Ontario when the transaction takes place, the Act applies. In other words, the buyer or the seller must be in Ontario for the Act to be enforceable.

The Act covers rules around pricing and labelling, advertising, permit requirements, contract limitations, and business practices. It also covers a few more specialized rules for specific business transactions. Such as the sale of used cars or motorcycles, door-to-door sales, and distance contracts.

Curious how credit counselling can get you ahead?

How does the Consumer Protection Act Affect Me?

The Consumer Protection Act protects your rights as a consumer. Primarily against unfair business practices. Below are ways that the Act protects consumers.

Cooling-off Period

The cooling-off period protects consumers if they change their minds about a purchase. It also protects consumers from contracts they signed, but later want to cancel. To utilize the cooling-off period, you do not need a reason and there is no penalty. The cooling-off period is only for a set period, usually 15 days. Legally, companies must share the length of their cooling-off period with a consumer.

This cooling-off period applies to the following contracts or purchases:

  • Direct Agreement: Product or service purchased from a door-to-door salesperson
  • Personal Development Contract: Advance payment to join a gym or fitness club
  • Condominium Act: Purchase of a newly built condo
  • Payday Loans Act: Obtaining a payday loan
  • Timeshares: Purchasing a timeshare

If you made a purchase or signed a contract that you no longer want, you can cancel within the cooling-off period. Simply send a cancellation letter or other written notice to the business. You do not need to cite a reason for cancellation in your letter. The company usually needs to pay back the money within 15 days (2 days for payday loans).

False Representation

A business faces legal recourse if they give consumers false information. This could be about themselves, or their products or services. If you find that a business you have a contract with gave you false information, you can exit the contract. You must exit the contract within one year. There are no penalties.

False representation includes any of the following:

  • Claims that goods and services have sponsorship, uses, ingredients, or other qualities that they do not have
  • Goods and services are of a certain quality, grade, model or standard that they aren’t actually
  • Business owner or company has sponsorship, approval, status, or affiliation that they do not have
  • Goods are new or unused when they are not

Products are available for a reason that does not exist

  • Services or goods are available when they aren’t
  • A price advantage exists, when it does not
  • Goods or services have exaggerated benefits


The Act has rules for business and sales contracts. Businesses are legally required to provide a business contract for transactions over $50. The conditions state that you must :

  • Purchase the product/services from a door-to-door salesperson
  • Obtain membership of some sort of group (i.e. a gym)
  • Acquire a subscription (i.e. a magazine)
  • Hire a business or individual, such as a snow removal service

With a contract under the Act, specific items and clauses apply. Ensure that you see the following within that contract:

  • Terms of Agreement. Cooling-off periods, how the company deals with cancellation, all fees and charges listed.
  • Credit terms. Includes financing charges, interest rates, and formulas for interest calculations for missed or late payments.

Also, watch out for void clauses. Any contract clause that says a consumer must use a private arbitration process, rather than an Ontario court, to solve an issue is unenforceable. This is true even if you sign a contract.

Changes to a Contract

Businesses must provide consumers with written notice of any contract changes, including renewal or extension. This notice must include:

  • All proposed changes
  • Date that said change would take place
  • Format for consumer’s response to notice
  • Information about repercussions for not responding to the notice

Cancelling a Contract

Consumers have the right to cancel a contract without penalty if one of the following circumstances apply:

  • There is a cooling-off period
  • The business engaged in unfair business practice (i.e. misrepresentation)
  • Deliveries aren’t made on time (within 30 days of promised delivery date)

Delivery of Goods

If a business promises delivery of a product, they must deliver the product within 30 days after the promised delivery date. If they don’t, you have the right to a refund.

Additionally, you are not expected to pay for an item you didn’t order. This is also true for credit cards.

What to do if the Consumer Protection Act Has Been Violated

If a business violates any of the Act’s rules, it could face a fine between $50,000 and $250,000. Sometimes the business could face jail time. If you identify a Consumer Protection Act violation, file a complaint using these steps:

  1. Inform the business of your intention to file a complaint.

The Ministry of Government and Consumer Services (MGCS) recommend that your letter contain:

  • Business’ name
  • Information on how your rights violation
  • Indication of whether or not you’ve filed a formal complaint with MGCS
  1. Submit a complaint to MGCS online, or by phone or email.

Expect to provide the following information:

  • Copy of your letter to the business and any responses
  • Contracts and agreements
  • Records of payments, invoices, emails
  • Call logs if necessary
  1. Contact Consumer Protection Ontario if you have any questions.
  2. 1-800-889-9768(toll free)
  3. 416-326-8800(Toronto area)

Final Thoughts

Businesses need to follow the Consumer Protection Act when conducting business in Ontario. The Act is in place to protect consumers from unfair business practices. If you think there was a violation of your rights, make sure you contact MGCS. This is especially true if the violation is leading to financial struggle.

Was this article helpful?

What is your total credit card debt amount?

Provide a few details about yourself.

##first_name##, here are your next steps...

Get a clear picture of your spending vs. your income. Begin your online budget and financial analysis now by clicking the button above.

Our experts are here to help you understand your options and reach your goals. After you complete the easy-to-use online budget, one of our trained counsellors will reach out to you and provide recommendations.

Everything shared is 100% confidential and secure.

I understand and agree that by choosing “Start your online budget now”, I am voluntarily providing certain personal financial information in order to educate myself as to my current financial position. I understand that this budget tool is educational in nature, and that none of the information received in the form of a budget constitutes financial advice, nor does it constitute a counselling session. I understand and agree that the budget depends on the information I input into the fields, and that Company does not represent or guarantee the accuracy of the budget. I understand that this tool may collect information and should I choose not to provide such information, I am not to proceed further. If I choose to abandon the tool midway through the process, I understand that the information will not be maintained and I would be required to start providing the information from the beginning. Company disclaims all warranties associated with the budget tool herein. I understand and agree that Company may use the contact information provided herein to contact me through various means of communications, including automated messages, and that I expressly consent to receive these messages.

Consolidated Credit Counseling Services of Canada Inc BBB accredited business profile