Ontario to regulate reward points/loyalty programs

Bill 47, Protecting Rewards Points Act (Consumer Protection Amendment), 2016, (the “Bill“) has passed third reading in the Ontario Legislative Assembly. The Bill impacts providers of reward/loyalty programs. The Bill prohibits, in prescribed circumstances, the expiry of reward points.


  • Definition of consumer agreement. The definition of consumer agreement is amended to include agreements that provide reward points to a consumer, when the consumer purchases goods or services or acts in a manner specified in the agreement to collect such points. The Consumer Protection Act (the “Act“) categorizes agreements by type e.g. future performance agreement, direct agreement, or internet agreement and prescribes the disclosure required for each type of agreement. Presently, the disclosure requirements for agreements do not consider the nature of reward points and may, in some instances, be inapplicable.
  • Definition of reward points. Reward points are defined as points that are provided under a consumer agreement that can be exchanged for money, goods or services. The Bill expands regulation-making powers, including providing for regulations clarifying the definition of reward points and specifying the things that do and do not constitute reward points. Clarification is welcome, given that reward point programs have various forms and features. Certain reward programs/reward program providers may also be exempted from application of this reward points regime, though that remains to be seen in the regulations.
  • Expiry of reward points. The wording of the Bill is somewhat convoluted. A consumer agreement is prohibited from providing for the expiry of reward points due to the passage of time alone. However, upon providing notice, a supplier (or the consumer) can terminate the consumer agreement providing for reward points and, if the agreement provides, the consumer’s reward points may expire. In prescribed circumstances, reward points may expire for other reasons. Further detail will be set out in the regulations.
  • Application. The amendments under the Bill apply to consumer agreements for reward points in existence as of October 1, 2016 and entered into after October 1, 2016.

It is anticipated that the Ontario Government will work with stakeholders to formulate the regulations. It is also anticipated that the other provinces and territories in Canada may eventually follow Ontario’s implementation of regulations prohibiting the expiry of reward points, similar to the developments with respect to gift card legislation in the provinces, which, in some instances, originated from private members bills.



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