Advertising and Marketing Law for Ontario Businesses: What You Can and Cannot Do

Marketing is essential to growing any Ontario business — but the rules governing what you can say, show, and promise to customers are more complex than most business owners realize. Federal competition law, Ontario consumer protection statutes, sector-specific regulations, and platform policies all intersect in the advertising space. Getting it wrong can mean regulatory complaints, fines, or customer lawsuits. This guide covers the most important advertising and marketing law rules for Ontario businesses.

The Federal Framework: The Competition Act

Canada's Competition Act (federal) prohibits misleading advertising and deceptive marketing practices across the country. The Competition Bureau (a federal agency) enforces these provisions. Key prohibitions include:

Materially False or Misleading Representations

Any representation made to the public for the purpose of promoting a product or service is prohibited if it is materially false or misleading. Crucially, the test is the general impression conveyed — not just whether the words are technically accurate. An advertisement can be literally true and still violate the Act if the overall impression misleads consumers.

Performance Claims Must Be Tested

If you make a performance claim about your product (e.g., "cleans 40% better than leading brands"), you must have adequate and proper testing to substantiate it before making the claim. You cannot test after the fact if challenged.

Price Claims

Deceptive pricing includes:

• Advertising a "regular price" that was never actually charged for a meaningful period
• Showing a crossed-out price that was inflated specifically to make the sale price look better
• Failing to disclose mandatory fees or surcharges in advertised prices

The Competition Act requires that when an "ordinary selling price" is referenced, the product must have been sold at that price for a substantial volume or for a reasonable period before the sale (as of writing — verify current standards). This is the "regular price" rule that catches many retailers.

Bait-and-Switch

Advertising a product at a price you do not have reasonable quantities of, with no intention of supplying it at that price, is a violation.

Ontario Consumer Protection Act: Unfair Practices in Advertising

Ontario's Consumer Protection Act, 2002 separately prohibits unfair practices in consumer transactions, which includes advertising. Representations that are false, misleading, deceptive, or unconscionable — including in advertising materials — can allow consumers to rescind contracts and seek damages. This applies even to impressions created through exaggerated claims or omissions that make a claim misleading.

Contests, Sweepstakes, and Promotions

Running a contest or promotion in Canada is not as simple as posting "tag a friend to win." Canadian law requires that any contest involving a purchase requirement be carefully structured to avoid violating anti-lottery provisions. Key rules:

• No purchase may be required to enter (or a free alternate method of entry must be offered and equally accessible)
• Skill-testing questions are required for most Canadian prize contests — winners must correctly answer a mathematical skill-testing question
• Contest rules must be clearly disclosed: number and value of prizes, odds of winning, closing date, how winners are selected, eligibility restrictions
• Contests cannot be directed to children in a way that exploits their inexperience or credulity

Quebec has additional specific contest regulations that apply if your contest is open to Quebec residents — if you are targeting consumers across Canada, verify Quebec requirements separately.

Influencer Marketing and Endorsements

If your business uses influencers — whether mega-influencers or local micro-influencers — to promote your products or services, both Canadian law and platform policies require clear disclosure of the commercial relationship.

The Competition Bureau has issued guidance (as of writing — verify current guidance) indicating that:

• Any "material connection" between a brand and a person making a promotional claim must be clearly and prominently disclosed
• A disclosure buried in a string of hashtags (#ad hidden among twenty others) may not be sufficient
• The disclosure must be conspicuous enough that consumers are aware of the commercial relationship before forming an impression of the endorsement

Agreements with influencers should require compliant disclosure and grant you the right to review content before publication.

Industry-Specific Advertising Restrictions

Several sectors face advertising rules layered on top of the general framework:

Alcohol — AGCO rules restrict alcohol advertising in Ontario; ads cannot target minors, promote irresponsible consumption, or associate alcohol with driving. Ads must include responsible drinking messaging in some formats.

Cannabis — Cannabis advertising is heavily restricted under federal law (the Cannabis Act). Cannabis products cannot be advertised in ways that appeal to youth, use testimonials, or suggest health benefits. Advertising to the general public is limited to price and brand information in most contexts.

Financial products — Advertisements for mortgage services, insurance, and investment products are subject to sector-specific disclosure requirements and restrictions on certain claims.

Health products — Claims that a product treats, mitigates, or cures a disease or condition require Health Canada authorization. Unauthorized health claims on food, supplements, or cosmetics are a common compliance failure.

Real estate — RECO-registered salespeople and brokerages must follow advertising standards set by RECO, including disclosure of registration status and brokerage affiliation.

Social Media and Digital Advertising

Digital advertising carries all the same legal obligations as traditional advertising — plus additional ones:

• Sponsored content on social platforms must be disclosed
• Retargeting and behavioural advertising may require consent under PIPEDA
• Email marketing is subject to CASL (see our separate CASL article)
• Dark patterns (manipulative design that tricks consumers into purchases or sign-ups) attract Competition Bureau and provincial consumer protection scrutiny

Frequently asked questions