- The Competition Act contains both criminal offences and civil "reviewable practices" dealing with representations made to the public for the purpose of promoting a product, service, or…
- Most misleading-advertising problems fall into a handful of recurring patterns: 1.
- The Competition Bureau, an independent federal law-enforcement agency, investigates complaints and can also open inquiries on its own initiative.
Every Ontario business that advertises — a storefront, a service provider, an online shop — is bound by a federal law most owners have never read: the Competition Act. It governs how you can describe your products, price your services, and make claims about performance, quality, or savings. Get it wrong, and the consequences reach well beyond an annoyed customer.
Misleading advertising under the Competition Act is a broader concept than most business owners expect. It is not limited to outright lies. It also covers the overall impression an ad creates, even when every individual word in it is technically true. Understanding how that standard works is the first step to protecting your business.
What the Competition Act Actually Prohibits
The Competition Act contains both criminal offences and civil "reviewable practices" dealing with representations made to the public for the purpose of promoting a product, service, or business interest. In practice, this covers advertising, packaging, point-of-sale material, and online marketing alike.
The core question the law asks is not "was this sentence literally false?" It is: what impression does this representation create in the mind of an ordinary consumer, taken as a whole?
- Bold headlines and fine-print disclaimers are read together — a disclaimer that contradicts the headline may not cure a misleading overall impression.
- Visual elements (images, layout, tone) count, not just text.
- A statement can be technically accurate and still be misleading if it omits something a reasonable consumer would need to know.
Common Ways Ontario Businesses Run Into Trouble
Most misleading-advertising problems fall into a handful of recurring patterns:
- Unsubstantiated performance claims. Saying a product is "the best," "clinically proven," or "guaranteed" to perform a certain way without evidence to back it up.
- Inflated "regular price" comparisons. Advertising a sale off a "regular price" the product was never actually, meaningfully sold at.
- Drip pricing. Advertising a price that omits mandatory fees the buyer cannot avoid — this is significant enough that it gets its own dedicated treatment under the Act.
- Fake or manipulated reviews and testimonials. Presenting endorsements that are not genuine, or paid promotions dressed up as independent opinion.
- Misleading availability or scarcity claims. "Only 2 left" or "sale ends tonight" messaging that does not reflect reality.
How the Act Is Enforced
The Competition Bureau, an independent federal law-enforcement agency, investigates complaints and can also open inquiries on its own initiative. Depending on the conduct, a matter can proceed as:
| Track | What it involves |
|---|---|
| Criminal | Reserved for the most serious, knowing or reckless false representations |
| Civil (reviewable practices) | The more common route — can result in orders to stop the conduct, publish a corrective notice, and pay administrative monetary penalties |
| Private civil action | In limited circumstances, a person who suffered a loss because of certain conduct may be able to sue for damages |
You do not need to have intended to mislead anyone for the civil track to apply. A poorly worded ad, a stale "was" price, or a testimonial your marketing team never verified can all trigger exposure — intent affects the seriousness of the response, not whether the rules apply at all.
Practical Steps to Keep Your Marketing Compliant
- [ ] Can every factual claim in your ad be backed by evidence you actually have on file?
- [ ] Does your "regular price" reflect a price the item was genuinely and recently sold at?
- [ ] Are all mandatory fees included in the advertised price, or clearly and prominently disclosed alongside it?
- [ ] Are testimonials and reviews genuine, current, and not selectively edited to change their meaning?
- [ ] Would an ordinary customer, reading or seeing the whole ad, come away with an accurate impression — not just a technically defensible one?
- [ ] Does someone review new ad copy and offers before they go live, rather than relying on whoever wrote the last one?
Building this kind of review step into your marketing process is far cheaper than responding to a complaint after the fact.
Frequently asked questions
Does this only apply to big companies?
No. The Competition Act applies to businesses of every size, including sole proprietors and small local shops. A local business's website and social media posts are held to the same general standard as a national retailer's campaign.
What if a customer just misunderstood my ad?
The test looks at the general impression a representation creates for an ordinary consumer, not whether one particular customer misread it. If the overall impression a typical reader would form is accurate, an isolated misunderstanding is unlikely to be the issue — but if many customers read it the same "wrong" way, that is a signal worth taking seriously.
Can I get in trouble for something a past employee wrote?
Potentially, yes. The business itself can be responsible for advertising it published, regardless of which employee or contractor drafted it. That is exactly why an ongoing review process matters more than assigning blame after a complaint arrives.
Is it enough to add a disclaimer in small print?
Not necessarily. A disclaimer that contradicts or substantially undercuts the main message of an ad may not be effective, especially if it is easy to miss. The safer approach is to make the main message accurate in the first place.
This is a corporate question
Start a file online — flat, published fees, reviewed by a licensed Ontario lawyer before a dollar is owed.