Baird HallPart of: Canada subscription cancellation law
Ontario is replacing its 20-year-old consumer law. The new Consumer Protection Act, 2023 makes consent the default for renewals and requires an easy way out of subscriptions. It is not in force yet, so now is the time to prepare.
A quick note
This is a practical guide, not legal advice. The Act's detailed rules arrive through regulations that are still being finalized, so specifics can change. Confirm your setup with counsel.
How to prepare for Ontario's new rules
Audit your renewal and cancellation flows against what the Act sets out.
Get express consent to renew. Require an active step before a renewal, extension, or contract change takes effect.
Build in an ongoing right to cancel. Auto-renewing contracts must let customers cancel at any time, not just in a set window.
Remove barriers to cancelling. Take friction out of the whole exit path, not just the final button.
Disclose the term and price. State whether a contract is fixed or indefinite, and show the total payable for fixed terms before signup.
Give advance renewal notice. Keep giving at least one month's notice before an auto-renewal, as Ontario requires today.
What the Consumer Protection Act, 2023 is
Introduced as Bill 142, the Consumer Protection Act, 2023 received Royal Assent in December 2023 and will repeal and replace Ontario's Consumer Protection Act, 2002. It modernizes the rules for consumer contracts, including subscriptions and memberships.
What changes for subscriptions
1. Express consent to renew or amend
A customer must take an active step to accept a renewal, extension, or change to their contract. If you do not follow the notice and consent process, the customer gains a right to cancel.
2. An ongoing right to cancel
Contracts that renew or extend automatically must give the consumer a continuing right to cancel. Cancelling cannot be a one-time window that closes.
3. No unnecessary barriers
The regulations will prohibit businesses from putting unnecessary barriers in the way of cancelling a subscription or membership. This reaches beyond a simple cancel button to the whole exit experience.
4. A ban on unfair contract terms
The Act also makes terms that trap consumers unenforceable, including mandatory arbitration clauses and class-action waivers. A hard-to-cancel subscription cannot fall back on fine print to limit a customer's options.
Gym and membership contracts: rules already in force
Ontario already regulates prepaid memberships closely, which signals where the new Act is heading. A gym or fitness membership paid $50 or more in advance counts as a personal development services contract.
These contracts cannot run longer than a year. To renew one automatically, the business must give written notice 30 to 90 days before it ends. Renew without that notice and the renewal is invalid, so the customer can cancel and reclaim any money paid after the original term.
Penalties and enforcement
The Act doubles the maximum fines. An individual can face up to C$100,000, and a corporation up to C$500,000, alongside stronger enforcement powers.
This matters because Ontario's existing rules have seen little active enforcement. Doubled fines and new powers signal that is changing.
When it takes effect
The Act is passed but not yet in force. It waits on supporting regulations, which the government consulted on through early 2025. Businesses selling into Ontario should expect to update their practices in 2026.
Who does it apply to?
It applies to businesses that sell to consumers in Ontario, whether or not the business is located there. If you have Ontario subscribers, the Act reaches your contracts with them.
How Churnkey helps you prepare and reduce churn
Churnkey offers a Cancel Flow that is compliant and retains customers, two outcomes that are hard to balance at once.
Getting started is easy, with an SDK, an embedded option, or a self-serve hosted page.
Its automatic compliance detects each customer's location and shows the right cancel option for their province.
Before a customer confirms, Churnkey can offer a pause or discount they are free to decline, and you can A/B test flows to find what saves revenue. On average, companies using Churnkey save 20 to 40% of the revenue they would otherwise lose to churn.
Churnkey is GDPR compliant and SOC 2 Type II certified. It supports compliance with cancellation rules like these, but does not replace legal review.
FAQ
What is Ontario's Consumer Protection Act, 2023?
A new consumer law (Bill 142) that received Royal Assent in December 2023 and will replace the Consumer Protection Act, 2002. It updates the rules for consumer contracts, including subscriptions and memberships.
When does the Ontario CPA 2023 come into force?
It is passed but not yet in force. It depends on supporting regulations, which the government consulted on through early 2025. Businesses selling into Ontario should expect to update practices in 2026.
Does it apply to my business?
If you sell subscriptions to consumers in Ontario, yes, whether or not your business is based there.
What does it require for subscription cancellation?
Express consent for renewals and amendments, an ongoing right to cancel auto-renewing contracts, and no unnecessary barriers to cancelling a subscription or membership.
What are the penalties?
The Act doubles the maximum fines. Individuals can face up to C$100,000 and corporations up to C$500,000, alongside stronger enforcement powers.
Does a confirmation step or retention offer break the rules?
No. The rules require that cancelling be easy and available. They do not forbid a confirmation step or a relevant offer the customer can decline. Avoid anything that hides, blocks, or complicates completing the cancellation.
How can Churnkey help my business prepare?
Churnkey provides a hosted, self-serve Cancel Flow with an ongoing online exit, automatic compliance by location, and A/B testing. You can present a fair offer before the customer confirms while leaving them free to cancel. It supports compliance with rules like these, but does not replace legal review.