06/04/2014 05:00 EDT | Updated 08/04/2014 05:59 EDT

Anti-Spam Legislation Means Headaches For Small Business

Tim Robberts via Getty Images

Businesses across Canada, especially smaller companies, are scrambling to prepare for Canada's Anti-Spam Legislation, which comes into effect less than four weeks from now on July 1. Some say they simply won't be ready.

"We have to take action straight away," said Carol Sebert, principal at Creative Matters, a small carpet and rug design firm in Toronto. "Because the program we use right now, I can only send that email up to July 1."

The new law prevents businesses from sending commercial electronic messages — emails, texts or even social media messages — to Canadians without their consent. It's among the toughest of such laws in the world, with penalties up to $1 million for an individual violator and up to $10 million for a company that violates the legislation. 

Sebert's company sends out an electronic newsletter about twice a month.

"That's a large part of our business," said Sebert, "We're sending a lot of images all the time to show past projects and just to remind them that we exist and this is what we do."

"That's how we generate business. I do have this company of 12 people, but I can't fly people all over the country to remind people that we exist. That's expensive."

Anti-spam law a surprise

Sebert was not aware of the legislation or the impending deadline until contacted by CBC News.

She is now learning as much as she can about the legislation and says it will have a dramatic effect on her company.

To begin with, she will have to obtain express consent from just about everyone on her mailing list in order to continue sending them emails.

But with email recipients all over the world, first she has to figure out which ones are in Canada.

"To write to all our Canadian clients and ask them to check off if they want to stay subscribed, well let's face it, a lot of people don't open it. Or they might not open it this month, they might open it next month," Sebert said.

"And we don't have very much time, do we?"

Confusion over legislation

So much confusion and fear exists over the legislation that some firms are now offering to help companies like Sebert's prepare for the anti-spam law.

Elite Email, which makes marketing software and email newsletters, has put out a CASL Survival Guide.

"Businesses must adapt now and many organizations are not ready. They simply don't know how to prepare," says Elite Email president Robert Burko in a press release.

Elite says their online guide outlines the regulations, timing, requirements, penalties and exemptions contained within the anti-spam law. It says its guide also helps organizations identify whether or not they have proper consent to continue to communicate electronically, and if not, how to gain that consent prior to the July 1 deadline.

2 types of consent

There are two types of consent defined under the legislation: implied and express.

Consent can be implied in some cases where a previous relationship exists. It can include an exchange of business cards, sign-up forms where no consent is asked, or verbal requests either in person or over the phone.

Obtaining express consent can be more onerous, says David Schnurr, a partner with the law firm Miller Thomson.

"It has to be a form of consent that includes your identifying information, a clearly defined purpose for which you are requesting the consent, as well as your full contact information." Schnurr said.

"Express consent requests have to be sent out to any individual or organization where you can't fall back on another exemption or implied consent."

Schnurr's firm is holding complimentary breakfast and information sessions on the anti-spam law across the country, leading up to July 1.

"We're noticing there is a strong contingent of our clients that are unprepared or unaware of the legislation and its reach." Schnurr said.

David Fraser, a Nova Scotia lawyer who has studied the anti-spam law, said the legislation should be scrapped.

Fraser told CBC News earlier this spring, "The problem of spam has by and large actually been dealt with via spamfilters, kind of better technology and things like that," he said.

"I think ultimately it's not going to have a big impact on the consumer because the consumer is still going to continue to receive Nigerian fraud inheritance scams and things like that, because this legislation, while it purports to regulate people outside of Canada, they're going to have a very hard time doing that," he said.

Privacy concerns

Michael Geist, Canada research chair in internet and e-commerce law at the University of Ottawa, defends the legislation.

In a blog post on his website, Geist said, "For millions of Canadian internet users, the law should provide them with greater control over their inboxes."

"The law," Geist writes, "is unlikely to eliminate all spam — no law can single-handedly accomplish that — but with several large Canadian-based spamming organizations operating within the country, enforcement agencies will now have the tools to bring legal actions that could yield multimillion-dollar fines and grind spamming activities to a halt."

Big cost for small business

For a small company like Sebert's Creative Matters, with just 12 employees, changing their software, obtaining consent from hundreds of clients and complying with the legislation comes with a significant cost.

"I gotta pay somebody to do that. Now that's going to be expensive too. There's a big cost to that. I could see that being weeks and weeks of work. And I don't have somebody for that."

Sebert says she doesn't understand why any of this is necessary when people can simply click on the unsubscribe link in her emails.

"If there's the opportunity to take your name off a list, I don't understand why we've got to go through this rigmarole to make sure that people are willing to be on a list."

"We have a Conservative government that's pro-business and this seems really against business. Unless they're going for the big guys that are destroying computer systems, I understand that. But [for] a little business like Creative Matters [it] seems ridiculous."

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