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The All-Inclusive Cost of Consumer Goods and Services

On March 27, 2018, the Legislative Assembly of Ontario carried the first reading of Bill 28, What You See is What You Pay Act (Consumer Protection Amendment), 2018. Those in support of this Bill seek to amend the Consumer Protection Act, 2002, to include provisions requiring all businesses to display, offer or advertise the all-inclusive cost of goods or services. The all-inclusive cost is the total of the cost of the good or service, HST, and any other charges, taxes, and/or fees.

In addition, the Bill states that those who display, advertise or otherwise present the cost of the goods or services must ensure that the duration of any promotional discounts affecting the final cost are clearly communicated to the consumer in a font size that is at least half of the font used to present the cost.

A corporation that is found in contravention of these provisions are liable for a monetary fine that is commensurate with the number of the corporation’s employees, as well as the cost of the goods or service.

Although Bill 28 offers additional transparency for consumers purchasing a good or service, there is no consideration within the Bill for estimates. It is unclear whether Bill 28 seeks to include contracts that are largely based on an estimated price that cannot be entirely known until the service is complete. Bill 28’s inclusion of the term “offer” would suggest that estimates are included in the all-inclusive cost scheme.

Without a specific carve-out for estimates, businesses will begin taking on a significant amount of risk that they have under-estimated the costs of a project. If Bill 28 does include estimates, there will be no room for contingencies to occur during a project that impact the time and cost it takes to create the finished product. This risk could culminate in increased insurance premiums and piecemeal contracts that attempt to limit the liability of the business. When these issues are passed on to the consumer by way of contractual waivers and increased project costs, the consumer will not have received an overall benefit from being offered the all-inclusive cost.

Bill 28 is far from being made law. As such, there is ample opportunity for the Ontario legislature to address the Bill’s problems. However, if enacted as is, both corporations and consumers should be concerned that Bill 28 will unduly interfere with commercial contracts, particularly in the trades sector.

Daniel & Partners LLP has the expertise to assist in all aspects of contractual negotiation, contractual disputes and debt collection. Please contact us today to assist you with your legal needs.

Blog post written by Nicholas Baxter, Associate.