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Learning how to deal with the complexity of Canadian direct selling regulations, laws and compliance requirements

Legal and Regulatory LinkedIn Article image nologo
Date: 27 Feb, 2023

Problem solving is at the heart of what makes industry associations like DSA Canada thrive. Complexity of regulations, laws and compliance requirements make it important for companies to be able to get together, to share challenges and discover solutions. In the direct selling space, DSA Canada plays the central role in facilitating these discussions, and provides knowledge, education and a collective voice.

Canada is a direct selling market that has relatively high levels of regulation. While this can bring certainty and predictability to operations, it can also create unnecessary barriers to entry and success.

For direct selling companies who are contemplating entering the Canadian market, they are sometimes unaware that direct selling in Canada is governed by the different legislation of the ten (10) provinces and three (3) territories, as well as by federal legislation.

Provincial and territorial legislation covers several topics, including business registration and licencing, surety bonds and licencing of sales consultants, as well as a range of sales related requirements.

Federally, direct selling is impacted by the Canadian Competition Act, R.S.C. 1985, as amended, which establishes requirements and restrictions related to the operation of a multi-level marketing plan versus a prohibited scheme of pyramid selling. The Competition Act is enforced and administered by the Competition Bureau of Canada. Other federal legislation related to products, tax and data privacy also have an impact on direct selling businesses.

DSA Canada continuously advocates for industry-friendly policy with all levels of government; however, the current post-pandemic environment has created a host of challenges in Canada for our industry. To assist our members, we recently held our annual in-person Legal and Regulatory Seminar in Toronto.

At the Seminar, a great group of speakers and attendees spent the day looking at the many issues and opportunities that they face on a day-to-day basis, as well as what is coming along over the next few years.

The topics covered the breadth of the issues that are currently impacting direct sellers, including:

  • Cybersecurity and online fraud
  • Compensation plans and the MLM framework
  • Product regulation
  • Customs challenges
  • Independent contractor status

Furthermore, across the day, our members heard from:

The insights shared may have left members feeling slightly overwhelmed at the sheer amount of work required to meet government requirements. It also showcased how valuable being a part of DSA Canada can be. With the right help from skilled employees, knowledgeable service providers and the backing of DSA Canada, this country remains a popular and profitable direct selling opportunity.

DSA Canada members and intending members have exclusive access to a number of business and regulatory guidance documents, to support their entry and ongoing success in the Canadian market. Contact info@dsa.ca to find out more.