On Monday, Bill 47 passed in Ontario on third reading with substantial amendments to the bill that was originally proposed. The law, as passed, will prohibit rewards points from expiring due to the passage of time alone. Equally important, the prohibition will apply retroactively such that any rewards points that expired on or after Oct. 1, 2016, must be credited back to the consumer.
The law will come into force on a day to be proclaimed. However, the Government of Ontario has indicated to expect the law to come into force in 2017 after it develops regulations that will include further details regarding the scope of the prohibition and any exceptions. On this point, the definition of reward points (i.e. points provided to a consumer under a consumer agreement that can be exchanged for money, goods or services) is subject to the regulations. Therefore the regulations may significantly expand or restrict the scope of application of the prohibition.
In addition, the law provides that rewards points may expire due to reasons “other than the passage of time alone, subject to any limits that may be prescribed”. It is expected that one of these secondary reasons that could result in rewards points expiring is account inactivity. Many rewards points programs require account activity (typically via earning rewards points or a redemption), failing which the account and, by implication, the associated rewards points expire. However, as noted, we will have to wait and see which secondary reasons, if any, are ultimately adopted in the regulations.
In terms of next steps, the Government of Ontario has indicated it will consult with stakeholders in order to begin developing the regulations. Businesses that offer rewards programs in Ontario should consider the matter closely as the impact of these changes can be significant. In any event, stay tuned for further details.