Yes. If a customer in Canada cannot actually buy at the price you advertise, because a mandatory fee gets added later, that is drip pricing and the Competition Act treats it as a false or misleading representation. The only carve-out is for charges imposed by federal or provincial law, such as sales tax. Everything else has to be in the number you show first.
By Cody Wise, founder, Wise Media. Last updated 28 September 2026. This article explains how a Canadian statute applies to website design. It is not legal advice, and it is not a substitute for advice from counsel on your specific offering.
Summary
- Subsection 74.01(1.1) of the Competition Act makes advertising a price that is unattainable because of fixed obligatory charges a false or misleading representation.
- The only exempt charges are those imposed on the purchaser by or under an Act of Parliament or a provincial legislature. GST, PST and HST qualify. A booking fee, service fee or admin fee you invented does not.
- In January 2026 the Federal Court of Appeal upheld a $38.9 million CAD penalty against Cineplex over a $1.50 CAD online booking fee, and agreed that the test should be applied to the pricing shown above the electronic fold, without scrolling.
- That reasoning moves the compliance problem out of your terms page and into your layout. Where the number sits on the first screen is now the thing being judged.
- Penalties under s.74.1 reach the greater of $10 million CAD for a corporation, or three times the benefit derived, or 3 percent of annual worldwide gross revenues where the benefit cannot reasonably be determined.
- Since 20 June 2025, private parties can seek leave to bring deceptive marketing applications at the Competition Tribunal. The Commissioner is no longer the only party who can start one.
Table of contents
- What is drip pricing under Canadian law?
- What the Cineplex ruling actually changed for web design
- Does this apply to my business?
- The pages on your site most likely to breach this
- What it costs to get this wrong
- The seven step pricing display audit
- Common mistakes
- FAQ
What is drip pricing under Canadian law?
Drip pricing is advertising a price that a customer cannot actually pay, because mandatory charges get revealed later in the purchase flow. The Competition Bureau puts it plainly: it is “offering a product or service at a price that is unattainable because consumers must also pay additional charges or fees.”
Since 2022 this has been written directly into the Act. Subsection 74.01(1.1) provides that the making of a representation of a price that is not attainable due to fixed obligatory charges or fees constitutes a false or misleading representation. You do not have to intend to mislead anyone. The provision is in the civil reviewable conduct part of the Act, so the question is what the representation does, not what you meant by it.
The one exception, and why most fees miss it
The exception is narrow and worth quoting because it is routinely overstated. The provision does not apply where the charges “represent only an amount imposed on a purchaser of the product referred to in subsection (1) by or under an Act of Parliament or the legislature of a province.”
Read that twice. The charge has to be imposed on the purchaser and it has to be imposed by legislation. Sales tax clears both. So does a levy a statute requires you to collect from the buyer. What does not clear it:
- Booking fees, service fees, convenience fees, processing fees and platform fees you set yourself.
- Payment processing costs you pass through. The processor charges you, not the buyer.
- A “compliance fee” or “regulatory recovery fee” that recovers a cost the law imposes on your business rather than on the customer.
- Mandatory cleaning fees, setup fees or minimum service charges that every buyer pays.
The practical test is simple. If every single buyer has to pay it, and a statute does not impose it on them directly, it belongs inside the advertised number.
What about optional add-ons?
Genuinely optional charges are a different matter, because a price the buyer can actually obtain without them is attainable. The word doing the work in the provision is “obligatory”. The risk shows up when something is described as optional but is not: a delivery charge on a product that can only be delivered, an “optional” service package that is preselected, or an add-on the flow will not let you decline.
What the Cineplex ruling actually changed for web design
The Competition Tribunal ordered Cineplex to pay an administrative monetary penalty of roughly $38.9 million CAD over a $1.50 CAD online booking fee added to movie ticket purchases. Cineplex appealed. On 21 January 2026 the Federal Court of Appeal dismissed the appeal in Cineplex, 2026 FCA 10.
The penalty number is what got the headlines. The reasoning is what should change your website.
The general impression test moved to the first screen
Canadian misleading advertising law has always been judged on the “general impression” a representation conveys, not on whether a careful reader could eventually piece together the truth. In print, courts treated the whole advertisement, disclaimers included, as one representation.
Cineplex argued for that print approach: a disclaimer further down the page is an integral part of the ad. The appeal court did not accept it for a dynamic digital environment. The Tribunal’s approach, upheld on appeal, confined the four corners of the representation to the pricing shown on the tickets page above the electronic fold, without the need for scrolling down the page. Earlier print media jurisprudence was held not to apply in the same way online.
That is a design ruling wearing a legal citation. The unit of analysis is now the initial screen, and the initial screen is something your web team controls and your lawyer does not.
Why countdown timers and sticky buttons now carry risk
Conversion rate optimization has spent fifteen years building patterns that keep a visitor from scrolling: a countdown timer, a seat map that expires, a large primary button placed exactly where the eye lands, a sticky footer that keeps “Continue” permanently in reach. Every one of those is a reason a reasonable customer never sees what is below.
If the design offers no clear cue to scroll, the general impression is fairly read from the initial screen alone. The urgency mechanics that lift conversion are the same mechanics that make a below-the-fold disclosure indefensible. On a compliance review, a timer sitting above a hidden fee is not a neutral fact about your page. It is the argument against you.
The mobile problem nobody prices in
A desktop first screen on a 1440 pixel wide monitor might carry 800 pixels of vertical space. A phone in one hand carries roughly 600 pixels once the browser chrome is accounted for, and a hero image or a sticky header eats most of it. The same template that shows price, fees and total above the fold on desktop can push the total two full scrolls down on mobile.
Since the majority of Canadian consumer traffic is mobile, the mobile first screen is the one to audit first. Test it on a real device at the smallest width you support, not in a desktop browser resized to look like a phone.
Does this apply to my business?
The Competition Act is federal and applies across Canada. There is no small business exemption, no revenue threshold and no carve-out for service companies. If you promote a price to the public in Canada, you are inside the provision. The table below is a rough read of where the exposure actually sits.
| Business type | Typical mandatory fee | Exposure |
|---|---|---|
| Ecommerce store | Handling or fulfilment fee applied to every order | High. The fee is obligatory and appears at checkout. |
| Ticketing or events | Service or booking fee per ticket | High. This is the Cineplex fact pattern. |
| Short term rental direct booking | Mandatory cleaning fee, linen fee, resort fee | High if the nightly rate is advertised without them. |
| SaaS and subscriptions | Mandatory onboarding or platform fee on a plan page | Moderate to high. Depends on whether the plan can be bought without it. |
| Trades and home services | Trip charge, minimum call-out, fuel surcharge | Moderate. Higher where a flat “from $X” price is advertised. |
| Professional services | Admin or file fee added to a quoted rate | Moderate. Rises when a fixed fee is marketed publicly. |
| Restaurants and hospitality | Mandatory service charge on the bill | Moderate. Menu pricing is a representation to the public. |
Shipping deserves its own note. Where shipping genuinely varies by destination and the buyer has real choices, it behaves differently from a fixed charge every buyer pays. Where you apply one flat shipping amount to every order in the country, it starts to look obligatory and fixed, which is the combination the provision targets.
The pages on your site most likely to breach this
In an audit, the same six places account for nearly every finding. Work them in this order.
- The pricing page. Plan cards showing a headline number with a mandatory setup or onboarding fee explained in body copy further down.
- Product and listing cards. Grid views showing a base price where the detail page adds a fee. The grid is a representation on its own.
- Search and filter results. Sorting by price is the clearest possible signal that the displayed number is the price. If it is not the full price, sorting is misleading before the customer clicks anything.
- The booking or reservation widget. Nightly rate shown, cleaning fee added at the summary step.
- Google Ads, Shopping feeds and Meta catalogues. The feed price and the site price both have to be attainable. A feed is a representation to the public in its own right.
- Email and SMS promotions. “From $49” in a subject line where nothing is actually obtainable at $49.
If you are rebuilding or planning a new build, this is cheaper to design in than to retrofit, which is one reason we treat it as a standard checkpoint on every website build rather than a compliance task bolted on at launch.
What it costs to get this wrong
Section 74.1 sets out what a court or the Tribunal can order. The numbers are not proportionate to the size of the fee.
| Respondent | Administrative monetary penalty ceiling |
|---|---|
| Individual | The greater of $750,000 CAD, and $1,000,000 CAD for each subsequent order, or three times the value of the benefit derived, where that can reasonably be determined. |
| Corporation | The greater of $10,000,000 CAD, and $15,000,000 CAD for each subsequent order, or three times the value of the benefit derived, or, where that cannot reasonably be determined, 3 percent of annual worldwide gross revenues. |
Three other powers matter as much as the penalty:
- Corrective notice. Paragraph 74.1(1)(b) allows an order requiring you to publish a notice bringing the finding to the attention of everyone likely reached by the conduct, including a description of the conduct and where it ran.
- Restitution. Paragraph 74.1(1)(d) allows an order to repay an amount up to the total paid for the products, distributed among buyers. On its wording that power attaches to conduct reviewable under paragraph 74.01(1)(a), the general false or misleading representation provision, which is frequently pleaded alongside the drip pricing subsection.
- A ten year prohibition order. Under s.74.1(2) an order not to repeat the conduct runs for ten years unless the court specifies less.
The due diligence saving, and what it takes to rely on it
Subsection 74.1(3) provides that no order may be made under the notice, penalty or restitution paragraphs if the person establishes that they exercised due diligence to prevent the conduct. That is a real defence and it is also a documentation problem. Due diligence you cannot evidence is not due diligence. A dated audit, a written pricing display standard, and a record of the fix you shipped are the artifacts that make the argument. A verbal instruction to the developer is not.
It is no longer only the Commissioner who can bring this
This is the change most Canadian businesses have not registered. Since 20 June 2025, private parties can apply for leave to bring applications at the Competition Tribunal under the deceptive marketing provisions, alongside several other heads. The leave test was broadened: an applicant directly and substantially affected in respect of part of their business can qualify, and the Tribunal may also grant leave where it is in the public interest to do so.
Practically, that means a competitor who loses bids to your understated headline price, or a consumer group acting in the public interest, can now start the proceeding. Waiting for the Bureau to notice you is no longer the shape of the risk.
The seven step pricing display audit
This takes a competent developer under a day on most sites. Run it in this order, because each step narrows the next.
- Inventory every mandatory charge. Pull the list from your payment processor and your order data, not from memory. Anything that appears on 100 percent of transactions is obligatory whatever it is named.
- Classify each one. Imposed on the purchaser by federal or provincial legislation, or not. There is no third category. Write the statute beside the ones you claim are exempt.
- Rebuild the displayed price. The advertised number becomes base plus every non-exempt mandatory charge. Tax can still be shown separately and added at checkout.
- Screenshot the first screen. Every template that shows a price: home, category, product, pricing, booking widget, cart. Capture on a phone at your smallest supported width, and on desktop.
- Apply the scroll test. On each screenshot, is the full attainable price visible without scrolling, and is there a clear cue to scroll if anything material sits below? A fee visible only after a scroll, on a page with a timer or a sticky button above it, is the finding.
- Fix the feeds. Update Google Merchant Center, Meta catalogues, any marketplace listing and any price shown in email templates. Sites get fixed and feeds get forgotten.
- Write it down. Date the audit, record the classification decision for every fee, keep the before and after screenshots. That file is the due diligence record you will want if anyone ever asks.
One caution on step 3. Folding fees into the headline number raises your advertised price, and the reflex is to protect the old number. Resist it. The Cineplex outcome is a straightforward demonstration that the arithmetic on a disclosure shortcut is bad: a $1.50 CAD per transaction fee generated a penalty in the tens of millions. A higher honest number that converts slightly worse is a cheaper business than a lower number that is not obtainable.
If the fee genuinely cannot be absorbed, the honest alternatives all work: raise the base price and remove the fee, show “total” prominently beside the base number on the same screen, or default the display to the all-in figure with a breakdown available on the same view. What does not work is keeping the fee and hoping the disclosure below the fold carries it.
Common mistakes
- Treating the terms page as the disclosure. A linked terms document is not part of the first screen. It was not persuasive in print and it is weaker online.
- Calling a fee a tax. “Regulatory fee” and “compliance surcharge” are not amounts imposed on the purchaser by legislation. Naming does not move a charge into the exception.
- Fixing the checkout and leaving the category grid. Every screen that shows a price is its own representation. The grid is usually where the customer forms the impression.
- Fixing the website and forgetting the ad feed. Shopping feeds, catalogues and marketplace listings are separate representations and separate exposure.
- Assuming small businesses are not targets. The Act has no size threshold, and private applications broaden who can start a proceeding.
- Running a timer above a fee. Urgency mechanics undercut any argument that a customer would have scrolled.
- Doing the work and keeping no record. Without dated evidence, the due diligence saving in s.74.1(3) is very hard to run.
- Letting a chatbot quote prices. A generated price is a representation to the public in exactly the same way a pricing page is, which is covered in whether your business is liable for what its AI chatbot says.
There is a conversion point in here as well as a legal one. Unexpected fees at checkout are one of the most reliable causes of cart abandonment in any ecommerce dataset. Moving the true number forward loses you some clicks at the top and recovers them at the step where the customer was leaving anyway, which is the same logic behind putting proof where the hesitation is rather than where it looks tidy.
Pricing display is one of several places where Canadian law now reaches into layout rather than policy. British Columbia’s subscription contract rules constrain how renewals are presented at checkout, privacy policy requirements reach the footer, and platform choice affects how much of this is configurable at all, which is worth weighing when you are choosing between WooCommerce and Shopify.
Frequently asked questions
Do I have to include GST and PST in the advertised price?
No. Sales taxes are amounts imposed on the purchaser by an Act of Parliament or a provincial legislature, which is exactly what the exception in s.74.01(1.1) covers. You can advertise pre-tax and add tax at checkout. Every other mandatory charge has to be inside the advertised number.
Is a mandatory cleaning fee on a rental booking site drip pricing?
If every guest pays it and no statute imposes it on the guest, it is a fixed obligatory charge, so advertising a nightly rate that excludes it is the pattern the provision targets. The straightforward fix is to show a total for the stay at the same prominence as the nightly rate, on the same screen, with the breakdown available there.
Does this apply to prices in my Google Ads or Shopping feed?
Yes. A price in an ad, a Shopping listing or a product feed is a representation to the public in its own right. Fixing the website while leaving an old price in the feed leaves the exposure open and creates a second inconsistency that is easy for anyone to document.
What if the fee is genuinely optional?
The provision reaches fixed obligatory charges. A charge a buyer can decline, on a path that actually completes the purchase without it, is not obligatory. The trap is the preselected add-on or the “optional” service the flow will not let you remove. If your own analytics show close to 100 percent attachment because it cannot be declined, treat it as mandatory.
Can a customer or competitor bring this against me directly?
Since 20 June 2025, private parties can seek leave from the Competition Tribunal to bring deceptive marketing applications. Leave is not automatic and the applicant has to meet the statutory test, but the Commissioner of Competition is no longer the only route to a proceeding.
Does showing the full total at checkout fix the problem?
Not on its own. The representation being judged is the one that drew the customer in, which is usually the listing, ad or pricing page rather than the final step. Accurate checkout totals are necessary. They do not cure an unattainable headline price several screens earlier.
The takeaway
For a decade, where a fee got disclosed was a conversion decision. After January 2026 it is a legal one, judged on what a customer sees before they scroll. That test is satisfied or breached by a template, a breakpoint and a stylesheet, which means it belongs to whoever builds and maintains your site.
The fix is not expensive. Inventory the fees, classify them against the statutory exception, rebuild the displayed number, screenshot every first screen on a phone, and keep the record. Most sites are a day of work away from clean.
Get your pricing pages audited
Wise Media builds and maintains Canadian websites where pricing display, consent and accessibility are part of the build standard rather than a cleanup project after launch. If you want the audit run on your pricing pages, checkout flow and ad feeds, and the fixes shipped, tell us about your site through the intake form and we will come back with scope. Ongoing work runs through our website growth packages.