By: Ingrid Kao

Influencer marketing has become increasingly popular in Canada over the past few years.

Social media influencers often use platforms such as YouTube, Instagram, Facebook, Twitter, Twitch, or TikTok to make posts and videos to accumulate followers. Many of them can attract millions of people to their platforms. More businesses are now paying influencers to advertise their products and brands instead of traditional advertising companies.

For example, a skincare company can hire a beauty guru to share their fondness for a new lotion. Or a vitamin or protein product company can hire a fitness YouTuber to promote a new supplement or flavour of protein shake. The government of Canada also worked with influencers to raise awareness of the danger of opioid usage among teenagers in 2019. [1]

Regulation in Canada

A social media platform that promotes a product, service or any business is regulated by Canada’s Competition Act (the Act). [2] 

The Act protects the consumers by ensuring that influencers are not showing their audiences false or misleading information about products or brands. [3] Besides the Act, a non-profit and self-regulated industry body called the Advertising Standards Canada (ASC) also ensures the integrity of influencer advertising. [4]  

The ASC has established the Canadian Code of Advertising Standard, which outlines criteria that influencers must meet for acceptable advertising. The Code allows consumers to complain about deceiving or misleading advertisements and requires the influencers to be truthful about the products and services. Under the Code, every influencer must disclose whether they receive money or commissions, free products, services, discounts, gifts, or free trips with the company. Furthermore, they must report if they have personal connections with the company.

The strict regulation protects consumers who greatly rely on the opinions shared by influencers when making purchasing decisions. In addition, a law enforcement agency called the Competition Bureau Canada also protects Canadian consumers. The Bureau sends letters to advise companies participating in influencer marketing and holds companies and influencers responsible for all deceptive and misleading content. [5] 

Takeaway

Influencer marketing is an efficient way for companies to promote their brand and product. But social media influencers should always give honest reviews on their feelings about a product or brand based on their personal experience. Furthermore, companies who desire to use influencer marketing should disclose all connections with the influencers and ensure that the advertised content is accurate. Failure to be transparent about the relationship and advertisements violating the Code can attract legal liability and have severe consequences. 

[1] https://www.cbc.ca/news/politics/online-influencers-youtube-trudeau-1.4965417

[2] https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2021/are-you-social-media-influencer-what-to-know.html

[3] https://www.competitionbureau.gc.ca/eic/site/cb-bc.nsf/eng/04372.html

[4] https://adstandards.ca/

[5] https://www.canada.ca/en/competition-bureau/news/2019/12/influencer-marketing-businesses-and-influencers-must-be-transparent-when-advertising-on-social-media.html