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How Ontario’s New Law Could Ruin it All

As I’m sure many of you have heard, Ontario has unanimously passed legislation that prohibits the expiry of loyalty miles. While many have praised this amendment to the Consumer Protection Act, that praise is short-sighted and supportive of law that will, in time, negatively impact Ontario.

What the Law Has Done

Bill 47, enacted as Chapter 34 of the Statutes of Ontario (2016), has several significant impacts. First, the law changes the definition of “consumer agreement” in the Consumer Protection Act (‘CPA’) to specifically include contracts with consumers where loyalty points are provided to the consumer (a loyalty program). This means:

  • Arbitration clauses in loyalty programs will be void (S.7(2) CPA);
  • Creates a warrant of quality in regards to the loyalty point or possibly their final redemption product – what this means for future litigation is immense (is Aeroplan required to warrant a point’s value, prohibiting future devaluations?)(S.9(3) CPA).

Any loyalty program that offers membership to an Ontario resident would be subject to this law (arguably, Ontario courts would assert jurisdiction, but this is not something I’m going to get into here).

There are hundreds of frequent flyer programs, and you think they will want to deal with creating a special set of Terms and Conditions just for Ontario residents, especially if other members could lie about their location to avoid expiry policies? No, they won’t. They’ll simply exclude Ontario residents from their program. This law will have the effect of excluding Ontario residents from loyalty programs around the world.

The new law doesn’t prohibit the expiry of points for reasons other than only the passage of time. For example, Aeroplan’s expiry policy, where miles expire after twelve months of inactivity, would remain acceptable. The sort of policies that say “your miles expire five years after they are earned” would be void.

Air Miles backed off on their expiry policy because of this law. Air Miles was accounting for the spoilage of these miles, and now they’re not. To balance, they’re going to have to recover costs in some other area. Likely, this means substantial devaluations on the redemption side. That toaster you wanted for 500 miles? Maybe it’ll be 1000 now. In this case, it was reasonable that people be expected to use their miles five years after earning them. Heck, the legal limitation period in Ontario is two years after a loss is known – if Air Miles took all your points away one day, you’d have three years less time to use the miles (by getting them back through litigation).

FIVE YEARS. That’s a long time. People who are actively engaging their miles, you know, showing loyalty in a loyalty program, wouldn’t have a problem with an expiry policy. Now, by banning points expiry, every good customer of Air Miles, an engaged and loyal customer, will be substantially harmed by the upcoming devaluations caused by the crying of unengaged customers.


This is a blog post, so I’m not going to write an essay, but this covers some of the more substantial effects of Ontario’s new law. Where a dispute arises, a customer may not be able to use an arbitration clause, which is usually paid for by the defendant company in consumer arbitration agreements, but go through the slow and expensive process of litigation. Further, we delve into the potentially dangerous black hole of making loyalty programs warrant their product (Does this mean that Aeroplan warrants the value of a point, and that warrant covers what is essentially a monetary product, meaning that warrant is a question of value? Would that mean loyalty programs couldn’t devalue points accrued, making them unsustainable?). Finally, Ontario will be alone in the world with this type of law, meaning foreign loyalty programs may decide to exclude Ontario residents.


  1. I thought that arbitration was inherently unfair to the consumer. The company is picking up the tab, and any arbitrator who has a pattern of ruling against the company will likely not be chosen for future arbitration cases.

    1. Nah, most arbitration clauses specify certain organizations, and often, the claimant is actually able to select the specific arbitrator.

    2. It absolutely is unfair to the customer. While DCTA says the consumer can pick the arbitrator, it is usually off of a list provided by the company. Do you think the company will have a name on that list that tends to rule for the customer more than the average arbitrator?

      I’m completely fine with binding arbitration when both sides agree to it when there is a specific point of contention, but to require everyone who uses a service to enter into it is totally unfair to the customer.

      Also, to address the question of “There are hundreds of frequent flyer programs, and you think they will want to deal with creating a special set of Terms and Conditions just for Ontario residents?” There are exceptions in T&Cs for specific residents all the time. Example: Any gift card with less than $10 on it can be exchanged for cash in California. Most places include this in their T&Cs and specify it is for California residents (or the company’s stores located in California). FF programs will just have a special section for Ontario residents, especially any airline with service to Toronto.

      If an airline is worried about everyone faking their addresses there, a simple “lisitng an address for another state or province than where you are actually a resident is a violation of these terms and conditions and may result in your account closed and all miles forfeited” clause will suffice in stopping the vast majority of it.

  2. I totally agree. There is no way that is is sustainable for businesses to issue miles if they never know when it will go off their books. They will have to either heavily devalue on the rdemption side or slow down in what they offer on the earning side. Think earning 1 Airmiles per $20 spend is bad? Wait till they want $50 spend per airmile. There needs to be some form of regulation. Airmiles gave a lot of notice, too bad there were that many people hoarding their points.

  3. In Canada at least, the Ontario market is too large for companies to leave completely over this. But you are right, the government shouldn’t be going further down the road of legislating private agreements. Otherwise ON could end up like QC which is usually excluded from contests due to its archaic regulation.

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