Is Affiliate Marketing Legal in Canada? (Illegal Canadian Affiliate Marketing Practices)

Is affiliate marketing legal in Canada? Yes, affiliate marketing is legal in Canada if you follow the Competition Bureau of Canada’s Competition Act, the Federal Trade Commission’s regulations, and the Advertising Standards Canada’s guidelines. These laws and rules protect consumers from unsolicited communications and deceptive affiliate marketers. They also require Canadian affiliates to obtain consent for any form of electronic communication.

Canadian affiliates make around 5%-40% in commission per successful sale. This translates to about $9,000-$60,000 annually. In fact, 16% of online sales in Canada and the US come from affiliate marketing, according to a 2022 article by Jordan Glazier in the Entrepreneur magazine. This means that affiliate marketing has a huge impact on Canada’s economy. While affiliate marketing can offer a sizable passive income, making constant money is challenging. You need to learn the business model, its legal requirements, the most profitable affiliate programs, and what illegal practices to avoid.

A study by CHEQ and the University of Baltimore showed that about $1.4 billion was lost due to affiliate marketing fraud and scams in 2020. Besides fraudulent activities, affiliate marketers lose potential income due to a bad reputation and failure to comply with affiliate program terms and national laws. Thus, potential affiliates must have comprehensive knowledge of the legal aspects of affiliate marketing in Canada to avoid illegal practices that can shut down their affiliate marketing business.

Is Affiliate Marketing Legal in Canada?

Yes, affiliate marketing is legal in Canada. Affiliate marketers must abide by the Competition Bureau’s Canadian Competition Act, the Advertising Standards Canada’s Influencer Disclosure Guidelines, and the Federal Trade Commission’s Endorsement Guides. Potential affiliates in Canada who want to advertise in other countries should also follow international regulations. For example, the European Union’s General Data Protection Regulation (GDPR) safeguards consumers’ personal data rights. The Office of the Privacy Commissioner of Canada also renewed its Memorandum of Understanding (MOA) with the members of the Unsolicited Communications Enforcement Network (UCENet), which monitors illegal electronic communication.

What is Affiliate Marketing Canada?

Affiliate marketing Canada is the act of advertising other people’s or businesses’ products and services in Canada to earn a specific percentage called “affiliate commission”. Correspondingly, a Canadian affiliate is an affiliate marketer that mainly promotes Canadian brands. Canadian affiliates use a customized link generated by an affiliate marketing program. These affiliate links are integrated into social media captions, blog posts, and other online marketing approaches. Affiliate marketers earn affiliate income when customers click the link and purchase products or services.

What are the Legal Requirements for Affiliate Marketing in Canada?

In-depth knowledge and understanding of affiliate program agreements, local and international affiliate laws and regulations, affiliate disclosures, and marketing communication consent are the legal requirements for affiliate marketing in Canada.

First, Canadian affiliates must thoroughly read their affiliate partner’s terms. This prevents contract breaches and potential loss of affiliate income.

Second, research affiliate marketing local and international laws. You should know how legal affiliate processes work in Canada and other countries because what may apply in Canada won’t suit other countries’ markets.

Third, declare affiliate disclosures. Advertising Standards Canada (ASC) is strict when regulating online marketing. For example, influencers must follow the Influencer Disclosure Guidelines to promote affiliate links or referral programs. Affiliate marketers should state necessary affiliate disclaimers on their video captions, blog posts, or social media updates.

Lastly, get customer consent before launching any digital marketing campaign like email blasts. Moreover, you must include an “unsubscribe” button or link to respect your consumers’ rights.

Do You Have To Pay Tax on Affiliate Marketing Canada?

Yes, you have to pay tax on affiliate marketing Canada. Affiliate marketers are independent contractors tagged as self-employed. They pay Personal Income Tax and Canada Pension Plan (CPP) premiums for affiliate sales or affiliate income as per the Income Tax Act. According to the Canadian Revenue Agency (CRA), the Personal Income Tax for self-employed individuals is 15%-33% (C$0 to C$235,675) and the CPP is 11.9% for the year 2024.

However, every Canadian resident has a basic personal exemption of C$15,000. And sole proprietors are entitled to Employment Insurance (EI), which is not mandatory. Besides these tax payables, sales tax and payroll tax can also be deducted depending on the circumstance. The good thing about self-employed income is that all operating expenses are deducted first before computing for the Personal Income Tax.

Why Does an Affiliate Marketing Business in Canada Need a Privacy Policy?

An affiliate marketing business in Canada needs a privacy policy to avoid legal repercussions from the Advertising Standards Canada or the federal government of Canada. A privacy policy has two sides: stating affiliate disclaimers and informing about personal information collection. When you don’t disclose affiliate relationships on your affiliate website while promoting your links or products, you will get penalized for violating the Canadian Competition Act. In the same sense, affiliate marketers who don’t ask consent for collecting personally identifiable information will directly overstep the Personal Information Protection and Electronic Documents Act (PIPEDA). The Privacy Commissioner of Canada (OPC) will then issue a fine of up to C$100,000 per infraction.

Does CASL Apply to Messages Sent to Recipients Outside Canada?

No, CASL doesn’t apply to messages sent to recipients outside Canada. The Canadian Anti-Spam Legislation (CASL) safeguards businesses and consumers from spammy or threatening commercial electronic messages (CEM) within Canada. Alternatively, does CASL apply to CEM received from other places? Yes, CASL applies to messages received in Canada from other countries. Individuals or businesses outside Canada that transact with clients or organizations inside Canada need to comply with the CASL. Since affiliate campaigns are mainly sent through digital marketing channels, the CASL protects Canadians from receiving marketing communications that are unsolicited.

What are Illegal Canadian Affiliate Marketing Practices?

Affiliate fraud and scams, information phishing, and non-disclosure of affiliate relationships are illegal Canadian affiliate marketing practices. Affiliate fraud like cookie stuffing, bot traffic, and affiliate website URL hijacking are becoming common in the 21st century. Moreover, affiliate marketing scams like pay-to-join programs, click spam, and fake affiliate marketing products are also dealing massive damage to the affiliate marketing industry. According to CHEQ, fraudulent affiliate marketing activities grew from 10% in 2020 to 17% in 2022.

The Federal Trade Commission is also strict with the non-disclosure of affiliate relationships. Canadian affiliates must follow the Endorsement Guides and put proper disclaimers on their blog posts or any social media platform they use. They need to inform customers that they earn commission through their affiliate links. Similarly, the Unsolicited Communications Enforcement Network (UCENet) deals with information phishing and other international scams. These laws make it safe for affiliate marketing beginners and consumers to purchase affiliate products and services online.

What are Canadian Affiliate Marketing Programs?

Canadian affiliate marketing programs are affiliate programs that originated in Canada or businesses/brands in Canada that are being distributed and advertised internationally. Some good examples are eBay Partner Network Canada, Questrade, and Amazon Associates Canada. Besides these long-standing affiliate programs, Pinterest affiliate marketing, influencer marketing, and social media marketing are also common.

5 Best Affiliate Programs for Beginners Canada

3. Best Buy Canada

4. eBay Partner Network Canada

5. Web Hosting Canada

Affiliate Marketing Canada Reviews

Affiliate marketing in Canada is slowly evolving to cater to the needs of Canadian shoppers and the competitive global landscape of e-commerce, according to a 2015 LinkedIn article by Chad Waite, Head of Growth at PermitFlow in San Francisco, California. Chad mentioned how the Canadian affiliate market has grown in terms of company diversity, foundational knowledge, and online marketing communication strategies. Big brands like Telus, Tim Hortons, and Canadian Tire are driving competitors to venture into the Canadian market.

Additionally, affiliate networks like ShareASale, CJ Affiliate (formerly Commission Junction), and ClickBank were tagged as the best affiliate networks in Canada, based on an article by Melody McKinnon on the Online Business Canada website. This is because of the wide range of their affiliate program and product offerings. They help Canadian affiliates increase their commissions and potential income.

Affiliate marketers in Canada make C$59,624 yearly on average, according to Glassdoor. It goes as low as C$48K and as high as C$74K.

Is Affiliate Marketing Legit in Canada?

Yes, affiliate marketing is legit in Canada, as long as you comply with the Advertising Standards Canada’s Influencer Disclosure Guidelines and the Competition Bureau’s Canadian Competition Act. And the Canadian affiliate marketing industry is growing by 10% year-over-year. According to Lezahne Nel’s article in MarketSplash, 10% out of the 57% population of affiliate marketers globally are based in Canada. This means that the Canadian affiliate market is getting bigger, even for student affiliates. And yes, you can do affiliate marketing as an international student in Canada. You don’t need to be in a specific country to be an affiliate.

While the affiliate marketing industry thrives in Canada, the rise in affiliate scams is also evident. Potential customers even equate it with other business models. They often compare affiliate marketing vs pyramid scheme. Thus, affiliate marketers must follow local and international laws on affiliate marketing and online advertising to prevent misconceptions and legal drawbacks.

Is Affiliate Marketing Legal?

Yes, affiliate marketing is legal, given that you follow local laws, international regulations, affiliate program terms, and marketing communication policies. For example, every affiliate must abide by the Federal Trade Commission’s Guides Concerning the Use of Endorsements and Testimonials in Advertising (Endorsement Guides). You should also state affiliate relationships clearly, along with earning affiliate commissions from your affiliate links.

Is Affiliate Marketing Legit?

Yes, affiliate marketing is legit. According to eMarketer, affiliate marketing sales surged by 52% since 2015. And overall affiliate marketing turnover reached $6.4 billion in 2019. Now, in 2024, the industry’s market value is estimated to be at $17 billion as per Demand Sage’s Data & Trends report in July 2024. However, affiliate marketing scams and fraud are rising like wildfire. That’s why online marketers must be vigilant about their affiliate websites, online traffic fluctuations, and various affiliate programs’ reputation.

Is Affiliate Marketing Worth It?

Yes, affiliate marketing is worth it if you earn over 5% commission per sale. Affiliate marketers make around $1,000 to $10,000 monthly, while beginners in affiliate marketing earn about $100-$1,000 monthly. You can make up to $150K+ per month, considering you have years of experience, high-ticket products, profitable niches, and an active pool of customer base. According to a Travelpayouts article by Brittany Sawyer, the affiliate marketing industry is forecasted to have an annual growth rate of 7.7%. While it is a thriving industry, you should still consider the affiliate marketing pros and cons before venturing into an affiliate marketing business. Fortunately, there are many other online business ideas in Canada to choose from if affiliate marketing doesn't sound right for you. 

Local Lead Generation is Far Less Complicated Than Affiliate Marketing

Demand Sage’s Affiliate Marketing Statistics (2024) article unveiled that the affiliate marketing industry is expected to hit $36.9 billion by 2030. This proves how lucrative the industry is as the years pass and the digital landscape progresses. Affiliate marketers can scale their passive income to up to $90,000 monthly, according to Charlie Chang’s 4-step YouTube video guide.

While earning $90K per month is achievable for an expert affiliate marketer, beginners can make less than $1K monthly on average. And because the global affiliate market is getting more saturated and competitive, potential affiliates need a significant amount of time, effort, and money to learn critical selling skills, modern digital marketing strategies, and relevant affiliate marketing techniques.

On the other hand, starting a local lead generation business is far less complicated than affiliate marketing. You don’t need to find the perfect niche, sell profitable products, or create a complicated online marketing strategy. With local lead generation, your target market is ready to buy their desired services. All you have to do is build microsites that organically rank high on Google Search. Once that is done, leads will start calling you. These free leads are what you sell to local business owners to make money online and earn up to $50K or more monthly.