Drip pricing in Canada: why the first price a customer sees has to be the real one
The direct answer
Under Canada's Competition Act, section 74.01(1.1), advertising a price that is unattainable because of fixed obligatory charges or fees is a false or misleading representation, unless those charges are amounts imposed on the purchaser by or under federal or provincial law, such as sales tax. Section 52(1.3) applies the same wording to the criminal misleading advertising offence. The practice is called drip pricing: the customer sees one price first and mandatory fees appear as they move through the purchase. The Competition Bureau says drip pricing raises concerns under the Act, and that variable mandatory fees can raise concerns too. The safe approach is all in pricing: every mandatory fee the business itself charges is included in the first price shown, with only government imposed amounts added afterward.
Five conclusions
The argument, compressed.
- A price made unattainable by fixed mandatory fees is a false or misleading representation under section 74.01(1.1).
- The only exception is an amount imposed on the purchaser by federal or provincial law, such as sales tax.
- The same wording appears in the criminal provision, section 52(1.3).
- The Competition Bureau says variable mandatory fees can raise concerns as well.
- All in pricing, with every business imposed fee in the first price shown, is the safe presentation.
Working framework · 3 decisions
The first price check
Three questions for any advertised price, from a clinic's fee page to an event ticket or a product listing.
Decision 01 / 03
Mandatory
List every charge a customer must pay to complete the purchase: booking, service, processing, admin, cleaning.
The rule in one sentence
Section 74.01(1.1) of the Competition Act says that representing a price that is unattainable due to fixed obligatory charges or fees is a false or misleading representation, unless the obligatory charges represent only an amount imposed on the purchaser by or under an Act of Parliament or a provincial legislature. Parliament added the provision in June 2022, and section 52(1.3) carries the same wording into the criminal offence.
The Competition Bureau's drip pricing page, updated in August 2026, explains the concern: the customer is drawn in by a headline price and then meets mandatory fees later in the purchase. The exception is narrow, covering charges the government imposes on purchasers, such as sales tax. The Bureau adds that a mandatory fee whose amount varies could still raise concerns.
The test
If your own fee, added later, stops a customer buying at the advertised price, the advertised price is the problem.
What this catches in a small business
The provision is written for any price representation, so it reaches well beyond ticketing and car rentals. A salon that advertises a cut at one price and adds a mandatory service charge at the till, a studio whose class price gains a booking fee at checkout, and an online shop with a compulsory handling fee beyond the shipping the customer chose all present the same pattern.
Optional extras the customer chooses fall outside the rule, as do taxes. The question is always whether the fee is mandatory and whether the business, rather than a law, imposes it.
Pricing as part of the brand
The first price a customer sees is a promise, and the checkout either keeps it or breaks it. A brand that shows the full price up front loses a little headline appeal and gains the thing drip pricing destroys: the sense that this business says what it means.
Present the all in price wherever a price appears, name what it includes, and describe taxes as taxes. Where a genuine choice exists, such as delivery speed, show the options and their prices before the customer commits. Clear pricing is positioning, and under this provision it is also the law.
- One all in price in every ad, listing and menu.
- A plain line naming what the price includes.
- Taxes labelled as taxes; optional extras priced before commitment.
- The same price logic on the website, booking tool and invoice.
Before you use it
Questions that can change the recommendation.
Is drip pricing illegal in Canada?
The Competition Act, section 74.01(1.1), treats a price that is unattainable because of fixed obligatory charges or fees as a false or misleading representation, unless the charges are imposed on purchasers by federal or provincial law. Section 52(1.3) applies the same wording criminally.
Can I add a booking or service fee at checkout?
A mandatory fee your business imposes should be included in the first price shown. Adding it later makes the advertised price unattainable, which the Act treats as misleading. Optional extras the customer chooses are a different case.
Can sales tax be added after the advertised price?
Yes. The provision excepts amounts imposed on the purchaser by or under an Act of Parliament or a provincial legislature, and the Competition Bureau gives sales tax as its example.
Research record
What this guide draws from.
Each source note describes what the reference supports. Platform guidance, research findings and Branding Tatva's practical suggestions have different scopes.
