Are you interested in learning more about cancellation fees for a fixed-length contract? You may be interested in the following information.
If you concluded a fixed-length television service contract in which you received a discount on a product essential to the use of the service, such as a terminal, a receiver, or a satellite dish, the service provider is subject to rules that limit the cancellation fees that can be charged.
Factors that affect the cancellation fees
The greater the discount on the sales price of a product, the higher the cancellation fees can be. The closer you are to the end of the contract at the time of termination, the lesser the cancellation fees can be. The cancellation fees can never be greater than the amount of the discount you received.
Discounts you received on the price of a service or a rental have no impact on the calculation of the cancellation fees.
Calculating the cancellation fees
Here is the formula to allow you to calculate the maximum cancellation fees you can be charged if you received a discount on the sale price of a terminal.
[Discount on the sale price of the device] - [Discount on the sale price of the device x Number of complete months elapsed ÷ Length of the contract] = Maximum cancellation fees
The month during which you terminate the contract is considered a completed month.
Sample calculation when a discount has been given
Vous avez conclu un contrat d’une durée de 24 mois. Vous avez reçu gratuitement un terminal d'une valeur de 300 $. Le rabais accordé correspond donc à 300 $. Vous décidez d’annuler le contrat au 22e mois. Le calcul des frais d’annulation maximaux que le fournisseur de services peut demander se fait comme suit :
$300 - ($300 x 22 ÷ 24), simplified as $300 - $275 = $25.
The service provider can charge a maximum fee of $25.
If you concluded a fixed-length television service contract in which you received no discount on a device essential to the use of the service, such as a terminal, a receiver, or a satellite dish, the service provider is subject to rules that limit the cancellation fees that may be charged.
Calculating cancellation fees
If you did not receive a discount on the sale price of a device essential to the use of the service, the cancellation fees cannot exceed the lesser of the following 2 amounts:
- an amount not exceeding 10% of the price of the services specified in the contract that were not delivered.
This calculation also applies if you received a discount on the price of a service.
If you are cancelling the rental of a device related to your television service subscription (for example, a terminal) and the provider wants to charge cancellation fees, these fees must be included in the maximum amount allowed. They cannot be added to it.
Sample calculation when no discount was given
If you signed a 24-month contract with a monthly fee of $30 and decide to cancel your contract in the 12th month, the price of the services specified in the contract that were not delivered is $360 (12 months [number of months remaining in the contract] x $30 [monthly fee]).
10% of $360 is $36. As this amount is lesser than $50, the maximum cancellation fee that can be charged is $36.
Failure to respect the maximum cancellation fees
If your service provider has charged cancellation fees greater than what is permitted, you can dispute the fees charged. You can also file a complaint with the Office de la protection du consommateur. See Contact us to find out how to reach us.
Last update : February 28, 2023
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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.
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