Personalized Digital Pricing Faces Scrutiny in Canada
Since federal NDP Leader Avi Lewis called for a ban on “surveillance pricing” last week, the term has become a hot-button issue in legislatures across the country.
Surveillance pricing refers to a practice in which consumers are charged different and individualized prices based on personal data collected by companies. Critics argue that rideshare, airline and grocery companies, among others, may be using the practice to figure out the highest amount a consumer would be willing to pay, and set the price accordingly.
Polls show that Canadians are suspicious of such algorithms changing their checkout prices. Now, progressive politicians across the country are moving to ban the practice.
But experts say the issue is nuanced and complicated to regulate – and it’s hard to tell how widespread it may be in Canada.
Algorithmic pricing is an umbrella term and tends to be standard practice, said Eddie Ning, an assistant professor of business at the University of British Columbia. Many companies use algorithms to decide sale prices, based on calculations relating to inventory, transportation and the cost of goods.
On the other hand, surveillance pricing refers to a more personalized practice, where a consumer is charged based on data about their characteristics or behaviours. That practice is more rare, Prof. Ning said.
Mr. Lewis has described surveillance pricing as “downright creepy,” calling for a federal ban in the vein of legislation on the issue proposed in March by Manitoba’s NDP government. New Democrats in Ontario, Saskatchewan and Nova Scotia have also taken up the cause.
In the U.S., a 2025 investigation by the Federal Trade Commission found that companies from grocery stores to clothing outlets were frequently using personal data to set prices, although probes into such practices in Canada are rare.
“The practice is opaque by design, making it hard to detect where and when it’s happening – and making federal oversight all the more necessary,” NDP spokesperson Aaron Zerfas said by e-mail.
But not all politicians are inclined to ban the practice. A day after the NDP’s motion failed in the House of Commons on April 15, Ontario Premier Doug Ford emphatically told reporters that he would not consider a ban.
“There’s no better way of letting people get lower costs – no matter if it’s cars or homes or groceries – than competition,” Mr. Ford said. If companies were colluding on prices, the Premier promised to “go after them and tear them to shreds,” but “nothing beats free market,” he said.
Canadians tend to be concerned about pricing algorithms as a whole, according to a January report from Competition Bureau Canada. Respondents expressed concerns about the potential for discriminatory or opaque pricing that could raise the cost of living. A minority said algorithmic pricing can foster competition by allowing companies to respond in real-time to supply and demand changes, or rapidly lower prices to align with those of competitors.
While many Canadians don’t recognize the term by name, nearly one in three are often suspicious that algorithmic pricing is happening, according to an Abacus Data poll from March. More than half said this kind of pricing should not be allowed.
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Even without explicit examples of companies in Canada engaging in surveillance pricing, consumers have a right to be worried, said Vass Bednar, the managing director of the Canadian Shield Institute.
Research in the U.S. on several large companies that also operate in Canada, such as Instacart and Amazon, has found that different consumers were seeing different prices, Ms. Bednar said.
“I don’t know why they’d have different pricing behaviours” in Canada, she said.
Knowing that prices could be influenced by your credit score, purchase history or even inferences about your emotional state “makes the economy feel like a casino,” Ms. Bednar said.
She added that markets are not fair when consumers shopping online can’t see what other people are being charged, don’t know if their data is being used to set prices and can’t opt out if it is.
“That’s not a free market,” she said. “That’s a market of digital extortion.”
More research into potential Canadian cases of surveillance pricing and less “knee-jerk” political reactions are necessary, Ms. Bednar said, highlighting potential approaches such as a federal private-sector privacy law, competition law or price-gouging legislation.
While surveillance pricing is seemingly rare in Canada, related practices are more common or widely accepted, such as dynamic pricing, region-based pricing or algorithms promoting more expensive items while hiding cheaper ones, UBC’s Prof. Ning said.
“These practices are always there,” he said. “It’s that now, with the power of the algorithms and the amount of data that firms have, they can do it at a much faster rate.”
Companies offering different promotions or coupons can also fall under the banner of setting personalized prices, Prof. Ning said.
If one person gets a 10-per-cent discount while another gets 20-per-cent off, “you essentially achieve the effect where people are getting different effective prices, but it’s framed as a discount,” he said.
Politicians trying to regulate surveillance pricing should be cautious about unintended consequences for some consumers, said Karl Littler, senior vice-president of public affairs at lobby group Retail Council of Canada. Senior discounts and offers related to customer loyalty programs could be considered prices based on personal data, and could be caught in the mix, he said.
“You want to be very careful not to throw the baby out with the bathwater,” he said.
This article was first reported by The Globe and Mail
