What’s new in Québec’s consumer protection law?

Over the past year, the Québec National Assembly has been making significant changes to consumer protection legislation in the province of Québec. The government adopted new legislation at the end of 2023. Further changes have since been introduced to enhance a variety of requirements applicable to consumer disclosure and protection.

Bill 29 [PDF], which was passed and came into force in late 2023, introduced significant changes that prohibit the planned obsolescence of products and enhance consumers’ rights related to durability, repairability and maintenance of certain products.

More recently, the Québec Minister of Justice has proposed Bill 72 [PDF], which contains additional requirements regarding consumer protection. These requirements cover a wide range of matters, including fair pricing of food, regulation of certain credit or leasing transactions, and merchant responsibility in cases of fraud, among others.

These legislative changes will have meaningful implications for those carrying on business in the province of Québec.

Strict requirements regarding the durability of consumer products

Bill 29, which came into force on October 5, 2023, introduced new requirements regarding product durability. Specified products will benefit from a legal warranty of good working order. Products requiring maintenance will benefit from an enhanced legal warranty of availability of replacement parts and repair services. Planned obsolescence of products is prohibited, as is the use of techniques that make it more difficult to maintain or repair goods. Finally, the government now has the regulatory power to determine technical or manufacturing standards for goods.

To enforce these new requirements, penal fines for breach of the Consumer Protection Act have been increased and new monetary administrative penalties introduced. If an organization commits an offence under the Consumer Protection Act or its regulations, any of its directors, officers, mandataries or representatives are now presumed to have also committed the offence, unless it is established that they exercised due diligence. The effect of the presumption is to significantly expand the scope of liability for business representatives, boards and management.

Legal warranty of good working order

The legal warranty of good working order applies to the sale or lease of certain enumerated new products, as well as other goods specified by regulation. This new warranty is in addition to other legal warranties of quality, durability and normal use that already existed in the Consumer Protection Act, as well as the legal warranty of quality provided for in the Civil Code of Québec, which applies to all goods.

The duration of the warranty for each covered good will be determined by regulation. If the covered products fall into disrepair during this period, merchants or manufacturers will be responsible for the costs of repair. The new warranty covers both parts and labour and is transferable to subsequent purchasers of the product.

Merchants that sell additional warranties will have to disclose the existence of the statutory warranty of good working order. The consumer will have the right to terminate the additional warranty contract without cost or penalty within 10 days of purchase.

Replacement parts and repair services

The Consumer Protection Act already provided for the requirement to maintain replacement parts and repair services for a reasonable period after sale of the original product, unless the merchant specially disclaims this obligation by warning consumers at the time of sale that no replacement parts or repair services are offered. This obligation now extends to a requirement to provide information necessary to maintain or repair the goods.

Consumer protection legislative changes will have meaningful implications for those carrying on business in the province of Québec.

Regulations can specify certain types of parts or information that cannot be excluded from this obligation by merchants by way of a warning that replacement parts and repair services are not offered, the time for which those parts and that information must be available, and the time within which the merchant or the manufacturer must provide them to the consumer. Information relating to the availability of replacement parts and repair services, and information necessary to perform that maintenance must be disclosed. Replacements parts must be installable using commonly used tools, and repairs must be possible at a reasonable price.

The merchant or manufacturer must respond within 10 days to the consumer’s request for repair, providing the timeframe required to repair the good. Failure to respond, or failure to respect the timeframe, will require the merchant or manufacturer to replace the product or reimburse the purchase price.

Bill 72 will add further onerous requirements

On September 12, 2024, the Québec Minister of Justice presented Bill 72 which will add requirements to the Consumer Protection Act relating to the price of food products, tipping practices, credit contracts, long-term contracts of lease, and fraud. The Bill was adopted on November 7, 2024.

Price of food

Bill 72 proposes a range of provisions designed to ensure consumers are well informed and protected against unfair pricing practices regarding the retail sale of food products. For example, Bill 72 will require retailers to indicate, next to the price of a food product, whether sales taxes will be charged on that product.

Other measures are directed at addressing the disparity in pricing for consumers who are not participants in loyalty programs by requiring that both the price available to loyalty program members and the price applicable to non-members be disclosed. The font size of the program member price must not exceed the font size of the regular price by more than 25%.

Tipping practices

Tips proposed by an establishment in the province will be required to be calculated based on the pre-tax price. Further, consumers must have the ability to determine the amount of the tip to be given. If multiple tip options are offered, all options will have to be displayed in an equally prominent manner.  

Credit and leasing arrangements

Certain merchants entering open credit contracts, high-cost credit contracts, loan of money contracts and high-cost long-term lease contracts (such as a long-term vehicle lease) will be required to hold a permit. “High cost” refers to agreements where the credit rate, or the implied credit rate on a lease, exceeds 22% above the Bank of Canada Bank Rate. Failure to comply with this requirement could invalidate the contract.

The ability of merchants to unilaterally amend credit contracts and long-term leases will be significantly restricted. An amendment that has the effect of increasing the credit rate, imposing credit charges in a credit contract, or increasing the implied credit rate or implied credit charges in a long-term lease contract, will only be permitted at the consumer’s request.

A merchant will only be permitted to transfer any outstanding amounts owed on a trade-in to a new instalment sale contract or a long-term lease agreement under certain conditions. The merchant will be required to obtain the consumer’s consent, state the balance of the debt in the contract, and inform the consumer that the net capital of the contract includes the balance of the previous debt.

Lender-specific changes

All applications for open credit will be required to include a field for the consumer to indicate their desired credit limit. Merchants will be prohibited from granting a higher credit limit than requested. Any application form that does not state a credit limit must be declined.

Additionally, any fees associated with the membership or renewal of a credit card contract can only be excluded from the calculation of the credit rate if the fees are charged on an annual basis. Bill 72 will also prescribe a specific order in which a consumer’s payments must be allocated to outstanding credit balances for all open credit. The merchant must first allocate any payment to the debt with the highest credit rate. Thereafter, payments must be allocated to other debts in decreasing order of credit rate. 

If a consumer cancels any insurance that was purchased upon entering into a credit contract, merchants will be required to amend the credit contract to either reduce the payments or the term accordingly, at the consumer’s option. 

A lender will be required to send an electronic alert to consumers notifying them that their available credit is less than $100 if the lender wishes to permit overlimit transactions. A post-transaction notice will only be permitted if the lender does not have the borrower’s electronic address. Overlimit fees will continue to be prohibited. Lenders will, however, be expressly permitted to charge certain non-sufficient funds fees in addition to credit charges.

Finally, Bill 72 will clarify that all charges related to security interests must be included in the credit charges. However, specific registration fees will continue to be excluded from the computation of the credit rate.

Lessor-specific changes

Bill 72 introduces a series of measures aimed at requiring lessors to extend protections to lessees that are analogous to those required for borrowers in lending transactions. This will include implied credit rate disclosures. In this regard, lessors will be subject to similar requirements to those that currently apply to loans.

Lessors also will be subject to additional restrictions on excess wear and tear charges, including a requirement to specify when, and under what circumstances, such charges can be imposed.

Fraud

Bill 72 requires merchants with whom a consumer holds a demand deposit account to refund any amount debited from that account without the consumer’s authorization. Where there are strong indications of fraud — and the merchant does not take precautions to prevent it — merchants can be required to refund amounts debited even where the consumer provided authorization for the withdrawal.

Looking ahead

Both Bill 29 and Bill 72 highlight the strong desire of the Québec National Assembly to reinforce consumer protection laws in the province. Considering the many recent changes adopted by the National Assembly, businesses are encouraged to review and understand these new requirements and proactively consider any required changes to their practices and policies to comply with the letter and spirit of consumer protection legislation in Québec.