Quebec consumers will benefit from greater protections following the enactment of two related regulations that introduced a new regime of administrative monetary penalties and increased fines for non-compliance of the Consumer Protection Act.
Under the new regime, Quebec’s consumer watchdog can now impose administrative monetary penalties for “objectively observable failures” to comply with the Act or the new Regulation respecting the Application of the Consumer Protection Act.
Read More
The head of the Office de la protection du consommateur (OPC), Québec’s consumer protection regulator, can levy administrative monetary penalties ranging from $300 to $1,750 for a natural person, and from $600 to $3,500 for entities. Directors and officers of an entity can be held jointly and severally liable for failure to comply with an administrative administrative monetary penalty, unless they establish that they exercised due diligence to prevent the non-compliance. What’s more, to guarantee payment of the administrative monetary penalty, the Act provides for a legal hypothec, similar to a lien, on the movable and immovable property of the entity, as well as on that of each of the directors and officers held solidarily liable. Administrative monetary penalties are different from penal fines, points out the law firm Davies Ward Phillips & Vineberg LLP in a legal bulletin. It is an enforcement mechanism that is less onerous for authorities compared to penal proceedings, which trigger the application of rights under the Canadian Charter of Rights and Freedoms and Québec Charter of Human Rights and Freedoms. “But when an administrative monetary penalty imposes a ‘true penal consequence,’ similar constitutional guarantees can apply,” notes Davies. “The implementation of the administrative monetary penalty regime could therefore signal an increase in the activities of the OPC to enforce the Act. This new regime could also give rise to constitutional challenges.” The OPC may issue notices of non-compliance in a wide range of cases that include general rules to any consumer contract and specific rules applicable to certain contracts only such as contracts of sale or lease of goods, contracts of services, distance contracts and contracts of credit. The OPC may impose administrative monetary penalties on businesses when for example it imposes costs on the consumer that are not clearly set out in the contract, drafts the contract and related documents in a language other than French, requires the consumer to submit disputes to arbitration or restrict the consumer’s right to before a court or extricate themselves from the consequences of their own acts through an exclusion of liability clause. The new regulations also increases penal fines to a maximum of $15,000 in the case of a natural person or $100,000 for a legal entity. According to the law firm Stikeman Elliott LLP, courts can now take a number of factors into to account to determine the amount of the fine, including the size of the company, the steps the business took to prevent the offence or mitigate its consequences, the gains procured by the business from the offence, the loss caused to consumers, the number of consumers that were affected, and the business’s past conduct. The new consumer protections follows the adoption of Bill 29, An Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods, in October 2023. The two new regulations that gave effect to the new regime was enacted on December 2024. Administrative sanctions related to the CPA will come into effect on January 5, 2025, with some exceptions that will take effect on October 5, 2025, and October 5, 2026.
RELATED:
Leave a Reply