Bill 29 - Québec Publishes Draft Regulations Regarding New Monetary Administrative Penalties for Breaching the Consumer Protection Act

Introduction 

On August 21, 2024, the government of Québec published, in draft form, two new regulations describing the terms of the new monetary administrative penalties (“MAP”) regime, and increasing fines with the objective of promoting compliance with the rules set out in the Consumer Protection Act (the “CPA”) and the Regulation respecting the application of the Consumer Protection Act (the “Regulation”). The new proposed regulations are the Regulation to amend the Regulation respecting the application of the Consumer Protection Act (the “Regulation to amend the Regulation”) and the Regulation respecting monetary administrative penalties with respect to the Consumer Protection Act (the “Regulation to amend the CPA”).

These draft regulations are introduced by An Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods, previously known as Bill 29 (“Bill 29”), passed on October, 2023, which contains several important amendments to the CPA that manufacturers and merchants operating in Québec should be aware of^[2]. In particular, Bill 29 sought to add a chapter to the CPA to provide a new penalty mechanism (MAPs), to penalize “objectively observable” failures to comply with the CPA, the Regulation or a voluntary undertaking. Bill 29^[3] provided the government of Québec with the power to set out the conditions for applying such MAPs and to determine the amount or the method of calculation thereof, without, however, exceeding $1,750 in the case of an individual or $3,500 in any other case (legal person). The Regulation to amend the Regulation and the Regulation to amend the CPA (the “New Regulations”) seek to clarify these rules.

As a result, it will be important for merchants to be aware of the new MAPs and the substantial fines that merchants may face if they violate certain provisions of the CPA and its Regulation.

New Monetary Administrative Penalties

In addition to civil remedies available to consumers for non-compliance with the obligations set out in the CPA or its Regulation, the public body responsible for enforcing them, namely the Office de la protection du consommateur (“OPC”), will now be able to impose a new type of penalty—the monetary administrative penalties.

MAPs are a penalty regime with a broader scope than the fines already provided for in the CPA and Regulation. The penalty regime allows the OPC to recommend penal proceedings that may or may not be instituted by the Director of Criminal and Penal Prosecutions before the Court of Québec. The new MAP regime, which will complement the existing penalty regime, will allow the OPC’s president to impose a monetary penalty without having to go through the Director of Criminal and Penal Prosecutions. Accordingly, this regime will provide an additional tool for the OPC to enforce the CPA and its regulation.

The New Regulations will set out the objectively observable failures to comply with a provision of the Regulation, the CPA or a voluntary undertaking that may give rise to the imposition of a monetary administrative penalty, as well as the amount of each penalty. Specifically, MAPs cannot exceed $1,750 in the case of an individual, or $3,500 for a legal person^[4], for each day that the non-compliance continues^[5].

Penalties may be imposed according to the following steps:

• Before a MAP is imposed, a merchant may receive a notice of non-compliance urging them to remedy the failure and giving them the opportunity to present observations and, where applicable, to produce documents to complete their record while specifying the time limit within which this may be done^[6].
• If no correction is made, a MAP may then be imposed by notification of a claim. The notification must state^[7]:

a) the amount claimed and the due date for payment;
b) the reasons why it is claimed;
c) the time from which it bears interest;
d) the right to contest the imposition of the penalty before the Administrative Tribunal of Québec and the time limit for bringing such a proceeding.

• If the target company fails to pay the full amount owing or to comply with the agreement entered into for that purpose, the OPC’s president may file a decision “at the office of the competent court”^[8]. This decision will then become enforceable, as if it were a final judgment of that court and not subject to appeal.

The payment of a monetary administrative penalty will also be automatically secured by a legal hypothec on the movable and immovable property of the party responsible for the failure to comply and, where applicable, each of the “debtor’s” directors and officers who are solidarily liable with the debtor for payment of the penalty^[9].

Increased Fines

> Although the CPA already included penal provisions providing for fines, Bill 29 considerably increases the amount of the fines. In particular, maximum fines for certain offences have been raised to $125,000 or, if a legal person, 5% of the worldwide turnover for the preceding fiscal year. Evidently, this latter possibility is a significant change that could result in very substantial fines for large multinational corporations. A table listing the provisions of the CPA that are subject to the maximum fines introduced by Bill 29 can be found in appendix 1 of this bulletin.

It should also be noted that in the case of an offence by a legal person, its directors, officers and mandataries will be presumed to have committed the offence unless they establish that they exercised due diligence to prevent the commission of the offence^[10].

The Regulation to amend the Regulation specifies out the amounts of the fines that merchants are liable to pay if they fail to comply with certain provisions of the Regulation. It is worth noting that all minimum and maximum amounts of such fines are doubled for subsequent offences^[11].

Conclusion

The two draft regulations should be adopted within 45 days of its publication, although certain amendments may be made based on comments that the government of Québec may receive during this period. With certain exceptions, the new rules introduced under these new regulations will come into force on January 5, 2025.

It is possible to anticipate that the adoption of the new MAP regime and the fine increases, including the possibility of imposing a penalty equal to 5% of the company’s worldwide turnover for the preceding fiscal year for certain offences, could lead to more frequent enforcement of the provisions of the CPA and its Regulation by the OPC.

We will be keeping a close eye on how these new provisions are introduced, how they will be interpreted and whether they prove effective.

Don’t hesitate to contact the authors if you have any questions or require assistance in this regard.

[1] The authors wish to thank articling student Nikie Boillat-Proulx for her help with this bulletin.
[2]For more information on this topic, please consult our bulletin entitled "Done Deal: Quebec Adopts Sweeping Legislation Against Planned Obsolescence and for the Right to Repair Consumer Goods".
[3] Section 276.1, para 2 CPA.
[4] Ibid.
[5] Section 276.2 CPA.
[6] Section 276.3 CPA.
[7]Section 276.6 CPA.
[8] Section 276.10 CPA.
[9] Section 276.9 CPA.
[10]Section 282.1 CPA.
[11] Section 281 CPA.

Appendix 1 - Offences Under the CPA Subject to Maximum Fines Corresponding to 5% of the Worldwide Turnover for the Preceding Fiscal Year