New monetary administrative penalties and increased fines related to Quebec’s Consumer Protection Act coming into effect in the new year

In the fall of 2023, An Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods (“Bill 29”) came into effect, aiming to protect Quebec consumers from planned obsolescence and provide them with better protection when acquiring or using household goods. For more details on Bill 29, please refer to our previous article on the subject.

Among the measures enacted by Bill 29, we note the increase in fines for non-compliance with the provisions of the Quebec Consumer Protection Act (the “CPA”) and its regulations. Bill 29 also introduces a new regime of monetary administrative penalties, which can now be imposed for an “objectively observable” failure to comply with the CPA, its regulations or to a voluntary undertaking.

In order to give effect to these measures, two regulations have been enacted on December 11, 2024, by the Quebec government, namely:

• The Regulation respecting monetary administrative penalties with respect to the Consumer Protection Act; and
• The Regulation to amend the Regulation respecting the application of the Consumer Protection Act.

New regime: Monetary administrative penalties

One of the innovative measures introduced by Bill 29 is the creation of a regime of monetary administrative penalties designed by the Quebec legislator to be more flexible and easier to manage than the traditional penal sanctions system. Depending on the severity of the non-compliance, penalties can be of up to $1,750 for individuals and up to $3,500 in other cases, including for corporations. Theses penalties can be imposed daily for as long as the non-compliance continues. It should be noted that directors and officers of a corporation can be held solidarily liable alongside the corporation for the payment of the imposed penalty, unless they establish that they exercised due diligence to prevent the non-compliance.

This new regime allows the Office de la protection du consommateur (“OPC”) to directly intervene in cases of failure to comply with the CPA or its regulations, specifically by urging the non-compliant party to immediately take measures to correct the non-compliance. In case of refusal, the OPC will be able to impose monetary administrative penalties to encourage a change in behavior. For example, these penalties may be imposed by the OPC in cases where merchants, manufacturers, or advertisers give themselves the right to:

• pre-emptively exempt themselves in the contract from the consequences of their own actions or those of their representatives;
• unilaterally decide that the consumer has failed to satisfy any of their obligations;
• require the consumer to submit any potential dispute to arbitration or to restrict the consumer’s right to take legal action;
• subject the governance of the consumer contract to a law other than those of Quebec or Canada;
• impose costs not set out in the contract;
• foresee a penalty in the contract for non-performance by the consumer of their obligation (unless an exception applies);
• draft the contract (and related documents) in a language other than French or require the consumer to pay for the drafting of the French version of a contract (and related documents);
• make false or misleading representations to a consumer; or
• charge a price for a good or service higher than what is advertised.

It should be noted that this list is not exhaustive.

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. Those related to the Regulation respecting the application of the Consumer Protection Act will come into effect on January 5, 2025.

Increased penal fines

Bill 29 had already outlined increased fines for failure to comply with the CPA, which can reach up to $87,500 for an individual and an amount of up to five percent of worldwide turnover for the preceding fiscal year for corporations.

Increased fines for non-compliance with the Regulation respecting the application of the Consumer Protection Act are now established and can reach up to $62,500 for an individual and $175,000 for corporations. These fines are imposed on a daily basis for as long as the non-compliance persists, meaning that a corporation in prolonged violation could quickly face substantial cumulative fines. It is also worth noting that, in cases of repeat offenses, fines are doubled for any subsequent violation. Furthermore, if the offense is committed by a corporation, its directors, officers or agents are presumed to have committed the offense unless they can demonstrate that they took all reasonable precautions and exercised due diligence to prevent the offense.

That said, courts are not required to systematically impose the maximum fines. The legislator has provided several criteria to guide the courts in determining the appropriate fine amount, including the size of the company, its financial resources, its market share, its ability to prevent the offense or mitigate its consequences, the number of consumers affected, the damage caused to consumers, as well as the prior behavior of the offender in relation to the CPA.

The fines 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. Those related to the Regulation respecting the application of the Consumer Protection Act will come into effect on January 5, 2025.

Conclusion

Given that the new monetary administrative penalties and increased penal fines will soon come into effect, we recommend that merchants and manufacturers selling or leasing goods in Quebec take the necessary steps to ensure that their practices comply with the CPA and its regulations.

Should you have any questions about the applicability of these regulations, or about your obligations as a merchant or manufacturer, please do not hesitate to contact us.