[co-author: Julia Mogus - Articling Student]
Introduction
The Québec government recently adopted Bill 29, an Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods (the Act), which introduces several substantive amendments to Québec's Consumer Protection Act (CPA). The Act was assented to and came into force1 on October 5, 2023. These amendments impose significant new obligations on merchants and manufacturers.
Québec becomes the first Canadian province to enact "right to repair" legislation, with a particular focus on the automotive industry. The Act also introduces a new legal warranty of "good working order" for certain commonly used new goods, and a ban on the sale and manufacturing of goods for which obsolescence is planned.
Overview of the Newly Enacted Amendments
The key requirements of the Act are the following:
A. New Warranties Added to the CPA
(i) Good Working Order Warranty
The Act introduces a new legal warranty of good working order for certain goods that are commonly used (Good Working Order Warranty).2 The Good Working Order Warranty does not replace the CPA's existing legal warranty of quality, which applies to goods sold to consumers and ensures that they are fit for the purposes for which goods of that kind are ordinarily used and are durable in normal use for a reasonable length of time (CPA Legal Warranty),3 or the similar warranty of quality provided for in the Civil Code of Quebec.4
The Good Working Order Warranty rather provides a specific warranty duration for certain goods that are either sold to consumers, or that are the object of a long-term lease, including: household appliances (refrigerators, ranges, freezers, dishwashers, washing machines, dryers, air conditioners and heat pumps), technological appliances (television sets, desktop and laptop computers, tablets, cellphones and video game consoles) and any other goods that may be determined by regulation. The duration of the Good Working Order Warranty for each of these goods has not yet been set and will be determined by regulation.5
The Good Working Order Warranty provides consumers the right to have these goods repaired by the merchant or manufacturer at the merchant or manufacturer's cost, or have the repairs carried out by a third person and have the merchant or manufacturer assume repair costs.6 It is worth noting that a conventional warranty (i.e. a supplemental warranty offered by a merchant or manufacturer) cannot replace or limit the Good Working Order Warranty or the CPA Legal Warranty. It is rather intended to be complementary to these legal warranties.
The Good Working Order Warranty covers parts and labour, but does not cover (1) normal maintenance service and the replacement of parts resulting from it, (2) damage resulting from abuse by the consumer or (3) any accessory (apart from accessories that may be determined by regulation).7 In the case of repairs, the Good Working Order Warranty covers the reasonable transportation or shipping costs incurred in respect of the performance of the Warranty.8
Much like the CPA Legal Warranty, the Good Working Order Warranty follows the good, not the consumer. Therefore, any subsequent purchaser of the good will also benefit from the Good Working Order Warranty's protection until its duration from the initial sale has expired.9
Finally, the Act includes disclosure and information requirements on the goods covered by the Good Working Order Warranty including, but not limited to the obligation for a merchant to indicate the duration of the Good Working Order Warranty near the advertised price of the good (or near its retail value in the case of long-term lease) in a prominent manner.10 The violation of these obligations will give rise to important fines, as discussed below.
(ii) Replacement Parts and Right to Repair
Section 39 CPA already imposes upon merchants and manufacturers the obligation of making replacement parts and repair services available for a reasonable period time after the contract is entered into. This warranty, however, only applies to goods that require maintenance, replacement parts and repair services. Merchants and manufacturers that warn consumers in writing before entering into a contract that they do not supply replacement parts or repair service may be released from this warranty.
Going forward, this warranty will also apply to goods that require the replacement, cleaning or updating of one of their components. In addition, the government may limit, by regulation, the possibility for a merchant or manufacturer to be released from this warranty with respect to specific replacement parts and information necessary to maintain or repair goods.
The new section 39 CPA requires merchants and manufacturers to make available, for a reasonable period time after the contract is entered into, information necessary to maintain and repair goods (including, where applicable, any diagnostic software and its updates). This information must be available in French and be provided to the consumer before entering into the contract. Future regulation is expected to provide more clarity on the information that needs to be disclosed, as well as the manner in which it needs to be disclosed.11
The CPA will also require that (1) the replacement of parts, repair services or information required to perform the maintenance or repair be available at a reasonable price,12 (2) information be free of charge when it is accessible on a technological medium, (3) the tools used to facilitate the warranty be “commonly available”, and (4) the installation of replacement parts not cause irreversible damage to the goods. As it concerns automobile manufacturers more specifically, they will have to provide the owner or long-term lessee of a vehicle (or their mandatary) with access to the automobile’s data in legible format free of charge.13
In situations where a merchant or a manufacturer fails to make available the replacement parts, repair services or information necessary to repair goods, a consumer may request that the merchant or the manufacturer repair the goods. In such cases, within 10 days of the consumer’s request, the merchant or the manufacturer will have to advise the consumer in writing of the time within which they propose to carry out the repairs. A merchant or manufacturer will be required to cover the costs of a third-party repairer at the consumer’s request, so long as the cost is considered reasonable. If a merchant or a manufacturer fails to provide a response in accordance with the aforementioned conditions, the merchant or the manufacturer must replace the consumer’s goods by new or reconditioned goods with equivalent functionalities, or reimburse the full purchase prise of the good.14
B. Other Requirements
(i) Specific Requirements for the Automotive Industry
New "Lemon Law" for Seriously Defective Vehicles
Automobile owners and long-term lessees can now request a court to declare a vehicle “seriously defective”, where:
(a) the vehicle was subject to attempts to repair one or more defects affecting the automobile under the automobile’s basic conventional warranty given gratuitously by the manufacturer, namely:
- Three unsuccessful repair attempts for the same issue;
- One or two unsuccessful repair attempts where the merchant or the manufacturer responsible for performing the warranty has had the automobile in its possession for over 30 days; or
- Twelve repair attempts for unrelated issues;
(b) the defects have appeared within three years of the first sale or long-term lease of the automobile to a party other than a merchant authorized by the manufacturer to distribute the automobile where the automobile has not covered more than 60,000 kilometres; and
(c) the defects render the automobile unfit for the purposes for which it is ordinarily intended or substantially diminish its usefulness.15 Once an automobile has been declared "seriously defective", no person may advertise the vehicle without disclosing that fact.16
Long-Term Lease Contracts
With respect to long-term contracts of lease of automobiles, at least 90 days before the end of customer leases, merchants will have to propose an automobile inspection free of charge before the end of the lease. Merchants will be limited in claiming charges for the abnormal wear of goods in certain situations, including if the merchant failed to offer the consumer to conduct an inspection.17
(ii) Planned Obsolescence Prohibited
The CPA prohibits any person, by any means, from carrying on the business of trading in goods for which obsolescence is planned.18 The government has extended the statute of limitations to five years for penal proceedings resulting from a violation of this prohibition.19 The government will also have the power to determine, by regulation, the technical or manufacturing standards for goods, including standards for interoperability between goods and chargers.20
(iii) Mandatory 10-day "Cooling-Off Period" for Additional Warranties
Merchants may offer consumers additional warranties on goods that are the object of the Good Working Order Warranty, so long as they respect certain requirements: they must advise customers of the existence and duration of the Good Working Order Warranty,21 and inform them that they have ten days to cancel the contract for any such additional warranty. In certain situations, including some which relate to motor vehicles, consumers may have one year to cancel the purchase of additional warranties.22
(iv) Restrictions on Charging Fees Included in Long-Term Leases
Under contracts for a long-term lease, the Act prohibits merchants from claiming:
(a) Charges on the ground that the nature or quality of a part or component installed as part of the normal maintenance service does not satisfy the merchant, unless the contract expressly provides that the goods may only be returned with a component of a specific nature or quality; or
(b) Charges on the ground that the part is not an original part from the manufacturer or that the maintenance service was not performed by the manufacturer or a merchant approved by the manufacturer.23
C. Non-Compliance Risks: Administrative and Penal Fines Increased
The president of the Office de la protection du consommateur, Quebec's consumer protection bureau, can impose monetary administrative penalties for non-compliance with the CPA. The conditions, amounts and methods for calculating the monetary administrative penalties may be specified by regulation, but will not exceed $3,500 in the case of non-natural persons.24 These administrative penalties should be taken seriously and can become quite substantial, considering that a monetary administrative penalty can be imposed for each day the failure to comply continues.25
The penal provisions of the CPA have also been amended and fines have been increased. For some contraventions to the CPA, including regarding the obligations for merchants and manufacturers to make available replacement parts and repair services, all non-natural persons will be subject to a fine of $3,000 to $75,000.26
For other contraventions, fines for non-natural persons can range from $5,000 to $125,000 or an amount equal to five percent of worldwide turnover for the proceeding fiscal year, whichever is greater.27 The prohibited practices subject to these potentially significant fines include failure to disclose information to consumers required by the Good Working Order Warranty,28 selling a product for which obsolescence is planned,29 advertising an automobile that has been declared seriously defective without disclosing this fact30 and charging restricted fees in long-term leases.31
For other types of offences, such as giving false or misleading information to the Minister of Justice or the President of the Office de la protection du consommateur, non-natural persons can be fined up to $175,000.32
Finally, for a contravention of a provision of the CPA for which a specific fine has not been determined, a non-natural person may be subject to a fine of $1,200 to $30,000.
All minimum and maximum fines are doubled for repeat offenders.33
If a person commits an offence under the CPA or one of its regulations, any of the person’s directors, officers, mandataries, representatives or ultimate beneficiaries is presumed to have committed the offence unless it is established that they exercised due diligence, taking all necessary precautions to prevent the offence or, in the case of an ultimate beneficiary, it is established that the beneficiary does not have any influence enabling it to have control in fact of the person.34
These fines and monetary administrative penalties are in addition to civil remedies available to consumers.
What to Expect Moving Forward
Some of the changes described above have been in force since October 5, 2023, including: the provision prohibiting the sale of goods for which obsolescence is planned,35 the restrictions on charging fees included in long-term lease contracts and the "lemon law" for seriously defective vehicles.
The majority of the other requirements imposed on manufacturers and merchants will come into force on a rolling basis, from six months to three years after the date of assent of the Act (i.e. October 5, 2023). For instance, the obligation of merchants to propose an inspection free of charge to consumers with long-term lease contracts of automobiles will come into force on April 5, 2024. The warranty of availability of replacement parts, repair services and information to repair goods will come into force on October 5, 2025. The Good Working Order Warranty will come into force on October 5, 2026.36
Businesses that are impacted by these changes will need to monitor their obligations, some of which will be refined in future regulations. Businesses may want to start reviewing their sale/lease contracts, warranties, repair or maintenance documentation and information destined to Québec consumers sooner rather than later in order to assess the types of changes that will need to be implemented to comply with the new CPA requirements and avoid facing administrative monetary penalties and penal fines.
1 Save for certain exceptions.
4 Section 1726 of the Civil Code of Quebec provides that: " The seller is bound to warrant the buyer that the property and its accessories are, at the time of the sale, free of latent defects which render it unfit for the use for which it was intended or which so diminish its usefulness that the buyer would not have bought it or paid so high a price if he had been aware of them. The seller is not bound, however, to warrant against any latent defect known to the buyer or any apparent defect; an apparent defect is a defect that can be perceived by a prudent and diligent buyer without the need to resort to an expert."
12 A price is considered being "reasonable" if it does not discourage the consumer or his mandatary from accessing it. The government may determine by regulation the cases in which a price is presumed to discourage the consumer from accessing it (CPA, s.39.3).
18 Planned obsolescence is defined as a technique aimed at reducing a good's normal operating life (CPA, s. 227.0.4).
22 CPA, s. 228.3. Note that this provision does not apply to a contract for which the underwrite is an insurer authorized under the Insurers Act (Chapter A-32.1).
24 CPA, s. 276.1. $1,750 in the case of a natural persons.
26 CPA, s. 277. Natural person will be liable to a fine of $1,500 to $37,500.
27 CPA, s. 278. Natural persons can be of $2,500 to $62,500.
28 CPA, ss. 227.0.1-227.0.2.
35 We note that the fines associated to a contravention to this prohibition will come into force 15 months after the date of the assent (i.e. on January 5, 2024).
