Canada: Planned Obsolescence: The Government Of Québec Takes Action And Improves The Consumer Protection ‎Act

On October 5, 2023, An Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods("Bill 29"), was adopted by the government of Québec, thereby modifying the Consumer Protection Act("CPA").

Bill 29 aims to protect Québec consumers against planned obsolescence, and thus offers them better protection when acquiring and while using domestic goods. Necessarily, the question of planned obsolescence must first be delineated. Some define this notion as the deliberate shortening of a product's life span in order to accelerate its renewal. Others conceptualize it as a polluting strategy, which harms the environment and incurs increased consumer-based cost. Bill 29 defines the concept of planned obsolescence as including all techniques aimed at reducing the normal operating life of a good and prohibits anyone from manufacturing goods for which obsolescence is planned, or offering such goods to consumers via sale or lease. Additionally, Bill 29 introduces specific new measures and obligations to promote the durability, repairability and maintenance of the goods.

This article explores the measures and obligations considered to be the most relevant changes and additions to the CPA on this subject.

Right todurability

Bill 29 specifically introduces to the CPA a legal warranty of good working order for certain new goods. Among the express legal enumeration of products covered in the law, we find the following goods:

This warranty takes effect upon the delivery of the good and includes parts and labor. In order to honor this warranty, the merchant or the manufacturer must assume either the cost of repair, which includes shipping and handling, or the cost of repair by a third party. This warranty does not cover normal product maintenance.

The duration of the warranty of good working order for these goods has yet to be determined. Once it is set, the duration will have to be prominently displayed by the merchant, in close proximity of the advertised sale price (or to its retail value, in the case of long-term leasing contract).

In addition, merchants will have to inform consumers of the existence and duration of the legal warranty, prior to proposing the purchase of any additional warranty contracts. Merchants will also have to specify to the consumer that they may cancel the contract, without cost or penalty, within ten days of entering into it (a period that may be extended up to one year in certain cases).

The new provisions relating to this warranty of good working order (and its related fines) will come into force on October 5, 2026. This provides the legislature with approximately three years to add to the list of goods covered by the warranty, or to add any accessory to the list as it may see fit; to establish the duration of this warranty for each of the goods covered; and, to lay down the framework for how information relating to this warranty must be disclosed by merchants and manufacturers (before and after the sale contract or long-term leasing contract of goods).

Right to repairability

Bill 29 enhances the legal warranty of availability of replacement parts and repair services for goods requiring maintenance, and of information necessary for the maintenance or repair of these goods (in French), at a reasonable price and for a reasonable period of time following the contract of sale or lease. To that end, Bill 29 specifies that when this information is electronically available on a technological medium, it must be provided free of charge, and that the information in question includes diagnostic software and its updates.

In the event of failure to make the replacement parts, the repair services or the necessary information for repair available (during the period prescribed by regulation), the merchant or the manufacturer shall repair the good, or failing that, either pay the reasonable costs of third party repair, replace the good, or reimburse the consumer.

Unless otherwise provided for in the regulations, it should be noted that merchants or manufacturers can dispense themselves from this obligation in writing, prior to the conclusion of the sale or long-term leasing contract of goods, by specifying that they do not supply replacement parts, repair services or the information necessary for the maintenance or repair of the good.

The length of time during which these parts and information must be available, the time within which the merchant or manufacturer must provide them, and what constitutes an "unreasonable price" under the CPA, may be determined by regulation. It should be noted that information relating to this warranty will have to be disclosed by the merchant and manufacturer in the manner prescribed by the regulation.

The provisions relating to legal warranty of availability will come into force on October 5, 2025.

New requirements pertaining to automobiles

Bill 29 also imposes new obligations on merchants and manufacturers who sell or lease automobiles to Québec consumers:

• Bill 29 allows the courts to declare (at the consumer's request) an automobile to be a "seriously defective automobile", particularly in cases where the defects render it unfit for its intended use, despite a number of unsuccessful repair attempts. In such cases, the automobile's "seriously defective" status must be disclosed when it is resold or advertised (provisions already in force).
• In long-term leasing contracts for automobiles (or for any other goods for that matter), the merchant is now prohibited from including provisions pursuant to which it requires certain fees relating to the origin, nature or quality of a part / component installed as part of normal maintenance service, except in certain cases (provision already in effect, but not applicable to contracts concluded prior to October 5, 2023).
• Bill 29 specifies that the merchant must propose a free inspection of the automobile prior to the end of the lease in order to identify any parts / components of the good that, according to the merchant, present abnormal wear. The merchant must indicate the consumer's right to repair the parts / components. Failing that, the merchant may have them repaired at the consumer's expense, except in certain cases (applicable to contracts entered into on or after April 5, 2024). This obligation may apply to other long-term leased goods, which will be determined by regulation.
• Automobile manufacturers will have to provide access to automobile data in a readable format to the owner, long-term lessee or their mandatory for diagnostic, maintenance or repair purposes (coming into force: October 5, 2025).
• Prior to offering the purchase of an additional warranty contract for a used automobile or motorcycle, the merchant must first inform the consumer of the warranty of good working order and its duration in the manner prescribed by regulation, and must specify that the consumer may cancel the contract without cost or penalty within ten days of entering into it (a period that may be extended up to one year in certain cases) (coming into force: October 5, 2026).

Increased penal fines and monetary administrative penalties

Bill 29 increases the amount of penal fines for breaches of the CPA's provisions and of the regulations pertaining to its application, and foresees the possibility of imposing new monetary administrative penalties. The new penal fines, which can total an amount equal to five percent of the sanctioned entity's worldwide turnover for the preceding fiscal year, will gradually come into force in 2025 and in 2026, depending on the infraction. Similarly, the new administrative monetary penalties will come into force in January 2025.

Finally, it should be highlighted that Bill 29 provides that the directors, officers or representatives of an entity that has committed an offence under the CPA are presumed to have themselves committed said offence, unless they can prove that they exercised due diligence in attempting to prevent same.

Conclusion

Although certain Bill 29 provisions are not yet in effect, we advise merchants and manufacturers who sell (or lease) goods in Québec to immediately familiarize themselves with the changes and modifications to the CPA, in order to be ready for their implementation. Such adjustments will require time, energy and often additional financial resources, and can affect several aspects of your commercial activities. Consequently, effective planning is likely necessary for a successful transition.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.