Canada: Public Contracts: Overpayments Targeted By The Government (Again)

On December 3, the Government of Quebec tabled Bill 26, An Act to ensure mainly the recovery of amounts obtained as a result of fraud or fraudulent tactics in connection with public contracts (the Bill). A similar bill had been tabled on November 13, 2013, under the previous government, but there was no effective follow-up. The current Bill applies to all public contracts, whereas the previous bill applied only to public contracts in the construction industry.

Among other things, the Bill proposes an amendment to the Act respecting contracting by public bodies (the Act) to allow the Autorité des marchés financiers (AMF) to exercise its discretionary power with respect to enterprises found guilty of offences listed in the Act that wish to be able to obtain or preserve an authorization to enter into a contract/subcontract with public bodies.

Recovery of amounts improperly paid

To facilitate the recovery of amounts improperly paid by a public body as a result of fraud or fraudulent tactics in the course of the tendering, awarding or management of a public contract, the government is proposing various measures, including:

  • Creation of a presumption of injury and a presumption of the value of such injury. Upon proof that an enterprise has committed fraud or engaged in a fraudulent tactic in the above circumstances, the enterprise will be presumed to have caused injury to the public body concerned. The injury is presumed to correspond to the amount claimed by the public body if the amount does not exceed 15% of the total amount paid for the contract concerned. Since the existence and the value of an injury are "presumed" rather than "deemed," it seems that the lawmakers wish to give the enterprises an opportunity to try to demonstrate the absence of injury or the value of the injury is less than 15%.
  • Solidary liability of officers and directors. The Bill provides that the officers of the enterprise in office at the time the fraud or fraudulent tactics occurred will be held liable unless they prove that they acted with the care, diligence and skill that a prudent person would have exercised in similar circumstances. The same holds for the directors of the enterprise if it is established that they knew or ought to have known that fraud or fraudulent tactics were committed in relation to the contract concerned. The officers and directors will be solidarily liable with the enterprise.
  • Prescription period extended and past public contracts brought within the scope of the Bill. Under the Bill, an action to recover improperly paid amounts may be brought by a public body for injuries caused up to 20 years before the coming into force of these new provisions, provided the action is brought within five years of the coming into force of the new provisions. Moreover, actions that, before the date of coming into force of the new provisions, were dismissed on the grounds that the right was prescribed may be instituted again within five years after that date.
  • Registration of a legal hypothec on the property of the enterprise and the officers and directors concerned. A public body may, in an action brought under the new provisions, register a legal hypothec on the property of any enterprise or of its officers or directors, on the authorization of a judge. Such authorization may be granted if the public body's claim appears to be well-founded and if there is reason to fear that recovery of the claim might be jeopardized without such authorization.

Voluntary reimbursement program

The government will establish a reimbursement program so that any enterprise or any of its officers or directors may reimburse the amounts obtained from a public body in the previously described circumstances. A discharge may then be obtained regarding the contracts concerned. The program will be of a limited duration. If a transaction is entered into under the reimbursement program, the names of the parties to the transaction, the reimbursement amount and the period concerned will be made public.

The details of this reimbursement program have yet to be announced. The Bill states that this reimbursement program will be published as a draft program in the Gazette officielle du Québec so that any interested person may comment on it within the time period prescribed for such purpose.

AMF's discretionary regime strengthened

We bring to your attention that, under the Act respecting contracting by public bodies, enterprises wishing to enter into a contract/subcontract with a public body must first obtain an authorization for such purpose from the AMF in the circumstances set out in that Act. For more information on this topic, we refer you to our previous Legal update, with the reminder that the monetary threshold currently in effect is $5 million.

Furthermore, in its current form, the Act respecting contracting by public bodies requires the AMF to refuse to grant or renew or to revoke an authorization if the enterprise concerned has, in the preceding five years, been found guilty of an offence listed in Schedule I of the Act or if it has, in the preceding five years, been found guilty by a foreign court of an offence which, if committed in Canada, could have resulted in criminal or penal proceedings for an offence listed in Schedule I of such Act. While such convictions will continue to be considered by the AMF before granting, renewing or revoking an authorization, the AMF will now have discretionary power in this area. This appears to be a major change that will provide the enterprises concerned with the opportunity to try to convince the AMF that they are still meeting the high standards of integrity the public is entitled to expect from enterprises wishing to enter into public contracts/subcontracts.


Given that the previous Quebec government had tabled a similar bill and the current government is taking up the issue again with this Bill, it is expected that these provisions will be passed shortly.

The provisions could provide an incentive to the enterprises concerned to take advantage of the reimbursement program in order to prevent a situation where their officers and directors may be held personally liable.

Moreover, while there may now be hope for enterprises found guilty of offences listed in Schedule I of the Act respecting contracting with public bodies that they will nevertheless be able to obtain or preserve their authorizations, they will still have to implement the measures needed to satisfy the high standards for integrity. More than ever, it is in the interests of enterprises to adopt and comply with ethics and governance rules—for example, by adopting a code of ethics and professional conduct—in order to remain ethically above reproach.

Norton Rose Fulbright Canada LLP

Norton Rose Fulbright is a global legal practice. We provide the world's pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers based in over 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

Norton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members ('the Norton Rose Fulbright members') of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions