Canada: New Amendments To Consumer Credit Provisions Of Québec's Consumer Protection Act

Co-authored by Stéphanie Gascon

On May 2, 2017, the Minister of Justice, Stéphanie Vallée, introduced Bill 134, known as an Act mainly to modernize rules relating to consumer credit and to regulate debt settlement service contracts, high-cost credit contracts and loyalty programs1 (hereinafter the "Bill"). The main objective of the Bill is to modernize the Consumer Protection Act (Québec) (hereinafter the "CPA") and introduces new rules and obligations for merchants in the field of consumer credit. The major changes to the CPA for credit agreements are as follows.

Credit rate

The Bill amends the calculation of credit rates for credit contracts by adding components that must not be taken into account for the purpose of calculating the credit rate, such as the premium for insurance, the registration fees in a public register of rights, the membership fee for an open credit contract, expenses and professional fees, as well as the fees paid for access to public registers of rights in a credit contract secured by an immovable hypothec.2

Assessment of consumer's capacity to repay credit

The Bill adds an obligation to assess the consumer's capacity to pay. In fact, before entering into a credit contract or granting a credit limit increase in an open credit contract, a merchant will have an obligation to assess the consumer's capacity to repay the credit requested.3 A merchant, who fails to carry out this assessment, loses the right to credit charges. In this event, the merchant must refund any credit charges already paid by the consumer.4

The criteria that must be taken into account will be defined and clarified by a regulation from the government. The Bill also provides that some federally regulated financial institutions are deemed to comply with the obligation to assess the consumer's capacity to repay credit.

High-cost credit contract

The Bill introduces the new concept of a "high cost credit contract", which is not defined in the Bill but whose characteristics will be determined by regulation at a later date.5 This Bill creates binding conditions for the merchant. Before concluding such a contract with a consumer, the merchant must give the consumer a written copy of the documents containing the assessment carried out showing the consumer's capacity to repay and the information on the consumer's debt ratio, which is the expression of the consumer's liability in the form of a percentage calculated in the manner prescribed by regulation.6 If the merchant fails to comply with this requirement, the merchant is deemed not to have made the previously required assessment.7 Furthermore, a consumer, who enters into such a contract while his or her debt ratio exceeds the ratio identified by regulation, is presumed to have incurred an excessive, harsh or unconscionable obligation, which could lead to a demand in nullity of the contract or a reduction of the obligations thereunder (Section 8 CPA).8 The Bill adds that "a high-cost credit contract" can be cancelled on the same conditions as those found above, within 10 days following that on which each of the parties is in possession of a duplicate of the contract.9

Changes relating to open credit contracts, contracts for the loan of money and instalment sale contracts

The Bill clarifies the concept of "open credit contract" by adding credit card contracts, contracts for the use of lines of credit, credit accounts, budget accounts, revolving credit accounts, credit openings and any other contract of the same nature.10 The Bill adds various formalities to be contained in open credit contracts, such as: the agreed upon credit limit, the credit rate, the nature of the credit charges and how they are determined, the grace period given to the consumer to pay outstanding amounts without having to pay credit charges, the terms of the change in the credit rate, the minimum periodic payment and the period for which a statement of account is provided. The contract is also subject to other formalities foreseen by regulations. The credit application form is subject to formalities of the same nature.11

The contract of the loan of money will now contain the information required by regulation, as well as information such as net capital, the amount and date of any advance made or to be made, credit charges, the term of the contract, the credit rate (including whether it is variable) and the amount and frequency of payments. In addition, a sale of goods with the right of redemption by a consumer to a merchant is deemed to be a loan of money if the amount that the consumer must pay to redeem the goods is greater than the amount paid by the merchant to acquire the goods.12 A sale of goods by a consumer to a merchant that acquires the goods with the purpose to rent the goods to the consumer for a greater amount than the one paid to acquire the goods is deemed to be a loan of money.13

An instalment sale contract must contain or state certain prescribed information required by the Bill, such as the description of the goods that are subject to the matter of the contract, the cash sale price of the goods, the value of any goods given in exchange, the credit charges claimed from the consumer, the term of the contract, the amount and due date of each payment, and the conditions of the contract if the credit rate is a variable rate.14

Requirements for the statement of account

At the end of each billing period, the merchant shall immediately provide the consumer with a statement indicating in particular: the period covered by the statement of account, the outstanding balance at the beginning of the period, a sufficient description including the date and the amount of each transaction, the outstanding balance at the end of the period, the minimal payment required for the period and the applicable credit limit for the period.15 On the other hand, the merchant is not required to send a statement of account to the consumer at the end of any period if there have been no advances or payments during the period and the outstanding balance at the end of the period is zero.16

This statement of account may be transmitted to the consumer's technological address if the latter expressly authorizes it.17 The consumer has the right to withdraw this authorization at any time by notifying the merchant. In addition, the statement of account will be deemed to be sent to the consumer's technological address when all the following conditions are present: (1) the consumer has received at that address a notice to the effect that the statement of account is available on the merchant's website; (2) the statement of account is actually available on the website for the period determined by the regulation; and (3) the consumer is able to retain a copy of the statement of account.18

The credit card issuer must post on its website an up-to-date version of any credit card contract offered for the use of its consumers.19 The consumer may require the merchant to send him or her, without charge, a copy of the vouchers for each transaction in the account during the period covered by the statement. The merchant must send the copy of the vouchers requested within 60 days of the date where the consumer sends his or her request.20

Minimum payment

The Bill provides that the minimum payment required for credit card contracts for a period may not be less than 5% of the outstanding balance at the end of the period.21

Grace period

The Bill requires merchants to give the consumer a grace period of at least 21 days after the last day of the billing period covered by the statement of account to pay outstanding amounts without having to pay credit charges.22 This provision does not apply in the case of an advance of money for which the merchant may charge impose credit charges from the date of the advance of money until the date of payment.

Credit limit requirements

The Bill imposes certain requirements on merchants regarding the credit limit. For instance, the merchant may not increase the credit limit granted except on the express request of the consumer.23 Moreover, the merchant cannot increase the credit limit beyond the new limit requested by the consumer.

It is important to emphasize that exceeding the credit limit granted by the consumer as a result of a transaction does not constitute an express request.24 Also, an amount withheld on a credit card is not a transaction resulting in the credit limit being exceeded.25 Therefore, the merchant cannot allow the consumer to make a transaction that exceeds the credit limit granted unless all the following conditions are met: (1) the merchant sends the consumer a notice stating that the consumer made a transaction resulting in the credit limit granted being exceeded; (2) the merchant imposes no charges on the consumer for exceeding the credit limit; and (3) the merchant includes the portion of the amount of the transaction that exceeds the credit limit in the minimum payment required for the subsequent billing period.

Following the same principle, any unilateral increase of the credit limit by the merchant cannot be invoked against the consumer. The consumer is not required to pay the amounts charged to the account that exceed the credit limit granted before that increase.26 It is for this reason that the stipulation in an open credit contract whereby the merchant may unilaterally increase the credit limit is prohibited by this Bill.27

Prohibitions on misleading advertisements

Finally, the Bill adds provisions to protect consumers from misleading advertisements. In the future, a merchant will specifically be prohibited from making false or misleading representations to consumers in an advertisement that credit may improve their financial situation or solve their debt problems.28 In addition, a merchant may not by any means, falsely or misleadingly represent to consumers that credit reports prepared about them will be improved.29

Entry into force

The scope and implementation of these new provisions of the CPA will be subsequently completed by regulations.

Finally, the entry into force of the Bill is not yet determined. The likelihood that the Bill will be passed before the end of the parliamentary session, around June 16, 2017, is relatively thin. It is more likely that the Bill will be passed in the fall of 2017, at the earliest. Furthermore, the date of entry into force of the new provisions should be later than the adoption of the Bill.


1 Act mainly to modernize rules relating to consumer credit and to regulate debt settlement service contracts, high-cost credit contracts and loyalty programs, Bill n° 134 (adopted), 1st sess., 41st legis. (Qc)

2 Section 12 of the Bill (Section 72.1 of the CPA).

3 Section 19 of the Bill (Section 103.2 of the CPA).

4 Section 19 of the Bill (Section 103.3 of the CPA).

5 Section 19 of the Bill (Section 103.4 of the CPA).

6 Section 19 of the Bill (Section 103.4 of the CPA).

7 Section 19 of the Bill (Section 103.4 of the CPA).

8 Section 19 of the Bill (Section 103.5 of the CPA).

9 Section 13 of the Bill (Section 73 of the CPA).

10 Section 25 of the Bill (Section 118 of the CPA).

11 Section 27 of the Bill (Section 119.1 of the CPA).

12 Section 23 of the Bill (Section 115.1 of the CPA).

13 Section 23 of the Bill (Section 115.1 of the CPA).

14 Section 35 of the Bill (Section 134 of the CPA).

15 Section 31 of the Bill (Section 126 of the CPA).

16 Section 31 of the Bill (Section 126.2 of the CPA).

17 Section 32 of the Bill (Section 127 of the CPA).

18 Section 32 of the Bill (Section 127 of the CPA).

19 Section 30 of the Bill (Section 125.2 of the CPA).

20 Section 31 of the Bill (Section 126.3 of the CPA).

21 Section 31 of the Bill (Section 126.1 of the CPA).

22 Section 33 of the Bill (Section 127.1 of the CPA).

23 Section 34 of the Bill (Section 128 of the CPA).

24 Section 34 of the Bill (Section 128 of the CPA).

25 Section 34 of the Bill (Section 128.1 of the CPA).

26 Section 34 of the Bill (Section 128.2 of the CPA).

27 Section 34 of the Bill (Section 128.3 of the CPA).

28 Section 54 of the Bill (Section 244.1 of the CPA).

29 Section 54 of the Bill (Section 244.2 of the CPA).

About BLG

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.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must 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