Canada: Proposed Amendments To Quebec Consumer Protection Act Have Wide-Reaching Impact

Copyright 2009, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Financial Services, June 2009

On June 16, 2009, the Quebec Minister of Justice and Attorney General, Kathleen Weil, introduced Bill 60 in the National Assembly, An Act to amend the Consumer Protection Act and other legislative provisions. Bill 60 represents Phase II of the Office de la protection du consommateur's (the OPC) reform of the Quebec Consumer Protection Act (the CPA), the first phase of which amended the CPA in 2006 to introduce rules applicable to distance contracts, and the third and last phase of which is expected to amend the portion of the CPA dealing with credit contracts. Bill 60 will likely be submitted for specific consultation and committee review when the National Assembly reconvenes in September 2009, with adoption of the bill expected by the end of the fall term in November or December 2009. It is unclear whether the amended provisions will enter into force upon their adoption or at a later date. It is important to note that while certain proposed amendments will only apply to consumer contracts that are entered into on or following the date of coming into force of Bill 60, other proposed amendments will render certain contractual provisions in contracts entered into prior to the coming into force of Bill 60 without effect from such date.

Press coverage surrounding the presentation of Bill 60 has focused on the impact of the proposed amendments on cell phone, Internet and other service agreements that qualify as "contracts involving sequential performance for a service provided at a distance." However, many of the proposed amendments contained in Bill 60 actually apply to businesses that operate in a variety of sectors, including those involved in financial services. The most significant amendments for financial service providers are those respecting prepaid cards, certain types of contractual clauses, and enforcement. If adopted as currently drafted, Bill 60 will require that a number of financial service providers undertake a significant review and amendment of their current customer documentation and business practices.

Even though the amendments proposed by Bill 60 that apply to the telecommunications industry do not apply to financial service providers, they are nevertheless notable in reflecting the position of the OPC and the Quebec government that the CPA applies to industries that are traditionally within the exclusive federal legislative jurisdiction. Importantly, this position is consistent with the position taken by the Quebec Superior Court in its recent ruling in the class action case Marcotte v. Banque de Montréal et al. (Marcotte), which was coincidentally rendered less than one week before the introduction of Bill 60. In Marcotte, the Superior Court ruled that, despite the exclusive federal legislative jurisdiction over banking, the contested CPA requirements regarding contracts extending variable credit (including credit cards) and the calculation of credit charges nevertheless apply to banks. Federally regulated financial institutions (FRFIs) may therefore wish to seriously consider at this time the possibility that the CPA and other provincial consumer protection legislation may in fact apply to their activities. This would not only affect compliance of customer banking documents, but would also impact documentation used for some business clients since the CPA (and similar legislation in other provinces) extends its protection to certain categories of sole proprietors (including, in Quebec, professionals and those involved in skilled trades).

Although it is expected that the Marcotte decision will be appealed, including its conclusion that the CPA applies to banks (as indicated in the May 2009 Blakes Bulletin on Financial Services: Proposed New Rules Announced for Credit Cards and Other Loans), FRFIs and the affiliates that they control will soon be required to conduct an extensive review of their customer documentation if the proposed federal Credit Business Practices Regulations and proposed amendments to the federal Cost of Borrowing Regulations) (Federal Regulations) are adopted as currently drafted. Given that many of the proposed provisions in the Federal Regulations that would affect applications, disclosure statements, credit agreements, monthly statements, calculation methods and business practices are actually quite similar to the current CPA requirements, FRFIs may wish to use the same opportunity to assess the changes to documentation that would be required to comply with the CPA and its proposed amendments in light of both the Marcotte decision and Bill 60.

This bulletin summarizes and comments upon the proposed amendments of the CPA contained in Bill 60 that are most likely to impact businesses involved in financial services.

Contracts for the Sale of Prepaid Cards

Bill 60 introduces rules regarding contracts for the sale of prepaid cards. These rules will apply to gift certificates, gift cards or similar medium of exchange that are paid in advance and allow the customer to acquire goods or services from one or more businesses. The following requirements will apply to contracts for the sale of prepaid cards if the proposed changes come into effect:

(i) the terms and conditions of use of the prepaid card would have to be disclosed to the consumer prior to entering into such contract (including the manner in which the consumer would check his or her card balance);

(ii) the disclosures required in (i) would have to appear on the prepaid card or be provided to the consumer in writing;

(iii) expiry dates on a prepaid card would be prohibited unless the terms and conditions of use of the prepaid card provide for the unlimited use of a service; and

(iv) fees charged to the consumer for the issuance or use of the prepaid card would be prohibited.

However, we note that Bill 60 does specifically provide for the possibility that regulations may authorize the use of expiry dates and the practice of charging fees for the issuance or use of prepaid cards.

If these proposed changes come into effect as currently drafted, prepaid card agreements that provide an expiry date would be without effect as of the date of the amendments coming into force.

While other provincial regulators have expressed the view that their provincial prepaid card legislation does not apply to bank-issued cards (because banks are federally regulated), it seems unlikely that the Quebec regulator will take this position.

Contractual clauses

Unilateral amendment

Bill 60 proposes strict rules affecting the enforceability of unilateral amendment clauses in consumer contracts that are drafted in favour of a business. The validity of such clauses under Quebec civil law was already questionable, particularly in light of the provision of the Civil Code of Québec against abusive clauses. The proposed amendments therefore serve to clarify when such stipulations may have effect and provide the manner in which such unilateral rights must be exercised.

Bill 60 distinguishes between a unilateral amendment clause found in a term contract and an indeterminate-term contract; it also distinguishes between unilateral amendments made to an essential element and a non-essential element of a contract. Essential elements of a contract include the nature and the price of the goods or services and the term of the contract. Bill 60 prohibits the use of a unilateral amendment clause in a consumer contract with a term to amend an essential element of the contract. It does allow the use of such a clause in a consumer contract with an indeterminate-term or to amend a non-essential element in a consumer contract, provided certain requirements are met. The unilateral amendment clause must specify which clauses can be amended unilaterally, must specify that the business must provide the consumer with a 60-day prior written notice setting out the amended contractual clauses, and must provide the consumer the opportunity to cancel the contract without cost or penalty within the 60-day notification period if the amendment is to the consumer's detriment. A unilateral amendment that does not comply with the new requirements would not be enforceable against the consumer.

Particular attention has to be paid to loan agreements and other similar agreements with terms that may currently stipulate a general right to amend the terms of the agreement. Such contracts entered into on and after the date of coming into force of Bill 60 would be subject to the new amendments. We note that these changes to the CPA regarding the unilateral amendment of consumer contracts would not apply to contracts extending variable credit (such as credit card agreements and line of credit agreements), which would continue to be subject to their own specific contractual requirements under the CPA.

Unilateral cancellation

Bill 60 similarly prohibits contractual clauses according to which a business may unilaterally cancel a fixed-term contract involving sequential performance (for services that are provided and paid for over a period of time, such as a one-year contract for a fitness trainer that requires monthly payments). Bill 60 provides for a 60-day prior written notification process for service contracts involving sequential performance that do not have a fixed term. This proposed amendment is unlikely to significantly affect most financial service providers.

Penal clauses

Bill 60 amends section 13 of the CPA to clearly provide that penal clauses (i.e., stipulations requiring consumers to pay costs other than interest accrued upon non-performance of an obligation) are prohibited. The current version of section 13 had been interpreted by Quebec courts to allow the use of penal clauses in consumer contracts. Bill 60 therefore amends section 13 of the CPA to restore the original legislative intent by prohibiting penal clauses. The current and amended versions of section 13 do not apply to credit contracts.

Therefore, if enacted as drafted, except in cases of credit contracts, stipulations that require the consumer, upon non-performance of his or her obligation, to pay a stipulated fixed amount or percentage of charges, or to pay penalties or damages, other than interest accrued, will be clearly prohibited. Again, this proposed amendment is unlikely to significantly affect most financial service providers. However, where applicable, this amendment may apply to NSF (insufficient funds) fees.

Clauses that are inapplicable in Quebec

In the interest of having one set of consumer documentation that can be used across Canada, many contractual clauses are currently drafted in a manner that leaves open the possibility that such clauses may not be applicable in certain provinces or may indicate that the clauses will apply unless prohibited by law. As a result, the OPC found that it often remained unclear to the consumer which clauses actually applied to him or her.

Bill 60 proposes a new remedy to this uncertainty by requiring that clauses not applicable to the Quebec consumer be immediately preceded by a statement to that effect. This proposed amendment would apply to all consumer contracts and would have a significant effect on the consumer contractual documentation currently in use across Canada by financial service providers and, more generally, by other businesses. As a matter of practice, this would mean that every contractual clause not applicable to a Quebec consumer would have to be clearly identified. The impact of this amendment is further strengthened by the widened recourse to injunction that is also proposed by Bill 60 (see below).

We note that only consumer contracts that are entered into on and after the date of coming into force of the amendments proposed by Bill 60 will be subject to this new requirement.


Voluntary undertaking

The CPA currently grants the president of the OPC (the President) the power to accept a voluntary undertaking from a business regarding compliance with the CPA. Certain proposed amendments of Bill 60 clearly provide that the failure to comply with such an undertaking would now constitute grounds upon which the President could refuse, suspend or cancel a permit issued by the OPC. This would include the refusal, suspension or cancellation of a money lender permit held by a consumer finance company. This proposed amendment would therefore give the President additional enforcement powers against consumer finance companies.


The CPA currently grants the President limited power to apply for an injunction. The President may currently use this power to request an injunction against a business engaging in a "prohibited practice" to cease using such a practice. Essentially, the prohibited practices for which an injunction can presently be obtained involve advertising practices and various types of false representations.

Bill 60 extends the circumstances under which an injunction can be sought. Interestingly, the President will now be able to seek an injunction to order a business to remove contractual provisions that violate the CPA or to comply with the new requirements applicable to certain provisions (see above). Bill 60 also widens the power to apply for an injunction to consumer advocacy bodies (e.g., Option Consommateurs). Failure to comply with an injunction obtained by the President or a consumer advocacy body may lead to a motion for contempt of court.

The recourse to an injunction will greatly increase the enforcement powers available to the OPC and consumer advocacy bodies. Although this greater power may lead to increased legal action, the availability of such recourse may have the effect of reducing the number of class actions commenced against financial service providers alleging violations under the CPA. That is, recourse to an injunction may provide an effective enforcement mechanism to protect consumers in a proactive manner rather than relying on class actions to retroactively claim for injury and punitive damages.

In any case, the possibility of facing an injunction for failure to comply with the CPA's contractual requirements greatly increases the importance of ensuring compliance of all customer documentation with the requirements of the CPA, as the failure to do so may significantly increase the risk of immediate legal action.

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.

Events from this Firm
22 Nov 2017, Seminar, Toronto, Canada

Join members of the Blakes Environmental group for a discussion of hot topics and trends in Canadian environmental law. In a “quick hits” format with time for discussion, our panellists will speak on a variety of cutting-edge issues.

22 Nov 2017, Seminar, Toronto, Canada

Mental illness is becoming the leading cause of disability globally, yet it remains cloaked in secrecy, shame and misunderstanding. This presentation discusses the reality and impact of mental illness in our lives as well as models of understanding and intervention. The goal is both to raise literacy as well as change culture in a way that leads to better lives for the many affected Canadians and their families.

24 Nov 2017, Seminar, Toronto, Canada

Blakes is proud to host our New to In-House Series, designed to bring together junior and mid-level in-house counsel for a candid exchange of insights to highlight and address some of the challenges and opportunities facing in-house lawyers in their roles today.

In association with
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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.