Canada: Bill 29 Receives Royal Assent: Prioritizing Durability, Sustainability And Enhanced Consumer Rights In Quebec

On October 5, 2023, Quebec's Bill 29 – An Act to protect consumers from planned obsolescence and to promote the durability, repairability, and maintenance of goods (the "Bill"; "Bill 29") received royal assent. This transformative legislation not only amends the Quebec Consumer Protection Act (the "CPA") by prohibiting the sale and manufacturing of goods designed with planned obsolescence, but it also empowers the Quebec government to establish technical and manufacturing standards for various consumer goods. These standards, including those related to interoperability between goods and their chargers, are poised to tip the scales of market dynamics even more in favour of consumer interests and product durability.

While certain provisions came into force on assent, most of the provisions are scheduled for phased implementation over the next six months, 15 months, two years and three years. Though specific details regarding the precise scope of the forthcoming provisions are currently limited, they are expected to place substantial obligations on companies engaged in the sale, long-term lease and/or manufacturing of certain consumer goods in Quebec.

Currently in force

The following key provisions of Bill 29 are currently in force:

• A new lemon law for seriously defective automobiles:

The owner or long-term lessee of a vehicle now has the right to request that the courts declare the vehicle a "seriously defective automobile" where the consumer has exhausted a prescribed number of unsuccessful repair attempts for the same or unrelated defects.

• Prohibition on fees that can be claimed for long-term lease agreements:

Section 150.9.1 CPA now explicitly prohibits long-term lease agreements from including clauses whereby a merchant may claim the following:

• 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; as well as
• 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.

As a result, long-term lease agreements will need to be carefully reviewed and revised to ensure compliance with the prohibition of charging fees in relation to, namely, the use of non-OEM parts or maintenance services not performed by manufacturer-approved merchants.

• Planned obsolescence:

Newly enacted section 227.0.4 CPA prohibits any person, by any means, from manufacturing, offering or entering into a contract with a consumer that concerns a good for which obsolescence is planned (i.e. a good affected by a technique aimed at reducing its normal operating life).

While the general statute of limitations for penal proceedings under the CPA is two years, a notable amendment to section 290.1 CPA has extended this limitation to an exceptional five years specifically for penal proceedings related to violations of section 227.0.4 CPA.

• New 10-day cooling-off period for extended warranty agreements:

Companies in the business of selling extended warranties will need to revise their agreements to comply with section 228.3 CPA. Per the newly enacted provision, a merchant who offers a contract of additional warranty (or proposes clauses of a contract regarding such a warranty) must inform consumers that they have a 10-day statutory window (after the contract has been entered into) during which they may rescind the extended warranty agreement (or clauses of a contract regarding such a warranty) without cost or penalty by sending the merchant or its representative a written notice to that effect.

Section 228.3 CPA further provides that the contract of additional warranty (or the clauses of a contract regarding such a warranty) are "resolved by operation of law from the sending of the notice to the merchant or the merchant's representative"; in such cases, the merchant must, as soon as possible, return to the consumer the sum received from them under said agreement (or clauses). It should be noted that this provision does not apply to a contract for which the underwriter is an insurer authorized under the Insurers Act (chapter A-32.1).

An overview of certain forthcoming amendments

• The Statutory Warranty of "Good Working Order" – Defined Warranty Durations for Specific Consumer Goods: One of Bill 29's primary objectives is to establish a legal warranty of "good working order" for a non-exhaustive list of commonly used new consumer goods sold and/or leased – the duration of which will be determined by regulation. As a result, we anticipate extensive regulations to be drafted in concert with industry experts to specifically identify the duration of the "warranty of good working order" for household essentials such as ranges, refrigerators, freezers, and dishwashers, as well as laundry appliances like washing machines and dryers, and modern-day technology, such as television sets, desktop computers, laptops, electronic pads (tablets), cellular telephones, and video game consoles. Even climate control systems, including air conditioners and heat pumps, fall within the scope of the new warranty. The legislation also allows for the inclusion of "any other goods determined by regulation."

The forthcoming amendments to the Quebec CPA introduce a notable departure from the current legal landscape. Specifically, the duration of the statutory warranty of "good working order" will no longer be subject to judicial interpretation. Instead, this warranty's specific timeframe will be formally established through regulatory standards, thus creating a more structured framework for handling warranty-related issues in the marketplace.

• The Statutory Warranty of Availability – Right to access repair parts, repair services and maintenance/repair data:While section 39 of the CPA currently provides a statutory warranty of availability pursuant to which replacement parts and repair services for goods that are "of a nature that require maintenance work" must be available "for a reasonable time" after the contract has been entered into, Bill 29 will extend such right to information and data required to repair or maintain said goods. Under Bill 29, such maintenance and repair information shall capture diagnostic software and its updates, and must also be available in French. Importantly, the Bill mandates that replacement parts must be easily installable with "commonly available tools" (a term that may be further defined by regulation), preserving the longevity of consumer purchases.

In addition, the Government of Quebec is likely to prescribe the time period during which certain repair parts and data must be available, as well as the time period during which merchants and manufacturers must provide them upon consumer request via forthcoming regulations.

While merchants and manufacturers may be released from their statutory warranty of availability by warning consumers in writing that they do not supply replacement parts, repair services or maintenance/repair data before a contract is entered into, this exception will not available to vehicle manufacturers in respect of access to a vehicle's diagnostic, maintenance or repair data, nor to specifically identified merchants and manufacturers to be determined by regulation.

• Enhanced enforcement mechanisms: Building upon the Consumer Protection Act's existing enforcement mechanisms, the Bill will introduce an administrative monetary penalty framework of up to $3,500/day and significantly increase existing penal sanctions. Most notable are maximum fines for specific offences (including those concerning prohibited practices) of $125,000 or up to 5% of a corporation's global turnover from the preceding fiscal year (whichever is greater).

The road ahead

Bill 29 casts a wide net and leaves several critical aspects to be determined through regulations. These include the duration of the legal warranty of good working order for prescribed classes of consumer goods, additional pre- and post-contractual disclosure requirements for merchants, and prescribed guidelines for replacement parts and information necessary for product maintenance and repair.

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