Québec’s Language Legislation: Be Ready for Important Changes Impacting Commercial Contracts, Trademark Usage and Government Filing Requirements | Stikeman Elliott LLP
Our August 2022 post summarized the main business-related changes that Bill 96 made to the Québec Charter of the French Language (“Charter”). This post provides updates on several key issues, particularly the potential impact on commercial contract drafting of amendments to Bill 96 that took effect on June 1, 2023 and also notes (among other issues) the importance for many businesses of getting out in front of changes to the Charter that will affect trademark usage as of June 1, 2025.
The issues considered are:
- French-language requirements when contracting with the Québec civil administration: the rule and the exceptions
- Adhesion contracts and related documents: new rules
- Registration filings: a new requirement for small businesses
- Signage and inscriptions: narrowing the trademark exception
- Mandatory translation of court pleadings: an update
Note that, for the sake of simplicity, we refer in this post to certain impacts of the legislation and regulations on the use of English in commercial contexts, but the cited provisions generally apply in the same way to any “language other than French”.
Language of Contracts With Québec’s Civil Administration: New Rules in Force June 1, 2023
The basic rule remains the same after June 1, 2023: contracts with the Québec civil administration (the “Civil Administration”)[1] must be in French, subject only to limited exceptions. However, as of June 1, 2023, the following additional exceptions apply:
First, certain types of contracts may have an English version attached to the French version. These include:
- Contracts between the Civil Administration and a party located outside of Québec (i.e., not residing (individuals) or required to be registered in Québec (enterprises));
- Certain international and intergovernmental agreements; and
- Agreements with First Nations (ss. 21 and 21.1)
Secondly, certain types of contracts may be drafted in English only, as listed in section 21.5 of the Charter and as prescribed by regulation:
- Contracts with clearing houses;
- Contracts entered into on a platform that makes it possible to trade in derivatives, securities or other movable property, provided, in the latter case, that the contract is not a consumer contract; and
- Insurance policies from outside Québec or uncommon in Québec where there is no French equivalent in Québec.
The Regulation respecting the language of the civil administration (the “RLCA”), in force as of June 1, 2023, sets out the situations in which the Administration will be permitted to include an English version of the contracts and related documents referred to in sections 21 and 21.3 with the French version.
Pursuant to section 14 of the RLCA, when the new rules in the Charter permit a contract with the Civil Administration to be in French and English or an English version to be attached to the French version, the parties may determine the legal value of each version. In the absence of an express determination by the parties, the French version will prevail.
Sanctions for non-compliance
The new sanctions for a non-compliant contract or act with the Civil Administration also come into force on June 1, 2023 (s. 204.7). An English-only contract that should have been drawn up in French may be held to be absolutely null, whether or not the contravention causes any prejudice, if the following three elements are all present:
- An agency of the Civil Administration is a party to the contract or act;
- The provisions of the contract or act contravene the rules on the language of contracts with the Civil Administration in sections 21 to 21.2 of the Charter; and
- The contract or act has no foreign element (see our August 2022 post for more details).
Contracts with the Civil Administration that have a foreign element should accordingly not be at risk of being declared absolutely null under s. 204.7 for contravening Charter language rules.
Even if a contract with the Civil Administration is compliant with the Charter, if the performance of the contract leads to a failure to comply the Government of Québec may apply to a court for the “resolution, resiliation [termination] or suspension” of the contract. The court shall grant the Government’s request if the Government is able to show that this would be in the interest of maintaining the status of the French language in Québec although the court will also take into account the public interest in maintaining the contract.
Language of Adhesion Contracts and Related Documents with Private Parties: New Rules in Force June 1, 2023
Adhesion contracts (which the legislation also refers to as “contracts pre-determined by one party) are contracts whose principal clauses have been drafted by one party (the “business”) and which cannot be negotiated by the other party (the “adhering party”). Standard examples include employment contracts, collective agreements, insurance contracts, leases, and co-ownership declarations. “Contracts containing standard clauses” is not defined in the Charter (or other Québec law) and may include contracts with boilerplate and other contracts with certain non-negotiable clauses drafted by one party.
As of June 1, 2023, new rules apply to contracts of adhesion. The rules that apply to a given contract of adhesion depend on whether or not it falls under an exemption (“exempted adhesion contract”). The new rules with respect to contracts containing standard clauses are the same as for an exempted adhesion contract and similar to the current rules.
New rules for adhesion contracts (where no exemption applies)
Businesses must have a French version of adhesion contracts and related documents to be used in Québec. An adhering party may choose to sign an adhesion contract in English only if the business has first remitted (provided) the French version to the adhering party. This means that a business cannot avoid the obligation to have French versions of its contracts of adhesion by agreeing with its customers to use English versions.
If the parties have chosen to enter into the contract exclusively in English, the related documents may be exclusively in English as well.
Businesses may wish to consider adding a clause to the English-language version of an adhesion contract noting that the French-language version was remitted first and that the parties subsequently chose to have the contract and related documents drawn up and concluded in English only.
New rules for exempted adhesion contracts and contracts with standard clauses
Exempted adhesion contracts include:
- Loan contracts, financial instruments, derivatives contracts, and certain special insurance policies; and
- Any contract used in relations with persons outside Québec.
The adhering party may sign exempted adhesion contracts and contracts with standard clauses in English only if that party has expressed the wish to do so. As we noted in our initial blog post, the last exemption may be of particular interest to foreign companies dealing with Québec businesses and consumers but its exact scope remains unclear.
Businesses may wish to consider adding a clause to the English-language version of these contracts stating that the parties wish to have the contract and related documents drawn up and concluded in English only.
New Filing Requirements Under the Legal Publicity Act: In Force June 1, 2023
Effective June 1, 2023, Bill 96 adds a new requirement relating to the registration declaration that enterprises must file with the Québec Enterprise Register (“REQ”) under the Québec Act respecting the legal publicity of enterprises (“Legal Publicity Act”). Specifically, the amended Legal Publicity Act will require that enterprises employing between 5 and 49 people state on their REQ declaration the proportion of their employees who are not capable of communicating in French. This new requirement will apply from June 1, 2023 until June 1, 2025, after which it will apply only to enterprises with between 5 and 24 employees.
Enterprises registering for the first time will need to declare this information in their registration declaration or in their initial declaration. Enterprises that are already registered will be required to make the declaration in their annual update or by filing an updating declaration. The information will be publicly available.
Note that this new requirement under the Legal Publicity Act is separate from the amendments to the Charter introduced by Bill 96 in respect of francization which will, as of June 1, 2025, require companies employing between 25 and 49 employees in Québec to register with the Office québécois de la langue française as a first step to obtaining a francization certificate.
Getting ready for the New Rules on the Trademark Exception for External Signs and Inscriptions: In Force June 1, 2025
The exception for “recognized” non-French trademarks for external signage and on inscriptions (labels on and documents supplied with, products) will be limited to marks that are “registered” under the Trademarks Act (Canada) as of June 1, 2025.
Businesses will wish to file any needed trademark applications as soon as possible since trademark application delays of three years or more are currently being experienced at the Canadian Intellectual Property Office.
For inscriptions, if a generic term or product description is included in the English language mark on the product, the term or description will have to appear in French on the product or on a medium permanently attached to it. The purpose of this new provision appears to be to prevent companies from including non-distinctive information in their trademarks to avoid providing this information on the inscription in French.
French must also be markedly predominant on public signs and posters visible from outside the premises of a business that include any of the following: (i) a trademark in a language other than French, or (ii) the name of a business that includes an expression from a language other than French.
Businesses will wish to begin to prepare new designs for labels and signage to ensure they will be able to comply with the new rules by June 1, 2025.
French Translations of Court Pleadings: Status Update
The Bill 96 amendments to the Charter required court pleadings in English filed by corporations in Québec courts to include a certified French translation by a licensed translator, prepared at the corporation’s expense, as of September 1, 2022. However, this requirement was suspended by a court decision on August 12, 2022 pending a decision on the merits which, as of the date of this post, has not yet been rendered.
[1] “Civil Administration” is defined in Schedule I of the Charter to include the Government of Québec, Québec government agencies, corporations fully owned by the Government, most municipalities, school bodies, and bodies in the health and social services network, among others.
