Canada: Bill 29: Québec Takes On Planned Obsolescence

On June 1, 2023, the Québec Minister of Justice tabled Bill 29, An Act to protect consumers from planned obsolescence and to promote the durability, repairability and maintenance of goods. The bill aims to fight planned obsolescence, which, according to the bill, occurs when a product is subject to "a technique aimed at reducing its normal operating life". If adopted, the bill would introduce significant amendments to the Consumer Protection Act (CPA) by imposing on manufacturers and merchants new standards and obligations related to the good working order, durability and repairability of certain consumer goods, creating a new regime of monetary administrative penalties, and holding liable the officers and directors of an organization that contravenes the CPA or its regulations.

What you need to know

The bill proposes to amend the CPA by:

• prohibiting merchants (which include manufacturers) from trading in goods for which obsolescence is planned and the use of techniques that make it more difficult for consumers to maintain or repair goods;
• imposing a "good working order" warranty, the duration of which will be determined by regulation, covering the costs of repair (parts and labour) for certain commonly used new goods and used cars;
• requiring merchants to make available the parts needed to service and repair the goods covered by the new warranty "for a reasonable time after the contract has been entered into", or failing that, to replace the goods free of charge or to refund their purchase price;
• introducing a regime of monetary administrative penalties administered by the Office de la protection du consommateur (OPC), along with penal sanctions, for any breach of the CPA; and
• providing that any directors, officers, mandataries or representatives of an organization who commits an offence under the CPA or its regulations are presumed to have also committed the offence unless it is established that they exercised due diligence.

We do not know yet when Bill 29 will come into force. However, it is expected to come into force gradually, over a period of up to three years from the date of assent. The bill will be subject to parliamentary review and may be amended during the adoption process.

The new warranty of good working order: commonly purchased goods

Bill 29 generally prohibits trading in goods for which obsolescence is planned. It introduces a "floor" period, the extent of which will be determined by regulation, during which certain commonly purchased goods are expected to be in good working order. The following goods will be covered by the new warranty: ranges, refrigerators, freezers, dishwashers, washing machines, dryers, television sets, desktop computers, laptops, electronic pads, cellular telephones, video game consoles, air conditioners, heat pumps and any other goods determined by regulation.

If the goods come into disrepair during this period, merchants will have to assume the costs of repair, including reasonable transportation or shipping costs. The duration of the warranty will need to be disclosed near the advertised price of the goods and any relevant information relating to the warranty, as determined by regulation, will need to be transmitted to the consumers.

This warranty also now requires merchants to make available the replacement parts, repair services and information necessary to maintain or repair the goods "for a reasonable time after the contract has been entered into", and at a price that does not "discourage consumer access", unless they indicate before the contract is entered into that they do not supply such parts, services or information. The bill also provides that diagnostic software and its updates must comply with the same requirements. Additionally, it must be possible to install the replacement parts using commonly available tools, without causing irreversible damage to the goods. If the merchant fails to comply with these obligations, the consumer may be entitled to request that the goods be repaired without charge, and if the merchant fails to respond to such a request, it may be required to replace the goods or to refund the purchase price.

Bill 29 also prohibits the use of techniques designed to make it more difficult to maintain or repair goods. In the case of a long-term lease contract, the bill prohibits stipulations that would allow a merchant to claim charges on the ground that:

• a part or component installed as part of the normal maintenance service does not satisfy the merchant;
• the part is not an original part; or
• the maintenance service was not performed by the manufacturer or a merchant approved by the manufacturer.

Merchants who want to sell an additional warranty will also have to disclose to the consumer the existence of the good working order warranty and that the consumer may terminate the additional warranty contract without cost or penalty within 10 days.

The bill also subjects used cars to the good working order warranty, and provides that in such a case, the merchant cannot claim the absence of replacement parts, repair services or information necessary to maintain or repair the goods.

Penal sanctions

For most of the new CPA provisions introduced by Bill 29, a violation by an organization carries a fine ranging between $3,000 and $125,000. These amounts could be increased for certain other provisions of the CPA, such as the prohibition on trading in goods for which obsolescence is planned or the obligation to appropriately disclose the existence and duration of the good working order warranty. In such cases, the minimum fine could be equal to twice the pecuniary benefit derived from the commission of the offence and the maximum fine could be equal to four times this amount.

Bill 29 also introduces new factors that the court should consider in determining the amount of the fine, including the economic loss caused to consumers, the number of consumers who were wronged or could have been wronged, and the pecuniary benefit and the other benefits that were derived or could have been derived from the commission of the offence.

More generally, the bill provides that any directors, officers, mandataries or representatives of an organization who commits an offence under the CPA or its regulations are presumed to have also committed the offence unless it is established that they exercised due diligence by "taking all necessary precautions to prevent the offence".

A new regime of monetary administrative penalties

The bill also introduces a regime of monetary administrative penalties that may be ordered by the OPC for contraventions of the CPA or its regulations. In this regard, the bill empowers the government to determine by regulation "objectively observable failures to comply" with a provision of the CPA or its regulations.

The amount of these penalties will also be determined by the government but may not exceed $3,500 per day in the case of non-individuals, a failure to comply constituting a new failure for each day it continues.

Given the parallel existence of penal and administrative penalty regimes, the same failure occurring on the same day cannot be sanctioned by both regimes.

Importantly, when the organization responsible for paying the penalty fails to do so, its directors and officers will be solidarily liable for the payment, unless they establish that they exercised due care and diligence to prevent the failure. The payment of a monetary administrative penalty is secured by a legal hypothec on the movable and immovable property of the debtor.

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.