Canada: Fines Increased and Penal Provisions Reinforced under Quebec’s Charter of the French Language

Copyright 2010, Blake, Cassels & Graydon LLP

Originally published in Blakes Bulletin on Business, October 2010

On October 19, 2010, the Quebec National Assembly adopted Bill 115 – An Act following upon the court decisions on the language of instruction (the Act) amending the Charter of the French Language (Charter). The Charter, which makes French the official language of Quebec, requires the use of French in connection with the conduct of business in the province, particularly in dealings with customers and employees. While the principal changes created by the Act – and those that have received the most attention in the media – relate to rules governing eligibility to receive government-funded schooling in English, the Act also contains significant amendments to the Charter's penal provisions, which we discuss in this bulletin. We also discuss measures which may be taken to mitigate liability under the Charter's newly strengthened penal provisions.

Under the Act, fines for the breach of the Charter or a regulation thereof have been increased as follows:

• for natural persons:
  
  
  • the minimum fine is C$600 (was C$250)
  • the maximum fine is C$6,000 (was C$700)
    
    
• for legal persons (including corporations):
  
  
  • the minimum fine is C$1,500 (was C$500)
  • the maximum fine is C$20,000 (was C$1,400).
    
    

These ranges apply to a first offence. For second or subsequent offences, the fines are doubled (prior to the Act, the minimum and maximum fines for subsequent convictions by corporate offenders were C$1,000 and C$7,000 respectively).

The Act requires the judge, in determining the fine, to take into account the revenues and other benefits the offender derived from the offence as well as any damages and "socio-economic consequences" that resulted from the offence.

The Act also provides for the possibility that an additional fine may be imposed on the offender equal to the financial gain the offender realized or derived from the offence. Thus, in addition to the maximum fine being payable, disgorgement of the financial gain resulting from the offence may be imposed. For example, if the offence is the failure to have a French language version of directions for use of a product, it would appear that the financial gain will be calculated based on the cost savings resulting from not having such French-language version, however, it will be up to the courts to interpret the disgorgement provision.

The Act creates a new offence for those who aid or abet in the commission of an offence under the Charter or its regulations. The Charter already made it an offence to distribute or otherwise market non-compliant products, computer software or publications, thereby affecting designers, manufacturers, distributors and merchants. Nonetheless, it appears that the new aiding and abetting offence enlarges the scope of potential violators and, given that product distribution channels can have many components and involve many parties, it will be interesting to see how prosecutors will apply this provision.

As well, the Act creates a presumption that an offence has been committed by a party upon showing that the offence was committed by an agent or employee of such party, unless the party shows that it exercised due diligence and took all necessary precautions to ensure compliance with the Charter and its regulations. Accordingly, this provision creates the pathway for prosecution of corporations by establishing presumptive corporate liability upon proof that an agent or employee of the corporation has breached the Charter. To avoid liability, the presumptive corporate offender then has the burden of showing that it had a compliance program in relation to the Charter or had taken other reasonable efforts to comply with the Charter.

Finally, the Act extends the statutory bar for instituting penal proceedings for violations of the Charter or its regulations from one year to two years.

The fines payable under the Charter had not been revised since 1997 and, prior to the Act, the fines levied against offenders were relatively modest, with many fines in the C$500 to C$1,000 range, and only a few instances of fines of higher amounts, such as C$5,000, for repeat offenders. It remains to be seen the extent to which officials responsible for enforcement of the Charter will seek to mete out the heavier penalties created under the Act, and how judges will apply the new provisions. The fines can easily add up. For example, if a company has several kinds of products which do not comply with the Charter's French-language requirements with respect to labelling, instructions for use or warranties, a separate fine can be levied in respect of each kind of non-compliant product. Whereas the maximum fine for a second offence by a corporate offender was previously C$7,000, the Act increases that maximum to C$40,000, and provides for a possible additional fine based on disgorgement of the financial gain resulting from the offence.

The amendments to the Charter's penal provisions made by the Act which we discuss in this bulletin came into effect on October 19, 2010.

Some Best Practices

A number of proactive measures can be undertaken to potentially avoid or limit penal liability under the Charter, as amended by the Act. First and foremost, companies carrying on business in Quebec are reminded that it is best to assume that the Charter creates liability for any non-compliance and, as a consequence, they should establish, implement and monitor the appropriate measures in order to avoid or at least mitigate such liability, which can include the following:

• ensure your compliance program appropriately addresses French-language compliance under the Charter;
• review compliance with the Charter, particularly areas of weakness, and seek to address them;
• ensure complaints by the French-language regulator, the Office québécois de la langue française, are addressed, and that your staff has up-the-ladder reporting of complaints by customers or others;
• ensure staff is appropriately informed of your compliance program.

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.