Follow-up to the recommendations in the report of the Charbonneau Commission

May 26, 2016

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Last May 10, the Minister of Municipal Affairs and Land Occupancy, Martin Coiteux, announced the tabling of several amendments to Bill 83 dealing with various legislative provisions on municipal matters. These amendments pertain to the recommendations contained in the report of the Charbonneau Commission.

Changes to the call for tender rules for municipalities

In order to strengthen the integrity of the process for awarding contracts in municipal calls for tenders, certain changes are being proposed to the functioning of the process.

For example, the names of the members appointed to the selection committee would be kept confidential. Contractors would also be able to participate anonymously in the process.

In addition, the amendments as presented would increase the threshold for the awarding of contracts without calls for tenders in cities from $25,000 to $100,000.

Increased oversight of political contributions

With a view to a sounder public administration, Minister Coiteux is suggesting that the time limit for instituting proceedings relating to illegal financing in municipal politics be extended to seven years. The current time limit is five years.

The amendments also provide that cash loans or guarantees in favour of a municipal party would be limited to a maximum of $5,000. Additionnaly, any persons who agree to make such a loan or provide such a guarantee would have to sign a statement guaranteeing that they would not act as front men for financing.

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On May 11, 2016, following in the footsteps of Minister Coiteux, the Minister of Justice, Stéphanie Vallée unveiled Bill 98 with a view to amending various statutes primarily regarding admission to the professions and the governance of the professional system.

Responding primarily to four recommendations of the Charbonneau Commission, the main objective of this Bill is the public protection.

Governance, ethics and public protection

To this end, Bill 98 would allow the Office des professions to take the lead by investigating a professional solely on the basis of information received by it. Thus, the Office would no longer have to wait for permission from the Minister of Justice and could act on its own initiative, considerably reducing the timeframe for the investigation.

The professionals of all professional orders would also have to follow mandatory ethics and professional conduct training. In the same vein, the Bill provides for improvements to the training of the directors of professional orders, particularly in such matters.

Suspension or limitation of a professional's right to practice

Furthermore, the Minister of Justice is proposing that a professional's right to practice or use of his or her title should be suspended or limited when he or she is being prosecuted for an offence punishable by imprisonment of five years or more.

Immunity granted to informant also guilty of offence

The syndic would have the power to grant immunity to a professional who previously reported an offence which he or she participated in.

The objective here is to increase the protection of informants in order to encourage transparency and prevent the infiltration of organized crime into the legal economy.

The report of the Charbonneau Commission recommended that professional orders should be able to sanction firms that adopt illegal practices, and not just professionals. However, this recommendation is not included in Bill 98.

The amendments to Bill 83 were tabled on May 10, 2016. Bill 98 was introduced on May 11, 2016.

Lavery's Corporate and Business Integrity Group is closely following the adoption of the amendments to Bill 83 and the adoption of Bill 98 in order to assist you in applying these new provisions and advising you on the potential consequences to your firm.

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April 2, 2024

Environmental obligations: directors and officers, you may have more responsibilities than you think

In general, the directors and officers of a legal person have obligations and responsibilities relating to the legal person’s activities. Each director must act with prudence, diligence, honesty, loyalty and in the legal person’s interest.1 Each officer is responsible for representing the legal person and directing its activities.2 That said, directors and officers must keep in mind that they have greater duties and responsibilities and a heavier burden to meet when it comes to ensuring compliance with certain environmental laws. Since it came into force on May 12, 2022, the Act respecting certain measures enabling the enforcement of environmental and dam safety legislation (the “Act”) has ensured the enforcement of various environmental laws.3 The Act essentially provides for two types of consequences arising from the actions of directors, officers and, in some instances, other representatives of a legal person. The first involves a particular burden as regards compliance with environmental laws, and the second, consequences relating to the administration of the environmental authorization scheme. The duty of directors and officers to ensure compliance with environmental laws The Act’s criminal provisions provide for stiffer penalties for directors who commit an offence under an environmental law. Section 47 of the Act provides that where an offence is committed by a director or officer of a legal person, the minimum and maximum fines that would apply in the case of a natural person for such offence are doubled. Also, where a legal person commits an offence under an environmental law, its director or officer is presumed to have committed the offence, unless it is established that they exercised due diligence and took all necessary precautions to prevent the offence.4 The Act additionally provides that anyone who, by an act or omission, helps a person to commit an offence or induces a person, by encouragement, advice, consent, authorization or order to commit such an offence commits that offence and is liable to the same penalty as that prescribed for the offence they helped or induced the person to commit.5 Naturally, this rule applies to the directors and officers of a legal person, but is not limited to them. For example, it would also apply to an engineer or legal advisor who provides a legal person with advice causing it to commit an offence under an environmental law. Lastly, where a legal person has defaulted on payment of an amount owed,6 the directors and officers are solidarily liable, with the legal person, for payment of such amount. However, they may be exempted from this obligation if they are able to establish that they exercised due care and diligence to prevent the failure which led to the claim.7 This rule could apply, for instance, where a legal person is insolvent, which underscores the need to anticipate and effectively manage the environmental issues that a legal person is likely to face. Conduct of directors, officers and shareholders and the environmental authorization scheme The Environment Quality Act (EQA) establishes a ministerial authorization scheme for certain activities considered likely to have an impact on the quality of the environment.8 This authorization scheme is discretionary. Any activity covered by such scheme cannot be legally carried out unless the required authorization has first been issued. Holding and keeping such authorization is therefore fundamental for the company in question to continue to pursue its activities. Under the Act, the Minister of the Environment9 may refuse to issue, amend or renew a ministerial authorization, or decide to amend, revoke or cancel such an authorization, or oppose its transfer in certain situations relating to the conduct of the directors, officers and shareholders10 of the legal person holding the authorization.11 Situations in which the Minister may intervene in this way are, for example, those where one of a legal person’s directors, officers or shareholders has: filed a false declaration or document, or false information, or has distorted or omitted to report a material fact to have the authorization issued, maintained, amended, renewed or transferred failed to comply with an injunction made under any act that is administered by the Minister of the Environment defaulted on payment of an amount owed under any act administered by the Minister of the Environment (including monetary administrative penalties or any other fees that must be paid under such acts) been found guilty of an offence under an act administered by the Minister of the Environment or any regulations made under those acts been found guilty of an offence under a fiscal law or an criminal offence connected with activities covered by the authorization12 Thus, the conduct of directors, officers or shareholders can have repercussions on a legal person’s rights and obligations in carrying out activities authorized by the Minister. 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The Minister’s decision is then notified to the person concerned (section 40 of the Act), who may contest it before the Administrative Tribunal of Québec (sections 40 and 41 of the Act). See sections 32 to 36 of the Act.

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October 31, 2022

Cybersecurity and the dangers of the Internet of Things

While the Canadian government has said it intends to pass legislation dealing with cybersecurity (see Bill C-26 to enact the Critical Cyber Systems Protection Act), many companies have already taken significant steps to protect their IT infrastructure. However, the Internet of Things is too often overlooked in this process. This is in spite of the fact that many devices are directly connected to the most important IT infrastructure for businesses. Industrial robots, devices that control production equipment in factories, and devices that help drivers make deliveries are just a few examples of vulnerable equipment. Operating systems and a range of applications are installed on these devices, and the basic operations of many businesses and the security of personal information depend on the security of the devices and their software. For example: An attack could target the manufacturing equipment control systems on the factory floor and result in an interruption of the company’s production and significant recovery costs and production delays. By targeting production equipment and industrial robots, an attacker could steal the blueprints and manufacturing parameters for various processes, which could jeopardize a company’s trade secrets. Barcode scanners used for package delivery could be infected and transmit information to hackers, including personal information. The non-profit Open Web Application Security Project (OWASP) has released a list of the top ten security risks for the Internet of Things.1 Leaders of companies that use this kind of equipment must be aware of these issues and take measures to manage these risks. We would like to comment on some of the risks which require appropriate policies and good company governance to mitigate them. Weak or unchangeable passwords: Some devices are sold with common or weak initial passwords. It is important to ensure that passwords are changed as soon as devices are set up and to keep tight control over them. Only designated IT personnel should know the passwords for configuring these devices. You should also avoid acquiring equipment that does not allow for password management (for example, a device with an unchangeable password). Lack of updates: The Internet of Things often relies on computers with operating systems that are not updated during their lifetime. As a result, some devices are vulnerable because they use operating systems and software with known vulnerabilities. Good governance includes ensuring that such devices are updated and acquiring only devices that make it easy to perform regular updates. Poor management of the fleet of connected devices: Some companies do not have a clear picture of the Internet of Things deployed in their company. It is crucial to have an inventory of these devices with their role in the company, the type of information they contain and the parameters that are essential to their security. Lack of physical security: Wherever possible, access to these devices should be protected. Too often, devices are left unattended in places where they are accessible to the public. Clear guidelines should be provided to employees to ensure safe practices, especially for equipment that is used on the road. A company’s board of directors plays a key role in cybersecurity. In fact, the failure of directors to monitor risks and to ensure that an adequate system of controls is in place can expose them to liability. Here are some elements of good governance that companies should consider practising: Review the composition of the board of directors and the skills matrix to ensure that the team has the required skills. Provide training to all board members to develop their cyber vigilance and equip them to fulfill their duties as directors. Assess cybersecurity risks, including those associated with connected devices, and establish ways to mitigate those risks. The Act to modernize legislative provisions respecting the protection of personal information sets out a number of obligations for the board of directors, including appointing a person in charge of the protection of personal information, having a management plan and maintaining a register of confidentiality incidents. For more information, you can read the following bulletin: Amendments to Privacy Laws: What Businesses Need to Know (lavery.ca) Lastly, a company must at all times ensure that the supplier credentials, passwords and authorizations that make it possible for IT staff to respond are not in the hands of a single person or supplier. This would put the company in a vulnerable position if the relationship with that person or supplier were to deteriorate. See OWASP top 10

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Quebec recently enacted Bill 96, entitled An Act respecting French, the official and common language of Québec, which aims to overhaul the Charter of the French language. Here are 10 key changes in this law that will impose significant obligations on businesses: As of June 1, 2025, businesses employing more than 25 people (currently the threshold is 50 people) for at least six months will be required to comply with various “francization”1 obligations. Businesses with between 25 and 99 employees may also be ordered by the Office québécois de la langue française (the OQLF)2 to form a francization committee. In addition, at the request of the OQLF, businesses may have to provide a francization program for review within three months. As of June 1, 2025, only trademarks registered in a language other than French (and for which no French version has been filed or registered) will be accepted as an exception to the general principle that trademarks must be translated into French. 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In addition, other documents such as job application forms, documents relating to working conditions and training documents must be made available in French.5 As of June 1, 2022, employers who wish to require employees to have a certain level of proficiency in a language other than French in order to obtain a position must demonstrate that this requirement is necessary for the performance of the duties related to the position, that it is impossible to proceed using internal resources and that they have made efforts to limit the number of positions in their company requiring knowledge of a language other than French as much as possible. As of June 1, 2023, parties wishing to enter into a consumer contract in a language other than French, or, subject to various exceptions,6 a contract of adhesion that is not a consumer contract, must have received a French version of the contract before agreeing to it. Otherwise, a party can demand that the contract be cancelled without it being necessary to prove harm. As of June 1, 2023, the civil administration will be prohibited from entering into a contract with or granting a subsidy to a business that employs 25 or more people and that does not comply with the following obligations on the use of the French language: obtaining a certificate of registration, sending the OQLF an analysis of the language situation in the business within the time prescribed, or obtaining an attestation of implementation of a francization program or a francization certificate, depending on the case. As of June 1, 2023, all contracts and agreements entered into by the civil administration, as well as all written documents sent to an agency of the civil administration by a legal person or by a business to obtain a permit, an authorization or a subsidy or other form of financial assistance must be drawn up exclusively in French. As of September 1, 2022, a certified French translation must be attached to motions and other pleadings drawn up in English that emanate from a business or legal person that is a party to a pleading in Quebec. The legal person will bear the translation costs. The application of the provisions imposing this obligation has, however, been suspended for the time being by the Superior Court.7 As of September 1, 2022, registrations in the Register of Personal and Movable Real Rights and in the Land Registry Office, in particular registrations of securities, deeds of sale, leases and various other rights, must be made in French. Note that declarations of co-ownership must be filed at the Land Registry Office in French as of June 1, 2022. The lawyers at Lavery know Quebec’s language laws and can help you understand the impact of Bill 96 on your business, as well as inform you of the steps to take to meet these new obligations. Please do not hesitate to contact one of the Lavery team members named in this article for assistance. We invite you to consult the other articles concerning the modifications made to Quebec’s Charter of the French language: Trademarks and Charter of the French language: What can you expect from Bill 96? Amendments to the Charter of the French Language: Impacts on the Insurance Sector “Francization” refers to a process established by the Charter of the French language to ensure the generalized use of French in businesses. The OQLF is the regulatory body responsible for enforcing the Charter of the French language. The civil administration in this law includes any public body in the broad sense of the term. An employee who signed an individual employment contract before June 1, 2022, will have until June 1, 2023, to ask their employer to provide them with a French translation if the employee so wishes. If the individual employment contract is a fixed-term employment contract that ends before June 1, 2024, the employer is not obliged to have it translated into French at the request of the employee. Employers have until June 1, 2023, to have job application forms, documents related to work conditions and training documents translated into French if these are not already available to employees in French. Among these exceptions are employment contracts, loan contracts and contracts used in “relations with persons outside Quebec.” There seems to be a contradiction in the law with regard to individual employment contracts which are contracts of adhesion and for which the obligation to provide a French translation nevertheless seems to apply. Mitchell c. Procureur général du Québec, 2022 QCCS 2983.

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April 26, 2022

Bill C-18 (Online News Act): Canada looking to create a level playing field for news media

Earlier this month, Canadian Heritage Minister Pablo Rodriguez introduced Bill C-18 (Online News Act) in Parliament. This bill, which was largely inspired by similar legislation in Australia, aims to reduce bargaining imbalances between online platforms and Canadian news outlets in terms of how these “digital news intermediaries” allow news content to be accessed and shared on their platforms. If passed, the Online News Act would, among other things, require these digital platforms such as Google and Facebook to enter into fair commercial agreements with news organizations for the use and dissemination of news related content on their platforms. Bill C-18, which was introduced on April 5, 2022, has a very broad scope, and covers all Canadian journalistic organizations, regardless of the type of media (online, print, etc.), if they meet certain eligibility criteria. With respect to the “digital news intermediaries” on which the journalistic content is shared, Bill C-18 specifically targets online communication platforms such as search engines or social media networks through which news content is made available to Canadian users and which, due to their size, have a significant bargaining imbalance with news media organizations. The bill proposes certain criteria by which this situation of bargaining imbalance can be determined, including the size of the digital platform, whether the platform operates in a market that provides a strategic advantage over news organizations and whether the platform occupies a prominent position within its market. These are clearly very subjective criteria which make it difficult to precisely identify these “digital news intermediaries.” Bill C-18 also currently provides that the intermediaries themselves will be required to notify the Canadian Radio-television and Telecommunications Commission (“CRTC”) of the fact that the Act applies to them. The mandatory negotiation process is really the heart of Bill C-18. If passed in its current form, digital platform operators will be required to negotiate in good faith with Canadian media organizations to reach fair revenue sharing agreements. If the parties fail to reach an agreement at the end of the negotiation and mediation process provided for in the legislation, a panel of three arbitrators may be called upon to select the final offer made by one of the parties. For the purposes of enforceability, the arbitration panel’s decision is then deemed, to constitute an agreement entered into by the parties. Finally, Bill C-18 provides digital platforms the possibility of applying to the CRTC for an exemption from mandatory arbitration provided that their revenue sharing agreements meet the following criteria: Provide fair compensation to the news businesses for news content that is made available on their platforms; Ensure that an appropriate portion of the compensation would be used by the news businesses to support the production of local, regional and national news content; Do not allow corporate influence to undermine the freedom of expression and journalistic independence enjoyed by news outlets; Contribute to the sustainability of Canada’s digital news marketplace; Ensure support for independent local news businesses, and ensure that a significant portion of independent local news businesses benefit from the deals; and Reflect the diversity of the Canadian news marketplace, including diversity with respect to language, racialized groups, Indigenous communities, local news and business models. A bill of this scope will certainly be studied very closely by the members of Parliament, and it would not be surprising if significant amendments were made during this process. We believe that some clarifications would be welcome, particularly as to the precise identity of businesses that will be considered “digital information intermediaries” for the purposes of the Online News Act.

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