TEST - DALI EN

January 8, 2026

Back to the publications list

Written by

Eric Lavallée
Partner, Lawyer and Trademark Agent
Anaïs Martini
Lawyer

Stay abreast of breaking legal news

M’abonner

May 6, 2026

Eight partners recognized as leaders in Canada for their expertise in infrastructure, according to Lexpert

On May 6, 2026, Lexpert recognized the expertise of five of our partners in its 2026 Lexpert Special Edition:Infrastructure. Laurence Bich-Carrière, Jean-Sébastien Desroches, Christian Dumoulin, Nicolas Gagnon, Édith Jacques, Marc-André Landry, Ouassim Tadlaoui and André Vautour now rank among Canada’s leaders in supporting economic players in the infrastructure industry. Laurence Bich-Carrière, is a member of the Quebec and Ontario Bar Associations, Laurence Bich-Carrière practices within the Litigation and Dispute Resolution group, in a versatile civil and commercial litigation practice specializing in complex litigation (class actions, appeals, extraordinary remedies, private international law). Jean-Sébastien Desroches practises business law and focuses primarily on mergers and acquisitions, infrastructure, renewable energy and project development as well as strategic partnerships. He has had the opportunity to steer several major transactions—complex legal operations, cross-border transactions, reorganizations, and investments—in Canada and at an international level on behalf of Canadian, American, and European clients and international corporations and institutional clients in the manufacturing, transportation, pharmaceutical, financial, and renewable energy sectors. Christian Dumoulin is a partner in the firm’s Business Law Group. He served as Managing Partner of the Sherbrooke office from 2015 to 2023 and sat on the firm’s Board of Directors from 2015 to 2017, and again in 2024. He specializes in mergers and acquisitions, commercial law and real estate law, and acts as a business and strategic advisor to clients of all sizes. Recognized for his rigour and practical approach, he supports clients in complex transactions (reorganizations, financings, sales and acquisitions, shareholder disputes). He has also been advising on infrastructure projects for more than fifteen years, including public-private partnerships, as well as on all aspects of commercial real estate law. Nicolas Gagnon focuses his practice on construction law and suretyship. He counsels contractors, public and private sector clients, professional services firms as well as surety companies at every stage of construction projects. He advises clients on the public bidding and procurement processes and participates in the negotiation and drafting of contractual documents involving various project delivery methods, such as public-private partnership projects and design, construction, financing and maintenance contracts. In addition to advising various construction industry stakeholders on construction management and any claims that may arise, he also assists them with dispute resolution processes. Édith Jacques is a partner in the Business Law Group in Montréal. She specializes in mergers and acquisitions and commercial and international law. Édith acts as strategic business advisor for medium to large private companies. Marc-André Landry is a member of the Litigation and Conflict Resolution group and focuses his practice on commercial litigation. He frequently assists his clients in resolving their disputes through negotiation, mediation or arbitration, or before the various courts of law. Over the years, he has represented businesses in many sectors, including construction, real estate, renewable energy, conventional energy, new technologies, financial services and pharmaceuticals. Ouassim Tadlaoui is a partner in the firm’s Litigation and Dispute Resolution Group and focuses his practice on banking litigation, restructuring, bankruptcy and insolvency, as well as construction surety. He represents chartered banks and other financial institutions and alternative lenders as creditors, as well as certain debtors, in bankruptcy and restructuring proceedings. He also represents and advises surety companies, as well as national and international businesses, in insolvency, bankruptcy and restructuring matters in the construction industry. André Vautour practises corporate law and commercial law, and is specifically interested in corporate governance, strategic alliances, joint ventures, investment funds, and mergers and acquisitions of private companies. He also practises technology law (drafting technology development and transfer agreements, licensing agreements, distribution agreements, outsourcing agreements, and e-commerce agreements). About Lavery Lavery is the leading independent law firm in Quebec. Its more than 200 professionals, based in Montréal, Québec City, Sherbrooke and Trois-Rivières, work every day to offer a full range of legal services to organizations doing business in Quebec. Recognized by the most prestigious legal directories, Lavery professionals are at the heart of what is happening in the business world and are actively involved in their communities. The firm’s expertise is frequently sought after by numerous national and international partners to provide support in cases under Quebec jurisdiction.

Read more

Publications that might interest you

July 22, 2026

Supreme Court of Canada Maintains Dosing-Regimen Patent and Clarifies Patentability of Therapeutic Methods

On July 17, 2026, the Supreme Court of Canada (SCC) issued its decision in Pharmascience Inc. v. Janssen Inc., (2026 SCC 26), dismissing Pharmascience’s invalidity challenge to Janssen’s paliperidone palmitate dosing-regimen patent. While the majority of the SCC confirmed that a doctrine still exists in Canadian patent law under which a method of a medical treatment (MMT) is non-patentable subject matter, they affirmed the analysis and conclusions of the lower Courts that the claims of Janssen’s patent are not directed to a non-patentable MMT. Background Treatment of Schizophrenia entails lifelong management with antipsychotic medications, and the effectiveness of such treatment relies significantly on adherence to treatment regimens. A successful approach to improve treatment adherence has been the development of long-acting formulations, known as “depot formulations” or “long-acting injectables”, which gradually release the medication from the injection site and thus entail less frequent administration. Janssen developed such a long-acting injectable type of dosing regimen for the drug paliperidone palmitate for the treatment of Schizophrenia, marketed under INVEGA SUSTENNA. Janssen’s Canadian Patent No. 2,665,335 (the ‘335 Patent) relates to such a dosing regimen, under which the drug is administered as follows: Day 1: A first dose via deltoid injection; Day 8 ± 2 days: A second dose via deltoid injection; Monthly ± 7 days thereafter: Maintenance doses via deltoid or gluteal injection; Two regimens are defined depending on renal impairment status, with specified mg-eq doses. Pharmascience sought to invalidate the patent, arguing that the claims were invalid as impermissible methods of medical treatment. Procedural History Federal Court Pharmascience sought to obtain marketing approval or a “Notice of Compliance” to market a generic version of INVEGA SUSTENNA. Under Canada’s pharmaceutical patent linkage regime, this led to proceedings before the Federal Court in which Pharmascience alleged invalidity of the patent. In its decision of August 23, 2022 (2022 FC 1218), the Federal Court (FC) upheld the validity of the ‘335 Patent. Federal Court of Appeal On February 1, 2024 (2024 FCA 23), the Federal Court of Appeal (FCA) affirmed the FC’s decision and again upheld the validity of the ‘335 Patent. In its analysis, the FCA established that in order to determine whether a claim is directed to an unpatentable MMT, the key inquiry is whether practising the invention calls for the exercise of professional skill and judgment. The FCA drew a distinction between: skill and judgment applied in deciding how to use a treatment, which points to an unpatentable MMT; and skill and judgment applied in deciding whether to use a treatment, which does not, on its own, indicate an unpatentable MMT. Each case turns on its specific facts and the onus remains on the party attacking the patent to establish that the claim encompasses an unpatentable MMT. Pharmascience then sought leave to appeal to the SCC, where the sole issue being assessed was patentable subject matter - whether the claims impermissibly claim a MMT and do not comply with section 2 (definition of “invention”) of the Patent Act. Supreme Court The SCC maintained that a doctrine still exists in Canadian patent law under which MMTs are non-patentable subject matter. This doctrine is primarily attributable to the 1972 decision of the SCC in the Tennessee Eastman1 case, at which time it was only possible to patent a drug based on its method of manufacture, not as a pharmaceutical substance per se, as per former section 41(1) of the Patent Act. Following the repeal of former section 41(1), it has been argued that the rationale of Tennessee Eastman hinged on this repealed section and therefore the principles established in Tennessee Eastman should no longer apply. The majority of the SCC now confirms that the rule against patenting MMTs does not rest on former section 41(1) alone and continues to apply, grounded in the long-standing broader principle that “professional skills” are not patentable. The SCC also affirmed that the ‘335 Patent’s dosing regimen claims do not monopolize professional medical skill and judgment in their implementation and thus do not relate to an unpatentable MMT. The appeal was therefore dismissed and the patent upheld on this ground. The majority’s test: when does a claim cross the line into an MMT? A patent impermissibly claims an MMT only if it seeks to monopolize professional medical skill and judgment - i.e., if it “fences in” an area of medical treatment. The analysis is purposive and substance-over-form; it turns on the claims and the evidentiary record. The majority offered three non-exhaustive guideposts: Focus on the claimed subject matter, not on the fact that doctors exercise judgment in choosing whether to use it for a particular patient. Clinical judgment in selecting/monitoring treatment generally does not make the invention unpatentable. Individualization increases risk: the more the claim requires tailoring to individual patient characteristics, the more likely it is an MMT. Ordinary-course professional development: the more the claimed subject matter is the kind of thing physicians would be expected to develop/improve as part of practice (without patent incentives), the more likely it is an MMT. Fixed vs. variable dosage is not dispositive. While past Court decisions focused on fixed vs. variable dosages or timing of administration to be determinative factors, the SCC rejected such a categorical bright line; at most, variability may be an evidentiary proxy tied to the central “skill and judgment” question. Application to Janssen’s dosing regimens The majority affirmed the lower Courts’ key findings that: Once the regimen is selected, no professional skill/judgment is required to implement it as claimed. The renal-impairment split reflects an objective distinction and does not meaningfully constrain professional judgment. The ± dosing windows and alternate injection sites were supported by evidence as clinically interchangeable / operational flexibility without clinical implications. Result: the claims were not framed (in substance) as fencing in physicians’ clinical decision-making; they were treated as patentable subject matter. Concurring reasons While all of the Justices agreed on the result, two of the Justices disagreed on the doctrine and would have gone further. They: Disagreed that MMTs are inherently non-patentable subject matter; Would re-examine/overrule Tennessee Eastman and assess MMT claims like any other invention as defined in the Patent Act, with many failing instead under utility/operability/reproducibility/control concepts (rather than under a subject-matter exclusion). Despite that doctrinal divergence, they agreed that the ‘335 Patent is valid. Practical Takeaways MMT exclusion remains the majority rule: claims that effectively fence in clinical decision-making remain vulnerable on subject-matter grounds. Dosing regimen patents remain viable: evidentiary record and claim substance will be critical - particularly around whether implementation requires individualized clinical judgment. No bright-line “fixed vs. range” rule: Rather, the actual role of medical skill/judgment in practicing the claimed regimen is key. Overall, the SCC’s decision appears to fall in a middle ground between the positions advanced by the parties: confirming a doctrine of non-patentability of MMTs while at the same time confirming the patentability of dosing-regimen-based inventions depending on the facts of a given case, and as a result upholding the validity of the ‘335 Patent. Tennessee Eastman Co. et al. v. Commissioner of Patents, [1974] SCR 111.

Read more
July 16, 2026

Imminent demise of non-compete clauses for federally regulated employers

On May 6, 2026, the Minister of Finance and National Revenue tabled Bill C-31, entitled A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025.1 Bill C-31 proposes significant amendments to the Canada Labour Code2 (the “Code”) to prohibit non-compete clauses, by an approach comparable to that adopted in Ontario. However, the federal legislator is going further than its Ontario counterpart by granting itself the authority to potentially prohibit other types of restrictive covenants—such as non-solicitation clauses—through regulations. Among the key measures enacted by the federal legislator is a prohibition against imposing non-compete clauses on federally regulated employees, subject to two categories of exceptions. The stated objective is to promote employee mobility, reduce certain forms of abuse associated with post-employment restrictions and stimulate competition in the labour market.3 This legislative approach aligns with current trends across the globe restricting non-compete clauses in the world of employment law. Definitions A “non-compete clause” means a term or condition of employment, or a clause in an agreement, that prohibits an employee from engaging in any business, work, occupation or trade, profession, project or other activity that is in competition with the employer’s federal work, undertaking or business after the employee ceases to be employed’4 This definition is broad and potentially encompasses non-compete clauses included in documents that are not employment contracts, such as a long-term incentive plan. The Bill also defines an “other employment-related restriction” as “a term or condition of employment, or a clause in an agreement, that is not a non-compete clause and is part of a class specified in the regulations.”5 Scope and proposed changes Division XI.1, slated to be incorporated into Part III of the Code through the Bill, prohibits an employer from entering into a non-compete clause with an employee or a union.6 It also prohibits imposing such a clause on an employee, in particular by inducing them to agree to one. The Bill also provides for the nullity of clauses subject to this prohibition.7 For now, the prohibitions imposed by the Bill only apply to non-compete clauses. The federal government may, however, through regulation, define “other employment-related restrictions” to make the prohibitions apply to them, further limiting the ability of employers to safeguard their legitimate interests, such as their goodwill. Exceptions The law provides for two main categories of exceptions. First, the prohibition would not apply to a person who, after leasing or transferring all or part of their work, undertaking or business to an employer, including by sale or merger, becomes an employee of that employer and agrees to a non-compete clause or employment-related restriction in that context, when the business is or becomes a federal enterprise as a result of the transaction.8 Second, it would not target the chief executive officer9 nor certain senior management employees reporting directly to the chief executive officer and holding the position or performing the functions of president, chief operating officer, chief financial officer, chief human resources officer, chief information officer, chief technology officer or chief legal officer. The exception for senior management employees is subject to two conditions: 1) The person reporting directly to the chief executive officer must be the only one to hold or perform the functions of the aforementioned positions, and 2) they must be a “manager” within the meaning of section 167(3) of the Code.10 The legislator also reserves the right to add excluded positions by regulation. Other provisions included in the Bill The Bill introduces a prohibition on retaliation, preventing an employer from reprimanding or penalizing an employee for refusing to agree to a non-compete clause.11 It also provides for a reversal of the burden of proof. The employer will have the burden of demonstrating that a condition of employment or stipulation does not constitute a non-compete clause or, if it does, that it is not null.12 The path to enactment13 Bill C-31 was tabled on May 6, 2026. On June 3, 2026, the second reading was passed in the House of Commons and the Bill was referred to the Standing Committee on Finance. It still needs to pass the third reading and the process in the Senate before royal assent. Coming into force is scheduled for a day to be fixed by order of the Governor in Council. Once the law comes into force, federally regulated employers will no longer be permitted to require employees to enter into non-compete clauses, subject to the exceptions provided in the Bill. Non-compete clauses existing at the time the law comes into force will remain valid for one year and will only become null after the grace period expires. Employers would be well advised to immediately begin developing alternative strategies to mitigate the upcoming prohibition of non-compete clauses for employees who are currently bound by such clauses. Practical recommendations Here are some practical recommendations to help federally regulated organizations both comply with this new legal framework and protect their legitimate interests: Review existing restrictive covenants within in your organization A comprehensive review of employment contracts and other relevant contractual documents is crucial to identify non-compete and other restrictive covenants currently in force within your organization. The review should not be limited to employment contracts alone—it should also extend to any other program, policy or document containing restrictive covenants, including short-term or long-term incentive plans, such as stock option plans. Any atypical non-compete clause, such as one providing for the cancellation of stock options or units if the participant joins a competing business, should also be listed, as it may fall within the scope of the law. Because we do not yet know how the new restrictions will be interpreted, a broader review is more prudent at this stage. Assess your organizational structure Given the well-defined exceptions provided for by the law, organizations would do well to review their organizational structure to identify the individuals who may be bound by a non-compete clause and ensure that the corresponding legislative requirements are met. Exercise increased caution in commercial transactions Greater caution is required in the context of commercial transactions to ensure that contractual documents are compatible with the exception established by the law. Identify alternative contractual strategies What many employers have done in Ontario is use non-solicitation clauses and confidentiality agreements. This could be a good option to proportionately protect the legitimate interests of a federally regulated organization while preserving employee mobility. However, the federal government may limit this contractual strategy by prohibiting other types of restrictive covenants through regulation. In certain circumstances, garden leave clauses, which we do not believe to be restrictive covenants under Quebec civil law,14 are certainly options to consider for some employees of federally regulated organizations. Monitor ongoing legislative updates We recommend implementing an internal or external monitoring strategy, through your legal counsel, to track the progress of the Bill and any regulations that the federal government may adopt under it. Our Labour and Employment Law group will closely follow all developments related to Bill C-31. We remain at your disposal to answer any questions you may have regarding these changes and provide innovative strategic advice to protect your legitimate interests under this new legal framework. A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025., Bill C-31 (first reading – May 6, 2026), 1st Session, 45th Legislature. Can., section 9. R.S.C. 1985, c. L.-2. Department of Finance Canada, Minister Champagne introduces second piece of legislation to implement Budget 2025: Canada Strong, online: Minister Champagne introduces second piece of legislation to implement Budget 2025: Canada Strong - Canada.ca. A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025, Supra, note 1, s. 237.1. Id. Id., s. 237.2(1). Id., s. 237.2(2). Id., s. 237.2(3)(a). Id., s. 237.2(3)(b). Id., s. 237.2(3)(c). Id., s. 237.3. Id., s. 237.4. Parliament of Canada, A second Act to implement certain provisions of the budget tabled in Parliament on November 4, 2025, online: C-31 (45-1) - LEGISinfo - Parliament of Canada. Maude Grenier and Frédéric Desmarais, “Quand la clause de jardinage tombe dans le terrier du lapin civiliste : Alice est-elle au pays des merveilles ? Histoire d’une clause possiblement restrictive,” in Service de la qualité de la profession du Barreau du Québec, Développements récents en droit du travail (2020), Cowansville, Yvon Blais, 2020, p. 185.

Read more
July 8, 2026

Generous Federal Investment Tax Credits for Clean Energy Projects

In 2021, the federal government introduced a series of refundable investment tax credits (the “ITCs”) to accelerate the transition to a low-carbon economy, stimulate economic growth, and support innovation. The Spring Economic Update 2026 confirms the growing importance of these measures. In particular, it announces that the Canada Revenue Agency (the “CRA”) will give increased priority to requests for advance rulings regarding eligible clean energy projects. In this regard, the CRA plans to increase its capacity to process these applications by more than 4.5 times by July 2026. In this context, two measures are of particular note: the Clean Technology ITC and the Clean Electricity ITC. 1. The Clean Technology ITC The Clean Technology ITC generally applies to certain capital investments in equipment and systems that contribute to the production of clean energy, the improvement of energy efficiency, and the reduction of greenhouse gas emissions, provided that such assets are acquired and used in Canada in accordance with the applicable criteria. This refundable credit can reach up to 30% of the capital cost of eligible property. It thus serves as a significant financial lever, helping to strengthen liquidity and improve project profitability, particularly during the early years. In practice, the analysis required to apply for this credit focuses primarily on the following elements: the entity’s eligibility (including its status as a taxable Canadian corporation); the property’s qualification (eligible category, function, and use); the timeline (dates of acquisition, installation, and commissioning); the impact of labour requirements, which may influence the applicable rate; interaction with other tax credits. The application period covers property acquired and that becomes available for use between March 28, 2023, and December 31, 2034. 2. The Clean Electricity ITC The Clean Electricity ITC is another measure that is gaining importance. It is of particular interest in structures where the investor (or certain investors) is tax-exempt or belongs to categories of entities for which several clean economy ITCs have historically been less accessible. Indeed, this credit is designed to be accessible to a broader range of entities, including notably (according to the proposed definitions) certain eligible trusts, designated provincial or territorial Crown corporations, corporations principally owned by municipalities, as well as entities affiliated with Aboriginal governments. At this stage, the government has published legislative proposals accompanied by explanatory notes, and the CRA has recently consolidated the relevant information on this subject on its website. Notably, it appears that: the credit would provide a base rate of 15% of the capital cost of eligible clean electricity-related property; eligibility would apply to property used primarily to generate, store, or transmit electricity, subject to technical and environmental criteria; the rate could be reduced in the event of non-compliance with certain labour requirements; the proposed application period would cover investments made from April 2024 and that becomes available for use on or before December 31, 2034. 3. Structuring: Corporation or Limited Partnership Beyond the technical eligibility of the property, the legal structure chosen for a project will have a decisive impact on the ability to claim ITCs and pass on their economic value to investors. In some cases, a taxable corporation is simpler to administer and more easily meets the eligibility criteria. Conversely, a limited partnership (“LP”), while useful for certain financing objectives, presents several disadvantages in the context of ITCs: 3.1 Constraints Related to Investors’ Tax Status Certain tax credits—particularly the Clean Technology ITC, often considered one of the most advantageous—are naturally better suited for taxable investors. When an LP has non-taxable members, converting the tax benefit into economic value may be less optimal, depending on how the credit is allocated and used. 3.2 Allocation of Credits and Limits for Limited Partners The rules governing credits within a partnership generally require that the allocation to each partner be reasonable, taking into account, in particular, their capital investment and contribution. Furthermore, for a limited partner, the share of the credit may be limited by “at-risk” rules, which cap certain tax benefits based on actual economic exposure. In practice, this can reduce the amount of credit available and limit allocation flexibility. 3.3 Increased Complexity of Monitoring and Compliance An LP generally entails heavier administrative obligations: calculating at-risk amounts, tracking allocations, documenting contributions and distributions, and ensuring consistency between the partnership agreement, financing agreements, and tax positions. This complexity can become a significant issue in the event of a tax audit. Conclusion Federal ITCs represent a major financial incentive for clean energy projects. However, their application depends on technical, tax, and structuring criteria that must be rigorously analysed and documented. Furthermore, the legislative framework governing these credits is constantly evolving (implementing regulations, administrative guidelines, and technical requirements), making a case-by-case analysis essential to confirm eligibility and optimize a project’s structure. We invite you to contact our tax team. We would be happy to assist you in successfully bringing your project to completion. Key Takeaways A Major Administrative Acceleration by July 2026 The CRA is making clean energy a priority: its capacity to process advance tax ruling requests will increase by more than 4.5 times by July 2026. For proponents, now is the time to act to secure early tax certainty. Two Powerful Financial Levers with Distinct Criteria Clean Technology: A major refundable credit of up to 30% of capital costs, primarily targeting taxable Canadian corporations. Clean Electricity: A refundable credit of up to 15% of capital costs structured to include entities that were historically restricted, such as Crown corporations, municipalities, and Indigenous organizations. Legal Structuring Can Make or Break Your ITCs Choosing the right legal vehicle is just as critical as technical asset eligibility. While popular for financing, LPs introduce significant complexity due to "at-risk" rules, the involvement of non-taxable partners, and a heavy compliance burden during tax audits.

Read more
July 2, 2026

Bill 10: Significant amendments to the Consumer Protection Act and heightened risk for merchants

The Act to protect consumers against abusive practices in ticket reselling and online subscription renewal (“Law 10,” formerly Bill 10, “Bill 10”) was adopted on June 11, 2026, and assented to on June 12, 2026. Law 10 is part of the legislature’s efforts to strengthen Quebec’s consumer protection regime. It will come into force on September 12, 2026. However, certain provisions took effect as soon as June 12, 2026, in particular section 10, which provides for the addition of new section 272.1 to the Consumer Protection Act (“CPA”). Some measures in Law 10 are aimed at commercial transparency and making the consumer experience more straightforward. Others, such as the introduction of the new section 272.1 of the CPA, are likely to substantially reconfigure consumer law in Quebec. The Parliamentary Committee significantly amended Bill 10 during its detailed review on May 7, 2026. The most consequential amendment was making the new section 272.1 of the CPA “declaratory,” overriding the Court of Appeal’s interpretation in Union des consommateurs c. Air Canada, 2025 QCCA 480,1 currently under appeal before the Supreme Court of Canada. Ticket reselling: stricter rules focused on disclosure Law 10 introduces a structured regime for ticket resale platforms without prohibiting the business model. The focus is on the quality of information provided to consumers. These requirements will take effect on September 12, 2026. The new provisions impose a transparency requirement from the moment consumers access a website and throughout the entire transaction process. They must be informed that they are using a resale platform—and not dealing directly with the original seller—and must be given clear information about the type of ticket, its original price and applicable terms and conditions. With this provision, the legislature is requiring that prices be broken down rather than banning certain fees. The chosen model continues to allow commercial flexibility, provided that the price structure is fully disclosed. Contracts involving sequential performance: tighter regulation of the contract lifecycle Law 10 also introduces new requirements regarding contracts involving sequential performance, in particular online subscriptions. These requirements will take effect on September 12, 2026. The law requires merchants to provide a cancellation mechanism that is not only accessible, but also designed not to create an undue obstacle. In addition, merchants are required to notify consumers before the end of a promotional period or before a new price takes effect. Note: The requirement to provide notice before the end of a free or discounted period does not apply to contracts already in effect as of September 12, 2026. These provisions reflect a desire to tighten control over the performance of contracts, rather than just their formation. For merchants, this means they need to review their digital interfaces and internal processes to ensure ongoing compliance. Beyond technical adjustments, there is also a litigation risk, as these new obligations could serve as grounds for legal action under the CPA, especially when the cancellation mechanism is perceived as difficult or hard to access. Clauses prohibiting consumer reviews Law 10 also prohibits provisions that prevent consumers from publishing or communicating reviews of a good or service, or of the merchant’s conduct. This prohibition took effect on June 12, 2026. It aims to eradicate contractual practices that restrict consumers’ freedom of expression in the digital environment. The decision in Union des consommateurs c. Air Canada, 2025 QCCA 480, and the new section 272.1 of the CPA In its decision rendered on April 22, 2025, in Union des consommateurs c. Air Canada, the Court of Appeal reiterated that a merchant who advertises a partial price and then demands a higher price at the time of payment violates section 224 of the CPA, which requires that the advertised price reflect the total amount payable. The Court acknowledged that a violation such as this may give rise to the remedies provided for in section 272 of the CPA, particularly because of the presumption of fraudulent effect2. It concluded that the practice of breaking down the price is likely to influence consumer behaviour and may, as such, trigger the application of the presumption. However, the Court of Appeals refused to automatically award compensation equal to the difference between the advertised price and the price paid. It stressed that, despite the applicable presumption, the consumer must demonstrate quantifiable harm, in accordance with the general principles of civil law. It thus cast aside the notion that a violation of the CPA must automatically result in restitution. The Court also pointed out that the remedies provided for in section 272 of the CPA are compensatory in nature and must not result in the consumer’s enrichment. It did, however, award $10 million in punitive damages for the conduct in question, deeming it vital to deter its repetition. This decision aligns with the balance set out in Fortin c. Mazda Canada Inc., 2022 QCCA 6353 and other rulings, namely that the seriousness of violations of the CPA must be recognized, but damages must still be proven. It is precisely this balance that the new section 272.1 of the CPA, as amended on May 7, 2026, calls into question. In its final form, section 272.1 of the CPA provides that a merchant who demands payment of a sum in violation of the CPA must refund that sum, regardless of whether a service was provided in return. What is crucial here, however, is the fact that the provision was made declaratory. By doing so, the legislature has reaffirmed what it considers to be the true state of the law, effectively overriding the Court of Appeal’s interpretation in Air Canada. The legislature’s position directly challenges the conclusion that restitution is not automatic but contingent on proof of prejudice. The term “declaratory” paves the way for the immediate—or even retroactive—application of this remedy. For merchants, the implications are considerable. Section 10, which adds section 272.1 to the CPA, came into force immediately on assent. As a result, it will likely—in some cases—nullify or render largely ineffective one of the main defences recognized by the Court of Appeal, namely the argument based on the absence of quantifiable prejudice. The scope of the new section 272.1 of the CPA is even more impactful given that the appeal of the decision in Air Canada is currently pending before the Supreme Court of Canada, with leave having been granted on February 5, 2026. The legislature thus intervened even as the country’s highest court is set to rule on the scope of remedies under the CPA. Conclusion The adoption of Bill 10, and it subsequent assent, marks significant turning point for merchants subject to the Consumer Protection Act. The law will mainly come into force on September 12, 2026, but certain provisions, including the new article 272.1 of the CPA and the prohibition of certain clauses targeting consumer notices, came into force on June 12, 2026. While the new rules governing the resale of tickets and contracts involving sequential performance primarily impose stricter operational requirements, the new section 272.1 of the CPA more directly affects the core of civil liability for merchants. By casting the Court of Appeal’s approach in Air Canada aside, the legislature has established a more automatic restitution regime, which is likely to significantly heighten financial and litigation risks for merchants. The progress of the case before the Supreme Court will need to be closely monitored, as the Court will be called upon to clarify the relationship between this legislative intervention and the principles applicable to remedies under the CPA. In this context, businesses would be well advised to (i) assess the immediate impact of section 272.1 of the CPA on their pricing practices and the risks arising therefrom and (ii) review their business practices, transactional interfaces and contractual documentation by September 12, 2026, to anticipate the entry into force of the other provisions of Law 10. If you have any questions or wish to discuss the impacts of Law 10 on your business, we invite you to contact members of Lavery’s commercial litigation team. Takeaways 1. Entry into force: two dates to remember Law 10 was adopted on June 11, 2026, and assented to on June 12, 2026 Entry into force of most provisions: September 12, 2026, but some measures have already been in effect since June 12, 2026, including the new section 272.1 of the CPA and the prohibition of clauses preventing consumer reviews. 2. New operational obligations to come into force on September 12, 2026 Ticket resale The provisions focus on disclosure, such that the consumer must: Be informed that they are using a resale platform Be given clear information about the ticket, its original price, and any terms and conditions Be given a price breakdown, as fees are not prohibited but must be itemized Contracts involving sequential performance and online subscriptions The cancellation mechanism must genuinely be accessible, without undue obstacles. Notice must be given before the end of a promotional or free period and before a new price takes effect. The notice regarding a free or discounted period coming to an end does not apply to contracts already in effect on September 12, 2026. 3. Heightened risk for merchants with the change in section 272.1 of the CPA opening the door to legal action The new section 272.1 of the CPA provides that a merchant who demands payment of a sum in violation of the CPA must refund that sum, regardless of whether a service was provided in return. Most importantly, the provision is made “declaratory” to depart from the Court of Appeal’s approach in Union des consommateurs c. Air Canada (2025 QCCA 480), significantly limiting defences based on the absence of quantifiable harm and opening the door to immediate and even retroactive application, increasing the financial and legal risk. 2025 QCCA 480 (CanLII) | Union des consommateurs c. Air Canada | CanLII Richard c Time, 2012 SCC 8 2022 QCCA 635 (CanLII) | Fortin c. Mazda Canada inc. | CanLII

Read more