Restrictive Covenants vs. the Right to Practise: What the Court of Appeal of Quebec’s Rulings Mean for Health Care Professionals

September 3, 2026

Restrictive covenants are frequently included in contracts that govern business practices and relationships. They are intended to protect the legitimate interests of the parties, such as goodwill, confidential information, team stability and—more broadly—the value of a business.

That said, more often than not, restrictive covenants that apply to health care professionals need to be modified. A so-called “professional-patient” relationship differs from an ordinary business relationship, as a clientele consisting of patients has its own distinct characteristics. Indeed, the Court of Appeal of Quebec has repeatedly reiterated that restrictive covenants—namely non-compete and/or non-solicitation clauses—cannot, directly or indirectly, compromise the continuity of care or restrict a patient’s free choice. Therefore, the analysis must extend beyond financial protection alone to include public order considerations relating to access to care and continuity of care.

The challenge thus lies in drafting clauses that are both useful and enforceable. This requires a focus on what actually needs to be protected, while avoiding restrictions that would dissuade a health care professional from continuing treatment or prevent patients from receiving care from their physician of choice.

The most common restrictive covenants

The purpose of a non-compete clause is to prevent individuals from engaging in competing activities after a contractual relationship has ended. With regard to employment, article 2089 of the Civil Code of Québec¹ requires that the clause be limited as to time, place and type of employment, to what is necessary for the protection of the legitimate interests of the party in whose favour the “protection” is established.²

A non-solicitation clause does not necessarily target the practice of the profession as such, but rather actions intended to actively attract individuals or entities associated with the business, including patients, referrals or employees. Although it is often presented as less intrusive, it can nonetheless have effects comparable to those of a non-compete clause if it is worded so broadly that it effectively prevents a professional from seeing patients who wish to be under their care.

Unique characteristics of the health care sector: patients, continuity of care and public order

One particular restriction applies in the health care sector: a non-compete clause must neither treat patients as a commercial asset nor place the professional in a position of having to choose between: (i) complying with the clause; or (ii) ensuring the continuity of care required by a patient’s medical condition. Patients are not parties to the contract between the employer, the clinic or the purchaser and the health care professional, and are not considered objects in commerce.³ It is therefore risky to attempt to govern their conduct by way of a contract, as if they were parties to the agreement.⁴

It should be noted that this premise is considered when covenants are assessed.⁵ The law and various codes of ethics generally require professionals, in particular, not to “abandon” a patient, to ensure a secure transfer of records, and to uphold—within the limits of the regulatory framework—the patient’s freedom to choose their service provider.⁶ The contract, therefore, cannot be drafted as though the protection of goodwill alone justified restrictions that compromise continuity of care.

Jurisprudential insights from the Court of Appeal of Quebec

Where a health care professional practises at a clinic, a non-compete clause between the clinic and the professional must not prevent a patient from continuing to receive care from the professional of their choice should the patient-professional relationship be terminated. A clause that violates this rule is especially vulnerable to being deemed invalid if it directly or indirectly prohibits practitioners from treating or taking on patients connected to a clinic—particularly where it makes no exceptions for emergency care or the continuation of treatment.⁷ Thus, a clause that prohibits treating former patients of a clinic or accepting patients “originating” from it, with no exceptions—particularly regarding ongoing care—may exceed what is required to protect goodwill and may conflict with the continuity of care. Similarly, a non-solicitation clause that treats the mere act of responding to a patient’s request as solicitation may, in practice, turn a prohibition on solicitation into a prohibition on providing treatment,⁸ which should be avoided.

The issue does not lie solely in explicit prohibitions. It can also stem from a mechanism designed to deter professionals from accepting patients in order to avoid penalties. In this regard, a penalty clause triggered by the act of treating a patient may exert economic pressure that could affect the patient’s choice and the continuity of care, even if the provision does not expressly refer to the discontinuation of care.⁹

Professional context vs. commercial context

From a structuring perspective, one often useful approach is to draw a clear distinction between clinical practice and commercial involvement.¹⁰ A prohibition against providing clinical care is the measure that most directly affects the continuity of care, as it prevents the professional from providing care precisely when a patient wishes to continue treatment.¹¹ The stronger the pre-existing therapeutic relationship and the longer the course of treatment, the greater the risk of hindering the patient’s freedom of choice and the continuity of care.¹² In other words, discontinuing treatment is generally more problematic in long-term care (e.g., orthodontics, psychiatry) than in one-off procedures (e.g., dental cleanings). Where restrictive covenants result in the disruption of the continuity of care, their consequences are too serious to be left to the vagaries of the market.¹³

Conversely, certain restrictions relating to the leadership, management, operation or control of a competing business may sometimes be more justifiable where they protect a specific legitimate interest without actually preventing the continuity of care. While this approach does not ensure a clause’s validity, it does reduce the likelihood that the clause will be deemed invalid, provided that the clause is carefully worded in terms of time limit, scope and definition of protected activities, and that it accurately reflects what is actually observed in clinical practice.

Five recurring issues with drafting

Territory

The issue of territory continues to come up frequently as a point of contention. In health care, territory must be defined based on the actual service area and the legitimate interest to be protected, while considering the impact on access to care.¹⁴ A territory that is too big could mean less services,¹⁵ particularly in specialized fields, whereas a territory that is too small could render the clause commercially ineffective.¹⁶ It is also important to note that territorial scope must be assessed on a case-by-case basis. A standard clause provided by a recognized association may even be deemed ineffective if it does not reflect the legitimate interests of the business in question.¹⁷ That said, even in the absence of an established territory, a restrictive clause may be valid, provided that the target clientele is clearly defined.¹⁸

Time limit

The time limit must be clearly established and reasonable. A clause with no time limit—or one with an ambiguous start date—is particularly problematic.¹⁹ Even where the time limit has been clearly established, it must be based on a defensible business rationale and must not exceed what is necessary, especially where the restriction affects clinical practice rather than specific conduct.

Activities

The definition of prohibited activities is often crucial. Broadly worded provisions—such as a general prohibition against providing “similar” services—become difficult to enforce without conflicting with clinical requirements.²⁰ In practice, it is generally more prudent to focus on identifiable and verifiable conduct rather than prohibiting a physician from treating a patient who wishes to be under their care. Where treatment is ongoing, it may be necessary to include an explicit provision regarding continuity of care to reduce the likelihood that the clause will be deemed invalid.²¹

Non-solicitation clause

A non-solicitation clause requires a particularly careful definition of the concept of “solicitation”. A non-solicitation clause that would prevent a professional from earning a living would likely be deemed invalid and unreasonable.²² The recurring point of contention remains the distinction between actively and specifically trying to attract patients, and responding to a patient’s request to seek care from a particular professional. The degree of precision in targeting the clientele is also very important.

Penalty clause

The penalty clause must be handled with caution. In a health care context, the amount of a penalty or the form it will take can dissuade professionals from continuing treatment. Imposing a penalty simply for providing treatment—regardless of whether active solicitation or unfair conduct²³ occurred—could be perceived as indirect coercion that infringes the patient’s freedom of choice.²⁴ The penalty is more likely to fulfill its purpose when it targets specific and quantifiable acts, while remaining proportionate to the anticipated commercial prejudice.

It is also important to note that if any one of these analytical criteria is deemed unreasonable, that alone may be sufficient to render the restrictive covenant invalid in its entirety.²⁵

Conclusion

The rulings of the Court of Appeal of Quebec²⁶ underscore a crucial point, namely that the protection of goodwill or an investment, however legitimate it may be, cannot result in a restriction on a patient’s freedom of choice or in an infringement—indirect or otherwise—on the continuity of care. When drafting clauses, the soundest approach is generally to target conduct that is genuinely problematic from a business perspective—such as active solicitation, the use of confidential information and unfair competition—rather than imposing a general prohibition against treating patients.

Where more significant restrictions are being contemplated, distinguishing between clinical practice and commercial involvement may help reduce the likelihood that the clause will be found invalid, provided that it remains reasonable as to duration, territory and scope of activities, and that it is consistent with the clinical imperatives established by case law.

The content of this article is published for general information purposes only and should not be construed as constituting a legal opinion or legal advice. Be sure to contact a member of our team for advice specific to your situation.

CCQ-1991.
Payette c. Guay inc., 2013 CSC 45, para. 61.
Mirarchi c. Lussier, 2007 QCCA 284, para. 46.
Mirarchi c. Lussier, para. 43.
Mirarchi c. Lussier, 2007 QCCA 284, para. 27.
Mirarchi c. Lussier, 2007 QCCA 284, para. 29-35.
Mirarchi c. Lussier, 2007 QCCA 284, para. 50-53.
Pitl c. Grégoire, 2018 QCCA 1879.
Mirarchi c. Lussier, 2007 QCCA 284, para. 52.
Mirarchi c. Lussier, 2007 QCCA 284, para. 35.
Mirarchi c. Lussier, 2007 QCCA 284, para. 29.
Mirarchi c. Lussier, 2007 QCCA 284, para. 49.
Mirarchi c. Lussier, 2007 QCCA 284, para. 51.
Gestion Philippe Girard inc. c. Clinique de réhabilitation prosthodontique de Québec inc., 2022 QCCA 1146, para. 103.
Gestion Philippe Girard inc. c. Clinique de réhabilitation prosthodontique de Québec inc., 2022 QCCA 1146, para. 104.
Pitl c. Grégoire, 2018 QCCA 1879, para. 60.
Pitl c. Grégoire, 2018 QCCA 1879, para. 64-69.
Services financiers Bertrand Lapointe inc. c. Groupes financiers Claude Grefford inc., 2026 QCCA 98, para. 9.; Payette c. Guay inc., 2013 CSC 45.
Pitl c. Grégoire, 2018 QCCA 1879, para. 79.
Gestion Philippe Girard inc. c. Clinique de réhabilitation prosthodontique de Québec inc., 2022 QCCA 1146, para. 102 and 104.
Théberge c. Lévesque, 2007 QCCA 898, para. 52.
Pitl c. Grégoire, 2018 QCCA 1879, para. 43.
Théberge c. Lévesque, 2007 QCCA 898, para. 59.
Théberge c. Lévesque, 2007 QCCA 898, para. 54.
Pitl c. Grégoire, 2018 QCCA 1879, para. 70-71.
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Marlene Poullas
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July 15, 2026

Canadian Lawyer –-The Family Law group is ranked in the “Top Family Law Firm Teams 2026” listing

Lavery is proud to announce that its Family Law Group has been recognized in Canadian Lawyer magazine’s Top Family Law Firm Teams 2026 ranking. This recognition stems from a rigorous selection process, based on nominations from readers, legal associations and editorial contributors, followed by an evaluation by an independent panel of seasoned family law practitioners from across Canada. This recognition belongs to the entire team. Congratulations to all members of the Family Law group: Victoria Cohene, Isabelle Duval, Caroline Harnois, Awatif Lakhdar, Elisabeth Pinard, Kassandra Roberge, Adnana Zbona, Gabrielle Dickins, Gabrielle Gallio and Aurélie Ouellet

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August 7, 2026

Obligation to provide advance disclosure of evidence in grievance arbitration: first ruling on section 100.3.1 of the Labour Code

On October 28, 2025, the government passed An Act to improve certain labour laws,1 also referred to as Bill 101. The reform has the stated objective of improving efficiency in grievance arbitration, in particular by reducing processing times, implementing a more structured case management system, and ensuring more thorough case preparation. The explanatory notes expressly state the intention to “determin[e] the rules relating to the communication of evidence before the hearing of the grievance.”2 In this context, the Labour Code3 was amended to introduce, among other things, section 100.3.1, which now requires parties to disclose in advance the evidence they intend to present, as well as the list of witnesses: 100.3.1. The party that intends to produce an exhibit or other evidence at the hearing must provide a copy of it to the other parties and the arbitrator within the time agreed upon at the pre-hearing conference or at least 30 days before the beginning of the hearing, except in an urgent situation or unless otherwise decided to ensure the proper administration of justice. The party must, in the same manner, provide a list of the witnesses it intends to call and a list of those whose testimony it intends to present in the form of affidavits, unless there is valid cause not to disclose their identities. The party must also file with the arbitrator proof that the copy has been provided to the other parties. This change has significant practical implications. For decades, the issue of advance disclosure of evidence in grievance arbitration has given rise to conflicting jurisprudence. A majority view held that the arbitrator could not require a full exchange of evidence outside the hearing, while a minority view recognized a broader scope for intervention in the interest of fairness and the proper administration of justice.4 Several authors have criticized the role of surprise in arbitration. They found that a lack of advance disclosure leads to unnecessary debates, causes delays and adjournments, and contributes to making the process more cumbersome. Author and arbitrator Marc Mancini aptly summarizes the issue. He points out that the fact that rules governing the advance disclosure of evidence in grievance arbitration are virtually nonexistent can, in certain cases, encourage games of hide-and-seek between the parties.5 Section 100.3.1 is therefore triggering a cultural shift. Advance disclosure is no longer merely a cooperative practice that takes place only when the parties consent to it. It is a legislative obligation, subject to only two exemptions: an urgent situation or when a decision is otherwise rendered to ensure the proper administration of justice. Under this new framework, an initial interlocutory judgment—eagerly awaited by legal practitioners—has clarified the scope of the obligation and, above all, how strictly the exemption for the proper administration of justice is enforced. It was rendered by arbitrator Isabelle Leblanc on June 22, 2026, in Syndicat des professeures et professeurs du Cégep Marie-Victorin and Cégep Marie-Victorin.7 Background on the ruling The dispute arose in the context of workplace disciplinary measures that included a dismissal. The employer requested an exemption from the requirement to disclose certain documents in advance—primarily messages exchanged on social media and via text—which it preferred to disclose either during or after the complainant’s testimony. The union opposed the exemption, citing the very rationale behind the reform. In her ruling, the arbitrator first notes that advance disclosure is now the rule and that parties can no longer treat it as a matter of procedural discretion. Advance disclosure, she states, is a strict procedural duty that may be waived only in urgent situations or for the proper administration of justice. She frames the duty within Bill 101, stating that the reform aims to reduce processing times, enable the parties to better prepare their cases, and promote the resolution of disputes based on evidence known to both sides. A ruling that’s open to interpretation, yet still sends a clear message This ruling should be interpreted carefully. The arbitrator herself highlights the unique aspects of the case, in particular that the complainant was either the sender or the recipient of the messages the employer sought to use. The complainant was therefore already aware of the messages, even though he claimed to have deleted them and no longer to have them in his physical possession prior to his testimony. From a practical standpoint, the arbitrator highlights the risks that inefficiency can entail. She notes that failure to provide advance disclosure may hinder the search for the truth, not because the facts are actually disputed, but because the normal limitations of memory may affect responses. She also notes that failure to provide advance disclosure impacts the efficiency of the hearing due to the time required to review the messages in the hearing room, especially given their volume. From a legal standpoint, the arbitrator rejects the employer’s argument, one based on having a full and complete defence. She deems the concept inapplicable in arbitration and shifts the focus to the concept of the right to be heard. In her view, withholding evidence in the name of the right to be heard would amount to encouraging a practice that undermines the other party’s right to properly prepare and defend itself. She specifies that the employer would have to demonstrate a real, concrete, and disproportionate infringement of his rights, constituting a heavy burden of proof that was not met in this case. She suggests that exemptions should not be viewed as merely a way out when advance disclosure is uncomfortable or strategically disadvantageous. It is important to remember that each case is unique. Section 100.3.1 grants the arbitrator discretion based on the principle of the proper administration of justice, and it is possible that other arbitrators may reach different conclusions depending on the facts. Rethinking disciplinary investigations and how we gather versions of the facts A practical lesson emerges clearly from this ruling and is of direct interest to human resources and labour relations managers. The arbitrator points out that the employer already has a forum to assess the employee’s credibility: the investigation conducted prior to imposing the disciplinary measure. She highlights that, while evidence is not generally disclosed during investigations, this is often a deliberate choice rather than a necessity. She adds that the employer is not precluded from challenging the employee’s credibility and that it may do so during the investigation.7 Bill 101 and this ruling therefore call for a more rigorous structure for disciplinary investigations, not only to establish the facts but also to verify the consistency and reliability of the explanations before a decision is made. In many cases, this means the better planning of meetings aimed at gathering the versions of the facts. It is essential to ensure that the relevant questions are asked during the investigation, that the answers are accurately recorded, and that the person in question can clearly explain the allegations against them, especially when the employer intends to rely on this evidence. This way, there is less risk that a late review of evidence will slow down proceedings with delays and interruptions. In light of these lessons, it appears that the following practices deserve consideration when conducting disciplinary investigations: Clarifying from the outset what the allegations are and what needs to be verified, and then adjusting the investigation as findings emerge; Preparing an agenda to gather the parties’ versions of the facts and identify the documents to be discussed; Documenting responses accurately and completely, including nuances, corrections, and explanations; Submitting written materials during the investigation, when applicable, to obtain comprehensive and contemporaneous explanations; Addressing any contradictions or grey areas during the investigation, rather than letting them become more pronounced during the hearing; and Ensuring that the disciplinary decision reflects the facts known at the time it is made and that the investigation file provides a clear explanation of the decision. We will closely monitor future rulings under section 100.3.1, as the jurisprudence will clarify, over time, the practical scope of the exemption for the proper administration of justice, as well as its limits in disciplinary matters. In this ever-changing environment, we remain available to assist employers from the investigation stage through to arbitration in order to minimize the risk of contestation and strengthen their case. SQ 2025, c. 28. Idem., Explanatory Notes. CQLR, c. C-27. Marc Mancini, Frédéric Poirier and Stéphanie Lalande, La preuve et la procédure en arbitrage de griefs, 3rd ed., Wilson & Lafleur, Montréal, 2026, pp. 117–127. Marc Mancini, “Et si la Règle de Browne c. Dunn s’appliquait en arbitrage de griefs au Québec : analyse réflexive sur les enjeux de divulgation de la preuve”, in Sébastien Beauregard et al., 50e anniversaire de la conférence des arbitres du Québec - Un demi-siècle de réflexion et d’évolution, Wilson & Lafleur, Montréal, 2024, pp. 74–83, 93. Syndicat des professeures et professeurs du Cégep Marie-Victorin and Cégep Marie-Victorin, 2026 QCTA 284 (Ms. Isabelle Leblanc). Idem., para. 58.

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July 29, 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.

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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

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June 26, 2026

Recent developments in workplace AI adoption

Artificial intelligence (AI) is no longer merely a futuristic concept but a present-day reality—a practical business tool that is routinely used in management and production. Organizations are increasingly adopting generative AI and analytics solutions for tasks such as writing, sorting, decision-making, monitoring and evaluating. However, this is often done without any prior structured planning. Employers now face the dual challenge of achieving productivity gains quickly while ensuring that AI does not pose legal, reputational or operational risks. The range of applications is expanding to include writing assistance, decision-making support, performance analysis, digital monitoring and incident and accident prediction. This raises questions of interest to both executives and the media. For example, who should be held responsible when the tool makes a mistake? What data is being used? How far can employers go in monitoring their employees? If properly regulated, AI can support innovation and expedite its implementation, while also contributing to workplace well-being, health and safety. In Quebec, these benefits are particularly significant in the context of an aging population, labour shortages and increased pressure to boost productivity. Addressing this situation requires solutions that foster growth and competitiveness. The use of AI systems in the workplace raises real and multifaceted challenges. These include protecting personal information and maintaining confidentiality, establishing liability and accountability where errors or failures occur, and considering the potential impact on workloads and the work environment. Aware of the effect that digital transformation and AI are having on the workplace, the Minister of Labour launched a consultative process to assess whether existing legislation adequately addressed these developments. In October 2025, he tasked the Comité consultatif du travail et de la main-d’œuvre (the “CCTM”) with further exploring ideas and developing a shared vision regarding: Consultation processes that factor in the implications of AI use in the workplace; Ethical, governance and transparency principles in human resources decision-making; The prevention of emerging occupational health and safety risks.1 CCTM report: Recommendations The Avis du CCTM concernant les enjeux entourant l’implantation et l’usage des systèmes d’intelligence artificielle en milieux de travail au Québec [CCTM report on the implications of implementing and using artificial intelligence systems in Quebec workplaces] (“CCTM Report”) was released on April 29, 2026. The recommendations set out in the report regarding the implementation and use of AI systems in Quebec workplaces include, in particular: Applying the current legal framework governing labour and employment law in Quebec; Preserving the essential role of human judgment—and the responsibility that comes with it—in automated decision-making processes; Applying laws respecting the protection of personal information2 when developing, implementing and using AI systems, and prioritizing solutions that limit the use of electronic surveillance; Implementing an algorithmic impact assessment process that would involve employees and take into account the impact of automated decision-making on fundamental rights and privacy; Ensuring that organizations continue to support employee mobility and ongoing professional development; Regulating algorithms through sound governance practices that promote transparency and explainability in algorithmic decision-making; Placing emphasis on the need to pay special attention to discriminatory biases. In its report, the CCTM also makes recommendations to the Commission d’accès à l’information, such as updating its guide on drafting privacy policies to include disclosure requirements regarding AI and surveillance technologies, and encouraging employers to inform employees of their intention to use partially or fully automated decision-making processes. Lastly, the CCTM recommends that the Ministère du Travail develop, in collaboration with the CCTM, a guide to support the implementation of responsible, compliant and socially acceptable AI. Guide released by the Ministère du Travail: 5 principles Further to the recommendations made in the CCTM report, the Minister of Labour released, on June 12, 2026, a document titled L’intelligence artificielle au travail : Guide d’accompagnement pour une intégration responsable [A guide to using artificial intelligence responsibly in the workplace] (the “Guide”). The Guide aims to ensure that AI is integrated into workplaces in a responsible, user-centric and collaborative manner. It sets out five (5) key principles designed to inform discussions and help organizations recognize the main issues, namely: Respect for rights and freedoms in the workplace; Protection of privacy and data governance; Governance, participation and social dialogue; Human oversight and transparency; Sustainable development and well-being. For each principle, the Guide provides examples of how AI is used in the workplace. It also highlights the associated benefits and challenges, and suggests practical steps to ensure that AI is adopted and used responsibly. The Guide serves as a practical, evolving tool that organizations and labour market stakeholders are encouraged to tailor to their specific circumstances. Accessible and regulated AI While the adoption of AI in the workplace offers tangible opportunities for improvement, it also raises important issues that require careful oversight. With that in mind, the Guide aims to support the use of AI in a way that protects rights and users, while taking workplace considerations into account. It also aims to provide the various stakeholders involved with the tools they need to facilitate the adoption of AI at work. A number of interesting challenges are likely to arise over the next few years, and Lavery’s highly qualified professionals are ready to help you deal with them. Contact the team today. Comité consultatif du travail et de la main-d’œuvre, Avis du CCTM concernant les enjeux entourant l’implantation et l’usage des systèmes d’intelligence artificielle en milieux de travail au Québec, online: lien, April 9, 2026, p. 6. (In French only) Act respecting the protection of personal information in the private sector, CQLR c. P-39.1; Act respecting Access to documents held by public bodies and the Protection of personal information, CQLR c. A-2.1.

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