On May 13, 2021, Bill 96: An Act Respecting French, The Official and Common Language of Québec (the “Bill”) was tabled by the Québec government. This Bill aims to provide for stricter protections of the French language within the Charter of the French Language (the “Charter”) and several other provincial laws. However, we are comforted that the current practices in the industry, including the preparation of loan and security documents, remain largely unchanged by the Bill.
Section 55 of the Charter: Standard-form contracts and standard clauses
The Bill requires that standard-form “contracts of adhesion” be drafted and presented only in French to a contracting or credit party for examination under the amended s. 55 of the Charter. Only after having done so in respect of such “contracts of adhesion”, will the contracting or credit party be able to be bound by such a contract in English provided further that it is expressly requested and chosen as the “choice of language” in the contract.
This change will only affect contracts relating or applying to consumers. Therefore, the “choice of language” provision will still be sufficient to allow a negotiated form of contract, such as loan and security documents, to be drafted in English and no corresponding French version will be required.
Section 21 of the Charter: Contracts with the civil administration
The amendments to s. 21 of the Charter will require that all contracts entered into by the “civil administration” be necessarily and exclusively drafted in French. The civil administration refers to the government and its various bodies, municipal and school entities and health and social services entities.
Although this proposed change appears to be a departure from current practice, the current exception for contracts entered into “outside Québec” with the civil administration would be reinserted as s.21.5 of the Charter and therefore will still apply. In other words, if the civil administration were to enter into a contract with a party outside Québec, the contract and its corresponding documents and communications may be exclusively drafted in English.
Contracts “outside Québec” has been interpreted under the Civil Code of Québec to mean contracts entered into/concluded in another province or jurisdiction other than Québec. Therefore it seems that contracts entered into outside of Québec may be drawn up in English and so the applicable agreement should include a clause clearly stating that the parties have signed and entered into the contract outside of Québec.
Moreover, the Bill seeks to add another, more general exception to the exclusive French requirement. Loan contracts, financial instruments and contracts whose object is the management of financial risks, including currency exchange or interest rate exchange agreements, contracts for the purchase or sale of options, or futures contracts will all be permitted to be drafted in English as well as French.
Despite the modifications pursued by the Québec government, current practice within the financial services industry will be largely unaffected upon adoption of the Bill in its current state. Since the Bill has not been passed into law, the proposed amendments therein are still subject to change. Accordingly, Miller Thomson will continue to monitor the Bill as it navigates the legislative process and keep our clientele abreast of any further amendments and their potential impacts.