Welcome to the Update
This is the first issue of the Quebec Business Law Update, a quarterly briefing for our Avrio Advocati colleagues and their clients. You should not have to follow Quebec's National Assembly, its regulators and its Court of Appeal to advise a client with Quebec operations. We do it for you, and keep only what changes practice.
This first issue is about the cost of compliance. Language rules now reach companies with 25 employees. Privacy penalties under Bill 25 are substantial. Transparency filings make ultimate beneficiaries publicly searchable. And workplace-harassment prevention programs are due in October. Together, they raise the recurring cost of operating in Quebec. They are also written, known rules: a client who plans for them can budget them precisely.
Legislative and Regulatory Update
Francization deadline 1 June 2026: companies with 25 to 49 employees
FactsBill 96 lowered the francization threshold from 50 to 25 employees. Since 1 June 2025, companies with 25 to 49 employees must register with the Office québécois de la langue française (OQLF). They then have three months after receiving their registration certificate to file an analysis of their language situation. Fines for companies range from CA$3,000 to CA$30,000 per offence, doubled or tripled for repeat offences, and the OQLF publishes a list of businesses that are not complying with the francization process.
Practical impact for foreign lawyersMany Quebec subsidiaries of foreign groups fall squarely in this range. Check OQLF registration now and add it to your due-diligence and subsidiary-audit checklists. The issue now is enforcement, not preparation.
Source: OQLF.
2026 merger-review thresholds: Competition Act flat, Investment Canada up
FactsThe Competition Act transaction-size threshold stays at CA$93 million for the fifth year in a row. The Investment Canada Act review threshold rises to CA$2.179 billion in enterprise value for trade-agreement investors (US, UK, EU, Japan). Lower thresholds apply to other WTO investors (CA$1.452 billion in enterprise value) and to state-owned enterprises (CA$578 million in asset value).
Practical impact for foreign lawyersWith inflation, a frozen threshold catches more deals every year in real terms. Run the thresholds early in every Quebec acquisition. Remember that the new structural presumption also changes the substantive analysis.
Source: Competition Bureau (ISED).
PL 111: the Cooperatives Act, modernized
FactsSanctioned on 24 February 2026, the reform modernizes how cooperatives are governed. Members may no longer acquire cooperative assets, outside the ordinary course of business, for less than fair market value. Cooperatives must also adopt a by-law on the mediation of disputes; those created before the reform have until 24 February 2027.
Practical impact for foreign lawyersQuebec's cooperative sector is a major business partner in agriculture, finance and distribution. If your client deals with it, do not assume that ordinary corporate-law governance rules apply to the counterparty.
Source: Publications du Québec, 2026, c. 1.
Bill 42: harassment prevention is now part of the prevention program
FactsBill 42 on psychological harassment and sexual violence at work came into force in stages. Since 1 October 2025, employers must include sexual violence among the psychosocial risks they identify, and build their harassment-prevention policy into their prevention program (establishments with 20 or more workers) or their action plan (fewer than 20 workers).
Practical impact for foreign lawyersA head-office policy rarely meets the Quebec requirements as written. Check that the Quebec entity has its own policy, in French, built into its prevention program or action plan.
Source: CNESST.
Case Law Spotlight
2177 23rd Avenue Holdings c. Pival International inc., 2025 QCCA 19
A lease gave the tenant a "renewal option at market rent", with no way to set that rent. The Court of Appeal held that this was only a priority to negotiate, not a true option: when the negotiation period ended without agreement, the lease ended. The landlord had negotiated in good faith, and the court would not set the rent for the parties.
Why it matters for cross-border dealsFor foreign tenants building a Quebec real-estate portfolio, the renewal clause is the deal. Provide a mechanism for the rent the parties cannot agree on: arbitration, an expert, or a formula. Without it, the renewal right may be worth little.
Amaya inc. c. Derome, 2018 QCCA 120
Under art. 225.4 of the Quebec Securities Act, a secondary-market class action needs the court's authorization. The Court of Appeal held that the plaintiff cannot force the issuer to disclose documents before that authorization, except for its liability insurance policies. The Supreme Court denied leave to appeal in 2018. The ruling remains the leading Quebec authority.
Why it matters for cross-border dealsPublic issuers exposed to Quebec keep a real procedural shield: plaintiffs must first build their case from the public record. Factor this into disclosure-risk assessments for dual-listed and cross-border issuers.
Good faith creates duties of its own
Articles 6, 7 and 1375 of the Civil Code of Québec impose a duty of good faith that goes further than anything in the common law of contract. Its sharpest effects are in franchising. The duty starts before the contract: a franchisor negotiating with a prospective Quebec franchisee already owes duties of loyalty, information and cooperation. Bad faith in negotiations can lead to damages even if no contract is ever signed.
Quebec has no franchise-disclosure statute, and common-law lawyers sometimes read that as a lighter regime. It is the opposite. The codified duty of good faith does the work of a disclosure statute, without the safe harbours. A franchisor that withholds material information on the network, the territory or the unit economics is exposed, whatever the franchise agreement says. Abusive use of contractual rights during the relationship is judged by the same standard.
Handle every Quebec franchise negotiation as if a disclosure obligation applied. Keep a record of what the candidate received, and when. Keep projections defensible. Train the development team: sales talk carries legal risk in Quebec. In the agreement, entire-agreement and no-reliance clauses help, but they do not exclude the codified duty. It cannot be contracted out. The same rule protects your client whenever it is the one relying on the other side's word.
Deal and Litigation Trends
What we see in Quebec deals and disputes this quarter, explained for lawyers outside Quebec, and what it means for your next file.
Quebec buyers lead the M&A market
Market observers agree: fewer foreign strategic buyers are acquiring Quebec companies, while local private equity firms and pension funds are buying more.
For your file: when your client sells a Quebec business, design the sale process with Quebec buyers in mind from the start.
Foreign investors prefer minority stakes
When foreign investors do come in, they increasingly take a minority stake, co-invest or form a strategic partnership rather than buy control. This limits regulatory friction and keeps their options open.
For your file: in a minority deal, the value lies in governance and exit rights: board seats, vetoes, tag-along and drag-along rights, and a clear way out. Draft them with care.
Bill 25: Quebec's privacy law is now fully in force
Every phase of Bill 25, Quebec's privacy reform for the private sector, is now in force. Penal fines reach the greater of CA$25 million or 4% of worldwide turnover, and administrative monetary penalties the greater of CA$10 million or 2%. Courts can also award punitive damages of at least CA$1,000 for an intentional breach or gross fault.
For your file: the risk is no longer theoretical. Include a privacy review in every Quebec acquisition: what personal information the target holds, where it is stored, and whether it is sent outside Quebec.
Who owns a Quebec company is now public
Since 31 July 2024, anyone can search the Quebec Business Registry by an individual's name and see the companies in which that person is a director, shareholder or ultimate beneficiary. Companies must also disclose the people who ultimately own or control them.
For your file: assume that the ownership of your client's Quebec entities is effectively public, and plan for it, including for reputation. The same register lets buyers and lenders check quickly who stands behind a Quebec counterparty.
Practical Checklist: a five-point Bill 96 audit
- ✓Headcount check. Does the Quebec entity have 25 or more employees? If so, check its OQLF registration and francization file.
- ✓Standard-form contracts. Make sure contracts of adhesion and their related documents are presented in French first.
- ✓Exterior signage. Check storefronts against the rule that French must be markedly predominant, including where non-French trademarks appear.
- ✓Web and commerce. Review websites, product documentation and packaging aimed at the Quebec market.
- ✓HR communications. Offer letters, policies and training materials for Quebec employees must be available in French.