CANADA Trends and Developments Contributed by: Anthony Franceschini, INF LLP
Boards of directors and officers of corporations deal - ing in Québec should ensure that they have received appropriate briefings on Bill 29’s obligations and that compliance programmes have been adopted and are being monitored. Lemon law for seriously defective automobiles (in force 5 October 2023) Section 53.1 of the amended CPA, which came into force on 5 October 2023, created a dedicated statu - tory mechanism for declaring an automobile “seri - ously defective.” A consumer who owns or leases an automobile may apply to the court for a declaration that the vehicle is a “seriously defective automobile.” The court may grant such a declaration where specified repair-attempt thresholds have been met under the vehicle’s basic conventional warranty given gratuitously by the manu - facturer, and within the first three years or 60,000 km: • three unsuccessful repair attempts for the same defect; or • one or two unsuccessful repair attempts for the same defect where the merchant or manufacturer responsible for performing the warranty has had the automobile in its possession for more than 30 days (excluding days during which parts were unavailable and the customer was given a courtesy vehicle free of charge); or • 12 unsuccessful repair attempts for unrelated defects. The “defects” for which repairs are attempted must render the vehicle unfit for its intended use or signifi - cantly limit its usefulness (such as a safety hazard or no-start condition). The Act, however, did not define what constitutes an “unsuccessful repair attempt” or an “unrelated defect.” Once a court declares an automobile “seriously defec - tive”, an irrebuttable presumption of latent defect affecting the product is established. The irrebuttable nature of the presumption means that neither the man - ufacturer nor the merchant can introduce evidence to contradict the existence of a latent defect, once the statutory threshold has been reached. However, the merchant or manufacturer can defend the fact that
the repair attempts thresholds have not been met. In other words, the merchant or manufacturer can try to establish that there were not “three unsuccessful attempts” to repair the same defect in the vehicle. Consequently, warranty administration records and repair logs or work orders should be carefully doc - umented and maintained, as these records will be determinative in any Section 53.1 application. If the consumer is successful, then they are entitled to the full range of remedies available under Section 272 of the CPA, including claiming a reduction of the purchase price, cancellation of the contract of sale or the long-term lease, and damages, both compensa - tory and punitive. The Act also imposes disclosure obligations tied to the seriously defective designation. Any automobile that has been declared seriously defective must be disclosed as such when it is subsequently resold or advertised for resale. This obligation runs with the vehicle regardless of how many times it changes hands, creating a permanent public record that will materially affect the vehicle’s resale value. It is unclear yet how the vehicle’s permanent record (with the pro - vincial department of motor vehicles) will be altered or flagged by such a judicial declaration. Additional automobile-specific provisions of the Act were introduced along with the “lemon law” provision: the prohibition on charging fees related to the origin, nature, or quality of a part installed as part of normal maintenance in long-term lease contracts; and the requirement that merchants offer a free end-of-lease inspection to identify any components requiring atten - tion. These provisions are designed to address the exploitation of lessees who have limited negotiating power when maintenance disputes arise at the end of a long-term lease. Commentary on recent cases on Section 53.1 CPA Two decisions rendered in early 2026 represent the first reported applications of Section 53.1 of the CPA by Québec courts.
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