Publications

Last May 10, the Minister of Municipal Affairs and Land Occupancy, Martin Coiteux, announced the tabling of several amendments to Bill 83 dealing with various legislative provisions on municipal matters. These amendments pertain to the recommendations contained in the report of the Charbonneau Commission. Changes to the call for tender rules for municipalities In order to strengthen the integrity of the process for awarding contracts in municipal calls for tenders, certain changes are being proposed to the functioning of the process. For example, the names of the members appointed to the selection committee would be kept confidential. Contractors would also be able to participate anonymously in the process. In addition, the amendments as presented would increase the threshold for the awarding of contracts without calls for tenders in cities from $25,000 to $100,000. Increased oversight of political contributions With a view to a sounder public administration, Minister Coiteux is suggesting that the time limit for instituting proceedings relating to illegal financing in municipal politics be extended to seven years. The current time limit is five years. The amendments also provide that cash loans or guarantees in favour of a municipal party would be limited to a maximum of $5,000. Additionnaly, any persons who agree to make such a loan or provide such a guarantee would have to sign a statement guaranteeing that they would not act as front men for financing. _________________ On May 11, 2016, following in the footsteps of Minister Coiteux, the Minister of Justice, Stéphanie Vallée unveiled Bill 98 with a view to amending various statutes primarily regarding admission to the professions and the governance of the professional system. Responding primarily to four recommendations of the Charbonneau Commission, the main objective of this Bill is the public protection. Governance, ethics and public protection To this end, Bill 98 would allow the Office des professions to take the lead by investigating a professional solely on the basis of information received by it. Thus, the Office would no longer have to wait for permission from the Minister of Justice and could act on its own initiative, considerably reducing the timeframe for the investigation. The professionals of all professional orders would also have to follow mandatory ethics and professional conduct training. In the same vein, the Bill provides for improvements to the training of the directors of professional orders, particularly in such matters. Suspension or limitation of a professional's right to practice Furthermore, the Minister of Justice is proposing that a professional's right to practice or use of his or her title should be suspended or limited when he or she is being prosecuted for an offence punishable by imprisonment of five years or more. Immunity granted to informant also guilty of offence The syndic would have the power to grant immunity to a professional who previously reported an offence which he or she participated in. The objective here is to increase the protection of informants in order to encourage transparency and prevent the infiltration of organized crime into the legal economy. The report of the Charbonneau Commission recommended that professional orders should be able to sanction firms that adopt illegal practices, and not just professionals. However, this recommendation is not included in Bill 98. The amendments to Bill 83 were tabled on May 10, 2016. Bill 98 was introduced on May 11, 2016. Lavery's Corporate and Business Integrity Group is closely following the adoption of the amendments to Bill 83 and the adoption of Bill 98 in order to assist you in applying these new provisions and advising you on the potential consequences to your firm.

Last October 30, the provincial government announced the creation of 'Passeport Entreprises', an action plan focused on two main points: to facilitate access by businesses to government contracts and make the Quebec government's tendering processes more transparent and rigorous. The government intends to table a Bill to create the office of 'Commissaire aux contrats publics' ('Public Contracts Commissioner'), whose mission would be to ensure the sound management of public contracts. To do so, the current functions of the Autorité des marchés financiers regarding authorization to enter into contracts with the state would be transferred to the Commissioner. The Public Contracts Commissioner is expected to have the power to require that changes be made to call for tender documents, or even to cancel them outright if he or she is of the view that they unduly limit competition, either because they are too restrictive, or because they target a specific product or business where other businesses could meet the same need. Public agencies would be required to implement a systematic and transparent procedure, as an initial recourse, for processing complaints for lack of competition in tendering. Before turning to the Commissioner, an aggrieved company would first have to submit its complaint to the public agency responsible for the call for tenders, which would then be required to assess the complaint. For the time being, the foregoing is still subject to confirmation, since no Bill has yet been published. Lavery's Corporate and Business Integrity Group protects your interests and will closely follow the adoption of this Bill to assist you in taking the necessary measures to bring you into compliance with the new requirements.

The wave of online platforms offering lodging for rent, such as Airbnb1 which allow private individuals to rent all or part of their home as vacation accommodation, is attracting more and more fans throughout the world. Quebec is no exception to this trend. In Quebec, hotels and other operators that qualify as «accommodation establishments» within the meaning of the Act respecting tourist accommodation establishments2 (hereinafter the «Act») and the Regulation respecting tourist accommodation establishments3 (hereinafter the «Regulation») are required to collect a tax on lodging4 under the Act respecting the Québec sales tax,5 which is not required of operators using platforms such as Airbnb. The arrival on the market of these platforms is therefore likely to create unfairness in the tax system. With the aim of correcting this situation, last October 22 and November 4, the Quebec government presented, respectively, Bill 67, An Act mainly to improve the regulation of tourist accommodation, and the draft Regulation to amend the Regulation respecting tourist accommodation establishments. THE ACT AND REGULATION CURRENTLY IN FORCE At the present time, the Act applies to establishments providing accommodation for tourists in return for payment. It requires any person operating a «tourist accommodation establishment» to hold a classification certificate. To obtain such a certificate, the operator must apply to the clerk, secretary-treasurer, secretary or any other officer of his local municipality designated for that purpose, for a certificate attesting that the establishment violates no municipal urban planning by-law regarding uses. Any person operating an accommodation establishment without a classification certificate is committing an offence. A «tourist accommodation establishment» within the meaning of the Regulation is «any establishment operated by a person who offers for rent to tourists, in return for payment, at least one accommodation unit for periods not exceeding 31 days». An accommodation unit is defined, among other things, as a room, bed, suite, apartment, house, cottage, camp, etc. We note that the Regulation expressly excludes accommodation units rented on an occasional basis from the definition of «tourist accommodation establishment». However, the Regulation does not define what constitutes renting on an «occasional basis». Thus, for the time being, the only existing guidelines in this regard have been defined by the case law.6 For example, the renting of a cottage for a few weeks during the summer is not subject to the obligation to hold a classification certificate. BILL 67: ADDITION OF THE NOTION OF «TOURIST» Bill 67 defines the term «tourist» as «a person who takes a leisure or business trip, or a trip to carry out remunerated work, of not less than one night nor more than one year outside the municipality where the person’s place of residence is located and who uses private or commercial accommodation services.» Until now, the notion of «tourist» was never previously defined. The effect of this new definition is that all individuals or businesses who rent out an accommodation unit (i.e. a bed, room, apartment, etc.) to a resident of another municipality, even if only for one night during the year, will be considered to be operators of accommodation establishments, notwithstanding that they do not hold themselves out as such. Accordingly, they will be obligated to obtain a classification certificate and collect the tax on lodging. Furthermore, to obtain such a certificate, it is henceforth the Minister who will request the local municipality to send him a notice respecting compliance with the municipal urban planning bylaw. The municipality will be required to inform the Minister within 45 days of the non-compliance of the intended use. When the intended use does not comply with the municipal urban planning bylaw, the Minister will be obliged to refuse to issue the certificate. In addition, certain provisions of Bill 67 will facilitate penal prosecutions in the event of a breach of the law, in addition to considerably increasing the fines provided for in the Act for persons who contravene the statutory requirements. While the Act provides that any person contravening the Act is liable to a fine of $750 to $2,500, Bill 67 provides for a fine of $2,500 to $25,000 for natural persons, and $5,000 to $50,000 in other cases. DRAFT REGULATION: AMENDMENT TO THE DEFINITION OF «TOURIST ACCOMMODATION ESTABLISHMENT» As for the Draft Regulation, it amends the definition of «tourist accommodation establishment» as follows: «any establishment in which at least 1 accommodation unit is offered for rent to tourists, in return for payment, for a period not exceeding 31 days, on a regular basis [...]». Therefore, if a person or business offers an accommodation unit on a regular basis, particularly through a platform such as Airbnb, it will qualify as an accommodation establishment even if it in actual fact only provides lodging for one tourist for a single night during the year. As of the date of publication of this newsletter, bills and draft regulations are being discussed. If the Bill and Regulation are adopted in the end, it is likely that they will be amended following specific consultation sessions. It is only at the time of their adoption that their final contents and the dates they come into force will be known. 1 Airbnb is a community platform for the rental and reservation of the lodgings of private individuals founded in 2008 by two Americans, Brian Chesky and Joe Gebbia. 2 CQLR, c. E-14.2. 3 CQLR, c. E-14.2, r 1. 4 This tax represents an amount of $2 to $3.50 per night for each unit or a percentage of 3.5% of the value of the consideration for the night, depending on the class of tourist region in which they are located. 5 CQLR, c. T-0.1. 6 Boucher c. Pohénégamook (Ville de), 2012 QCCS 2362.

CANADIAN INVESTMENTS IN CUBA The Helms-Burton Act and its risks for Canadian investors in Cuba Recommandations for investors Prospects in the face of the thaw in U.S. and Cuba relations Following the announcement of the restoration of diplomatic relations between the United States and Cuba, many Canadian business stakeholders have been solicited by promoters so that they may consider various investment projects in Cuba1. However, Canadian nationals who are evaluating whether to invest in Cuba must be aware that the thawing of diplomatic relations between U.S. and Cuban authorities has not (as of yet) been followed by the withdrawal of one of the main obstacles to the completion of Canadian investments in Cuba, that is, the Helms-Burton Act. Here is some background on the subject. In March 1996, the United States (U.S.) adopted the Cuban Liberty and Democratic Solidarity Act, better known as the Helms-Burton Act.2 This statute was enacted following an incident which occurred in the same year, where two U.S. civil planes belonging to an antiCastro organization were shot down by Cuba. The purpose of the Act was to reinforce and codify the economic embargo against Cuba in order to weaken and eventually remove the Castro regime in favour of a democracy. This Act has been vigorously contested by the international community since its enactment, particularly in respect of its Titles III and IV, its two most important sections, as violating international law and being at odds with the concept of national sovereignty. Title III – “Trafficking” in confiscat ed property Title III of the Act confers on U.S. businesses and nationals the right to sue on U.S. soil anyone who, since November 1, 1996, traffics or has trafficked in property confiscated from them by the Cuban State. The definition of “traffic” is very broad. A person “traffics” in confiscated property if, among other things, that person knowingly and intentionally sells, transfers, distributes, conducts financial operations or disposes in any other manner of confiscated property or purchases, receives, holds, controls, manages or holds an interest in confiscated property and engages in a commercial activity using or otherwise benefiting from confiscated property3. The Act provides that the U.S. President may suspend Title III for any 6month period. Until now, the implementation of Title III has always been suspended. There remains some risk for Canadian investors despite this suspension, especially if they hold property or have subsidiaries in the U.S. This is why we recommend to Canadian investors contemplating operations on Cuban soil to conduct precautionary due diligence to ascertain that their commercial activities and the Cuban corporations with whom they do business, if any, involve no operations which could be considered as constituting trafficking in confiscated property. Title IV – Exclusion of aliens from the U.S. territory Title IV of the Act excludes some aliens from the U.S. territory and provides for the refusal of entry visas to officers and directors of businesses who are involved in the trafficking of confiscated property and their family members. Title IV of the Act currently applies to any alien, Canadian or otherwise. Canada’s response In October 1996, to counter the Helms- Burton Act, Canada amended the Foreign Extraterritorial Measures Act.4 Section 7.1 of this Act provides that: “Any judgment given under the law of the United States entitled Cuban Liberty and Democratic Solidarity (LIBERTAD) Act of 1996 shall not be recognized or enforceable in any manner in Canada.” The Act prohibits Canadian nationals from communicating information in the context of the enforcement of the Helms-Burton Act (Section 3(1)). Moreover, under the Act, Canadian nationals against whom a judgment ordering to pay an amount has been rendered in the U.S. pursuant to the Helms-Burton Act are entitled to sue the plaintiff in Canada in order to recover amounts paid in the U.S., including all solicitor-client costs (Section 9). These two contradictory statutes continue to create confusion and uncertainty for Canadian businesses that conduct activities or have subsidiaries in the U.S. as they are faced with the dilemma of having to comply with only one of these statutes. Toward normalization of the relations between Cuba and the U.S. On July 20, 2015, Cuba and the U.S. restored their diplomatic relations with the reopening of their respective embassies. This recent warming of relations between the two countries paves the way towards the normalization of their economic relations. Lifting the economic sanctions will require that the Helms-Burton Act be repealed by the U.S. Congress since the U.S. President only can temporarily suspend the application of Title III of the Act. Conclusion Canadian investors have had to deal with the Helms-Burton Act for 20 years. They have had to manage the risks resulting from such Act as part of their investment in Cuba. Mining corporations have had to renounce conducting any commercial activity with U.S. businesses while their officers continue to be prohibited from entering the U.S. Although the thawing of relations between the U.S. and Cuba has not yet resulted in the repeal of the repeal of the Helms-Burton Act, it augurs well for a progressive lifting of the embargo. If such is the case, Canadian businesses will be able to continue, even increase their activities in Cuba while developing their commercial relations with the U.S. American investors will also be able to invest in Canadian businesses which are active in Cuba. That being said, new competition from the U.S. should provide Canadian businesses with incentives to maintain their competitiveness if they wish to retain their leading role as economic partners of Cuba. 1 See as an example: http://www.tradecommissioner.gc.ca/eng/document.jsp?did=159128. 2 Available online: http://www.treasury.gov/resource-center/sanctions/Documents/libertad.pdf. 3 Section 4(13) of the Helms-Burton Act. 4 R.S.C. 1985, c. F-29.

This publication was authored by Luc Thibaudeau, former partner of Lavery and now judge in the Civil Division of the Court of Québec, District of Longueuil. The title of this newsletter gives a good summary of the explanatory notes that serve as an introduction to Bill 14, entitled An Act to amend the Charter of the French language, the Charter of human rights and freedoms and other legislative provisions (the “Bill”). The legislator is concerned that English is being used systematically in certain workplaces. The Bill was tabled on December 5, 2012 and the proposed amendments are designed to reaffirm the primacy of French as the official and common language of Quebec.

On April 28, 2005, the Chambre des notaires du Québec filed a petition to declare unconstitutional and of no force and effect requirements issued by the Canada Revenue Agency (CRA) under sections 231.2 and 231.7 as well as subsection 5 of section 232(1) of the Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.) (ITA) to obtain documents or information prima facie protected by professional secrecy.

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Bill 130 - An act respecting adminisrative justice