09 Feb Québec Court Approves Nearly $1.3 Million Fine Relating to Price Advertising Practices
A settlement agreement was approved by the Court of Québec last week, highlighting the continued regulatory focus on price advertising practices under Québec’s Consumer Protection Act (CPA). Canadian Tire Corporation has agreed to pay just under $1.3 million in fines and associated costs after pleading guilty to 74 counts of contravening the CPA. The charges arose from allegations that certain advertised “regular” prices did not reflect actual market pricing, potentially creating the impression of deeper discounts than consumers were in fact receiving.
Background
The proceedings stem from a 2021 investigation conducted by Quebec’s Office de la protection du consommateur (OPC). Over a six-month period, the OPC reviewed pricing representations for a small number of products advertised through flyers, online listings, and in-store signage in the Montréal area.
Based on an analysis of sales and advertising data, the OPC concluded that the products were rarely sold at the stated regular prices used as reference points in promotional materials. The concern was not that the sale prices themselves were excessive, but rather that the reference prices could mislead consumers as to the true nature or magnitude of the advertised discounts.
The investigation initially covered seven products. Under the settlement approved by the Court, Canadian Tire admitted liability with respect to five products, including certain knife sets, cookware items, and a cordless drill.
Legal Framework
Section 225 of the CPA prohibits merchants, manufacturers, and advertisers from falsely invoking a price reduction, indicating a regular or reference price, or otherwise creating the impression that a price is advantageous. These provisions are applied strictly in Quebec and focus on whether reference prices are grounded in genuine selling practices. In practice, a “regular price” should generally reflect a price at which the product has been offered in good faith, for a meaningful duration or volume. Reference prices that are largely theoretical, inflated, or rarely used can attract regulatory scrutiny even where the advertised sale price itself is accurate.
Broader Enforcement Context
Although this case arises under provincial consumer protection legislation, it aligns with broader enforcement trends across Canada. Both provincial regulators and the federal Competition Bureau have increasingly emphasized misleading pricing practices as an enforcement priority. In Québec, the settlement agreement highlights the strict approach the regulator takes toward reference pricing.
At the federal level, the Competition Bureau has signalled sustained focus on ordinary selling price claims, as well as aggressive enforcement against drip pricing – where mandatory fees are disclosed only late in the purchasing process. Recent high-profile enforcement actions underscore regulators’ willingness to pursue significant penalties where pricing representations are found to distort consumer decision-making.
For businesses advertising nationally, the decision serves as a reminder that pricing strategies and promotional claims should be assessed for compliance provincially/territorially as well as federal deceptive marketing standards. Careful documentation of pricing history and consistency across advertising channels remain key risk-mitigation tools.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Companies are encouraged to seek legal counsel to ensure compliance with applicable laws.
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