Quebec Has Some Branding Issues

Quebec Has Some Branding Issues

The commitment to culture by our Francophone neighbours in Quebec has put their provincial government in the center of a legal battle with 6 major retailers.

Walmart, Costco, Best Buy, Gap, Old Navy and Guess have initiated a suit against the Quebec government in response to fines issued by the Office Québécois de la Langue Française (OQLF). The fines were issued pursuant to the Charter of the French Language (hereby referred to as the Charter) – a piece of Quebec legislation designed to promote the use of French in everyday life for its residents. The fines for contravening any provision in the Charter can range from $1500 to $20000 – a hefty sum that can be doubled for subsequent offences (Section 205 of the Charter) and can result in the revocation of a company’s “francization certificate” (a designation given by the OQLF entitling the company to certain provincial tax benefits and to enter into contracts with the Quebec government).

The OQLF stated that these companies were contravening Section 63 of the Charter which requires businesses operating in Quebec to have French names. Alternatively, companies could include a descriptive slogan or line in French in order to comply with this requirement. While a number of businesses operating in Quebec have complied with the Charter by renaming themselves completely (such as KFC – known as PFK in Quebec) or by adding French to their signage (Starbucks is known as Café Starbucks Coffee), the 6 retailers listed above have refused to do so and have instead taken the issue to the courts to decide.

The fines come following a report done by the OQLF earlier this year, in which the Office stated that they would “initiate other steps against businesses that refuse to post their trade name in compliance with the Charter [of the French Language].” Previous to these recent fines, the OQLF rarely went after trade names and much of the case will likely turn on the interpretation of the Quebec Regulation Respecting the Language of Commerce and Business (the Regulation). Section 25(4) of the Regulation provides that “a recognized trade-mark within the meaning of the Trade-arks Act” can be shown on public signs, posters and commercial advertising exclusively in a language other than French, thereby being an exception from Section 63 of the Charter.

However, there has been some argument over whether a trade name – the name used by a business for commercial purposes – can be considered to be included in the reference to “trade-mark” in the Regulation. As quoted by the Quebec Superior Court in Centre sportif St-Eustache c Québec (Procureur général), author Harold Fox (in The Canadian Law of Trade Marks and Unfair Competition) describes the differences and interactions between the two concepts as:

"The distinction between trade names and trade marks lies mainly in the fact that a trade-mark is used in association with vendible commodities or services while a trade name is more properly used as applied to the goodwill of a business… But it must be remembered that trade names are often used in association with vendible commodities and services and that trade-marks, just as much as trade names, are a constituent part of the goodwill of a business."

As some of these countries operate on an international scale, it is easy to understand why they are so resistant to some of the provisions that are now being strictly enforced by the OQLF in Quebec. The trade name of these companies and their associated logos are very closely related to the products and services that they provide to customers, and therefore, the goodwill that those generate toward the company itself. While it may seem fairly innocuous for Walmart to alter their signs to say “Le Magasin Walmart” (a possible compliant alteration), the costs of such a change could, in actuality, be quite large. These corporations spend massive amounts of money to design logos to attract customers and such a change could interfere with the look and feel of the chosen branding. There is no evidence that foreign countries have forced big name retailers to alter their signage in order to fit with the culture; should the Quebec government be so demanding of these corporations to change for such a relatively small market?

On the other side of the coin is the cultural sustainability that the OQLF and the Charter are attempting to maintain. French culture has been a defining point for Canadian culture and history – a fact recognized and referred to in many Supreme Court decisions. Should this not have any bearing on how these large companies do business in Quebec as a francophone province, if at the very least out of respect for the cultural heritage of our nation?

As the issues at stake are important to the operation of business in Canada and related to our French-Canadian culture and heritage, it is likely that the trial decision will be appealed. Regardless of the outcome at the end of the proceedings, will the businesses be left wondering if the money spent litigating these issues would have been better spent on redesigning their corporate branding? Only time will tell.

Adam Del Gobbo is a JD Candidate at Osgoode Hall Law School.