US government officials have held private discussions about potentially imposing trade sanctions on Canada over Quebec’s controversial Language Act, Bill 96, according to information obtained by CBC News.
Documents obtained by CBC News under the US Freedom of Information Act also revealed that US government officials have been told that the implementation of Bill 96 could result in reduced shipments of US products to Canada, not just Quebec.
According to the documents, officials from the Office of the United States Trade Representative (USTR) discussed whether the bill, which contains provisions that could affect trade marks, trademarks and product labeling, would violate trade agreements between Canada and the United States.
U.S. officials have been informally discussing whether the Bill 96 restrictions constitute technical barriers to trade, infringe trade-related intellectual property rights, or violate Section 301 of the Trade Act of 1974, and whether such violations would justify trade sanctions.
The document, which covers the period from November 2022 to late January 2024, did not say whether USTR officials had reached any conclusions on trade sanctions.
Asked for an update, USTR deputy spokesperson Katherine White pointed to a report from a January meeting of Canadian and U.S. trade officials which cited the U.S. government’s concerns about Bill 96.
Foreign Ministry spokesman Jean-Pierre Godbe said the Canadian government was “closely monitoring developments.”
“The Government of Canada is aware of the concerns expressed by various stakeholders regarding Quebec’s amendments to the Modernized French Language Charter under Bill 96 and accompanying regulations,” Godbout said in an emailed response. “We share these concerns with the Quebec government and will continue to monitor developments.”
Thomas Verville, a spokesman for Quebec’s French-language minister, Jean-François Roberge, had little to say about what the Quebec government thinks about the USTR’s internal discussions on trade sanctions.
“We are still in the process of developing the regulations and the final version will be ready shortly,” he wrote. “A consultation period has been organised to gather all views.”
Bill 96, which strengthens Quebec’s language law, received final approval on June 1, 2022, and proposed regulations to implement the act were published on January 10, 2024. Final regulations to implement Bill 96 are expected to be published in the coming weeks.
Some provisions of Bill 96, including those relating to trademarks, are scheduled to come into effect in June 2025.
Bill 96 was one of the topics raised by U.S. officials during a meeting on January 24 between USTR Senior Advisor Kara Morrow and Canada’s Associate Minister for International Trade, Rob Stewart.
Industry Presses Washington to Act
In a summary of the meeting, the USTR office said Morrow “shared concerns about the trademark provisions of Quebec’s Bill 96 and its potential impact on U.S. businesses, including small and medium-sized businesses.”
According to documents obtained by CBC News, Bill 96 has been in the U.S. government’s attention since at least November 2022, and the International Trademark Association (INTA) has urged the U.S. government to convey its concerns about Bill 96 to the Canadian government and consider trade sanctions against Canada.
On December 12, 2023, INTA organized a meeting between USTR officials, including Morrow, and executives from several large companies who expressed concerns about Bill 96. These companies included Stanley Black & Decker, Hershey, Microsoft, Marriott, Agilent Technologies, Cody, and Procter & Gamble.
“Notably, Canada is asking the USTR to investigate ‘alleged violations of international agreements’ or bring a Section 301 lawsuit against Canada,” Deputy U.S. Trade Representative Jacob Ewart wrote.
Jenny Simmons, INTA’s director of government relations, wrote in email correspondence and briefing notes that U.S. companies that want to register trademarks in Canada before Bill 96’s provisions take effect in 2025 won’t be able to do so because the Canadian Intellectual Property Office, which registers trademarks in Canada, has a four-year backlog of applications.
In a separate document, a coalition of “businesses, experts and industry groups” warned the U.S. government that Bill 96 could affect products available in Canada.
“Quebec consumers will suffer because they will be deprived of products available to others or will have to pay higher prices to recoup the costs of compliance,” the document states.
“If the distribution model is more national, then withdrawing from Quebec could mean withdrawing from Canada altogether, which could result in consumers in other provinces also having less choice on store shelves.”
USTR officials noted that while Canada is responsible for the trade agreement, Bill 96 is provincial law.
“The complicating factor is that our counterpart is federal and Bill 96 is Quebec. [sic]”It’s as if Canada is bringing Wisconsin law to the USTR. We can resolve it if necessary, but it’s not something we regularly deal with,” Eward wrote in a Dec. 14, 2023 letter to Simons.
Symons suggested pressure from Washington could prompt the Canadian government to act.
“I understand this is a provincial issue,” she wrote, “but given that it puts Canada in a position of non-compliance with various international obligations, which will directly impact U.S. exports to all of Canada, I do not believe the federal government has any choice but to address this, especially when pressured by the U.S..”
Another senior USTR official, Jennifer Stratman, signaled she was skeptical that trade sanctions would be imposed.
“The WTO has no obligation regarding language use,” she wrote on Dec. 19. “I cannot imagine raising the issue in the TBT.” [technical barriers to trade] “We may ask you to provide a sticker because a different language is required, but we will not claim trade violations or seek a dispute.”
The agenda for USTR’s January meeting with Canadian officials did not include any mention of trade sanctions but did include concerns about Bill 96.
“While U.S. companies selling products and services in Canada generally support Quebec’s French Language Charter, some of the proposed amendments could impose serious restrictions on products and services trademarked in Quebec and across Canada,” the conference report said.
Simmons told CBC News that INTA continues to discuss its concerns with US government officials, but it’s unclear whether the USTR will support the request for trade sanctions.
“So far, we haven’t heard anything about USTR’s thinking,” she said. “They continue to be engaged, and we’re very grateful for that.”
Simmons said INTA has been meeting with Quebec government officials in recent months and is waiting to see whether the final rules address its concerns.
Mark Warner, an expert in international business law, said Bill 96 was not recognized as a potential trade dispute with the United States.
Warner said he believes Bill 96 ranks low on a list of issues that frequently impede Canada-U.S. trade, such as auto rules of origin and softwood lumber, but it’s still an issue Canada should keep a close eye on.
“I don’t think it’s a priority. [the U.S.] “Not at the moment, but I think it’s something people would love to see,” he said.
Eliane Elbogen, a trademark law expert at the Montreal office of law firm Fasken, said Bill 96 raises a number of issues for companies with trademarks. He said provisions in the bill are inconsistent with federal trademark law and that Fasken is considering a possible constitutional challenge.
