Hi there,

This week: Washington slaps a fresh 50% tariff on a list of Canadian goods — and this time USMCA doesn’t save you. Closer to home, the Registraire des entreprises has stopped sending reminders and started striking companies off the registry, we break down how legal (and how lucrative) third-party litigation funding really is in Quebec, and Ontario rewrites a chunk of its corporate playbook. Five minutes, coffee in hand.

Quebec

1. The REQ isn’t just warning anymore — it’s striking companies off the registry

Since June, the Registraire des entreprises has moved from sending reminders to actually cancelling the registration of companies that never filed their ultimate-beneficiary information — the ownership disclosure required since the corporate transparency reforms took effect. Losing your registration means losing your NEQ, and with it your ability to invoice properly, bank normally, bid on public contracts, or look credible to a lender or buyer. Notably, only the entrepreneur or an authorized administrator can file the correction — your accountant can’t do it for you.

Do this week: log into your file via ClicSÉQUR and confirm your ultimate beneficiaries are declared and accurate — names, addresses, percentage of control, dates of birth. If you’re not sure who counts as an “ultimate beneficiary” in your structure, ask us before the REQ decides for you.

2. Litigation funding is legal in Quebec — here’s how it actually works

If your business has a strong claim worth pursuing but can’t stomach the cash-flow hit of years of litigation, third-party litigation funding is a real, legal option here — and it got its clearest green light from a case that started right in Quebec. In 9354-9186 Québec inc. v. Callidus Capital Corp. (2020 SCC 10), the Supreme Court confirmed that funding agreements aren’t inherently illegal and can be approved by a supervising judge, even in insolvency proceedings: the case involved Bluberi Gaming Technologies, which owed $135.7 million to Callidus Capital and had no other assets left to fund a lawsuit against its own lender. In plain terms, a funder pays your legal costs (and sometimes your opponent’s costs if you lose) in exchange for a cut of any award or settlement — typically a multiple of the amount invested or a percentage of the recovery — and you owe nothing if the case falls short.

The numbers are bigger than most business owners assume. The global litigation finance market is projected to hit $67 billion by 2037; funders have historically earned north of 20% in annual returns with low correlation to stocks and bonds; and deals range from single-case financings (averaging $6.6 million) to portfolio deals (averaging $16.5 million), with some large facilities topping $250 million. The catch: if a case falls apart, a single-case investment can lose 85–95% of its value — which is exactly why funders are selective and courts stay involved.

One wrinkle that’s distinctly Quebec: unlike Ontario, our Superior Court won’t pre-approve a funding agreement’s fee structure in a class action before the case is over (E.L. v. Attorney General of Québec, 2024 QCCS 1386) — the court said it can’t judge whether a “multiplier” fee is reasonable until it knows the result. Courts here will, however, pre-approve narrower items up front, like known costs and expert fees.

Do this week: if you’re sitting on a claim you can’t afford to pursue — or facing one from a party who can’t afford to bring it — ask us whether litigation funding fits. It’s a legitimate tool, not a workaround, and structuring the agreement properly from day one avoids exactly the kind of court pushback seen in the 2024 decision above.

3. Good news for once: Quebec’s small business tax rate just dropped to match Ontario’s

Quebec has increased its small business deduction from 8.3% to 9.3%, which brings the effective small business tax rate down from 3.2% to 2.2% — for taxation years beginning after April 29, 2026. That’s the same 2.2% Ontario landed on July 1 (see our July 15 edition), so if you’re comparing provinces, the gap just closed. The reduced rate applies to Canadian-controlled private corporations on their first $500,000 of active business income, and phases out as paid-up capital climbs past $10 million or investment income passes $50,000.

Do this week: flag this for your year-end tax planning conversation, especially if your corporation is close to the $10–50 million paid-up capital band where the benefit starts phasing out.

4. Selling appliances, electronics, or TVs? Your warranty paperwork changes October 5

Quebec has published the regulation setting mandatory “good working order” warranty periods under Bill 29 (the anti planned-obsolescence law): six years for major appliances (stoves, fridges, freezers, air conditioners, heat pumps), five years for washers, dryers, and dishwashers, four years for TVs, and three years for computers, game consoles, phones, and tablets. Manufacturers must disclose these periods clearly online; retailers must hand buyers a standardized written notice right after the sale, and give a separate notice before upselling any extended warranty.

Do this week: if you manufacture, import, or sell any of these categories, get your point-of-sale notices and website disclosures drafted now — October 5 arrives faster than a Quebec winter.

Rest of Canada

5. Ontario tears up its “must live here” rule for corporate directors

As of July 5, Ontario dropped its requirement that at least 25% of a corporation’s directors be Canadian residents, aligning it with Quebec and BC, which never had residency rules. Ontario also lowered the bar for written shareholder resolutions from unanimous consent to majority approval (non-voting shareholders just need to be notified within 10 business days). If your group has an Ontario entity, board recruitment and routine governance both just got easier — unless your shareholders’ agreement already locks in unanimity.

6. Quick hit: the Competition Bureau is looking hard at grocery landlords

On June 22, the Bureau obtained court orders to investigate Empire Company (Sobeys, Safeway, IGA, Foodland, FreshCo, Farm Boy) over property-control clauses restricting how competitors can use nearby commercial space in the Halifax area. If your lease — as landlord or tenant — includes a clause limiting who a neighbouring unit can be rented to, this is worth a second look regardless of your sector.

International

7. Washington’s new 50% tariff — and USMCA doesn’t help this time

Effective in 30 days, the US is imposing a 50% tariff on a list of Canadian goods that includes wine, hockey sticks, and cement. Energy, potash, and goods already covered by sector-specific tariffs are excluded — but products normally protected under USMCA are not. The stated justification: Canadian provinces allegedly pulled American alcohol from store shelves in an earlier trade spat, and gave the EU better dairy market access than the US gets. The legal hook is Section 338 of the 1930 Tariff Act, a rarely-used and largely untested provision. Prime Minister Mark Carney has called the move a “direct violation” of USMCA and says Canada is ready to “intensify” talks with Washington.

Why it matters to you: even if your goods aren’t on today’s list, Section 338 is a broad tool and this dispute is moving fast. If you export to the US, check whether your contracts specify who eats a new tariff, and build in an adjustment clause for whatever comes next.

Business for sale? (Or shopping for one?)

A clean corporate file (see item 1!) and clear contracts (see item 7) are exactly what a buyer’s lawyer checks first. Write to us in full confidence at contact@banksavocats.com — whether you’re preparing to sell, curious what your business is worth, or looking for your next acquisition.

About the author Jade Banks is a lawyer and the founder of Banks Avocats. She advises entrepreneurs and executives in Quebec and across Canada on business law: incorporations, buying and selling businesses, commercial contracts, and compliance (Law 25, the Charter of the French Language). Her approach: plain language, practical advice, and real attention to your business goals. She and her team write this newsletter every Wednesday.

This newsletter is general information only and is not legal advice. Every situation is unique — speak with a lawyer before acting. © 2026 Banks Avocats — banksavocats.com