Electronic Signature Legality Across Provinces – Canada

Which laws govern electronic signatures in Canada?

Federal Legislation-

According to the Personal Information Protection and Electronic Documents Act (“PIPEDA”), a signature requirement under certain federal laws can be satisfied by an electronic signature, among other things. As PIPEDA only applies to specific provisions of specific federal statutes, electronic signatures are more permissible at the federal level than at the provincial level. Some other federal rules have explicitly allowed electronic records and signatures (e.g., the Canada Business Corporations Act has provisions governing electronic records).

Provincial Legislation-

Legislation has been enacted in Alberta, British Columbia, and Ontario based on the Uniform Electronic Commerce Act of Canada (“UECA”), which is a model statute rather than binding legislation:

• British Columbia: Electronic Transactions Act (2001) (“BC Act”)
• Ontario: Electronic Commerce Act (2000) (“Ontario Act”)
• Alberta:Electronic Transactions Act (2001) (“Alberta Act”)

The Quebec Act establishes a legal framework for information technology (the “Quebec Act”) that governs electronic transactions and commerce in the province. The Civil Code of Quebec (“CCQ”) and the Consumer Protection Act (“CPA”) also govern specific requirements related to electronic transactions and commerce.

Electronic delivery and signatures are usually acceptable under Provincial Legislation when the law does not specify how the document must be delivered or executed. As long as the legislation specifies that the document must be provided and executed electronically (e.g., on paper, in writing, non-electronic, signature required, etc.), it can only be delivered and executed electronically if the relevant law permits it.

Find out what qualifies as an electronic signature in Australia-

• PIPEDA : An electronic signature is a “signature that consists of one or more letters, characters, numbers or other symbols in digital form incorporated in, attached to, or associated with an electronic document.”
  

  Some circumstances under PIPEDA require a “secure electronic signature.” To qualify for a secure electronic signature, a specific set of consecutive operations must be completed following the regulations, which specify a set of technologies or processes that must be applied.

• Alberta Act : An electronic signature is “electronic information that a person creates or adopts in order to sign a record and that is in, attached to or associated with the record.”
• Ontario Act : An electronic signature is “electronic information that a person creates or adopts in order to sign a document and that is in, attached to or associated with the document.”
• BC Act : An electronic signature is “information in electronic form that a person has created or adopted in order to sign a record and that is in, attached to or associated with the record.”
• Quebec Act : The Quebec Act does not define “electronic signature” but provides “the link between a person and a document, whatever the medium used may be established by a person’s signature.” A “signature” is defined in the CCQ as “the affixing by a person, to a writing, of his name or a mark distinctive to him which he regularly uses to signify his consent.”

What are the documents that may be signed electronically?

Electronic signatures are commonly used for the following types of transactions and agreements:

• Documents related to human resources, including regular employment contracts, non-disclosure agreements, employee invention agreements, privacy notices, benefits paperwork, and other onboarding processes;
• It includes non-disclosure agreements, purchase orders, order acknowledgments, invoices, other procurement documents, software license agreements, tool license agreements, component supply agreements, sales agreements, distribution agreements, and service agreements;
• Corporate documents, such as instruments of transfer, directors resolutions, shareholders resolutions, government filings indicating updates to corporate information (e.g., a change in address or a change in directors), share subscriptions, and shareholder agreements (subject to some narrow exceptions, such as share certificates in British Columbia which require manual execution);
• Agreements with consumers, including new retail account opening documents, sales terms, services terms, software licenses, purchase orders, order confirmations, invoices, shipment documentation, and user manuals;
• Electronic chattel paper in Ontario (other jurisdictions do not appear to have updated their legislation to include it explicitly);
• Certificates, licenses, notices, disclosures, reports, etc., from governmental entities, unless specifically exempted by their legislation; and
• Transfers and licenses of intellectual property, such as trademark licenses.

Are electronic signatures prohibited for any transactions?

You cannot use electronic records or signatures for the following:

In certain circumstances, PIPEDA requires using secure electronic signatures (e.g., when applying a seal, requiring original documents, requiring witnessed signatures, or making oaths).

The following are examples of when a traditional ink signature is required in Alberta, BC, and Ontario:

• Wills and codicils
• Trusts created by wills or codicils
• A power of attorney relating to a person’s financial affairs or personal care
• Land records that create or transfer land interests
• Negotiable instruments
• Except for contracts associated with the carriage of goods, documents of title

In Quebec, the following may or must be notarized:

• Marriage contracts
• Wills
• Declarations of co-ownership
• Mandates and powers of attorney for protection
• In the context of subrogation, a loan instrument or acquittance
• Except in the case of a movable hypothec with delivery, a hypothec in favor of a hypothecary representative

As well, certain types of contracts between merchants and consumers in Quebec can only be entered into electronically if the merchant and consumer do not meet in person at the time of contracting (i.e., the contract is being entered remotely).

Since PIPEDA’s electronic signature rules cover only a small number of federal laws, it doesn’t have a list of exemptions. Therefore, unless another provision of federal law allows electronic execution, any signature requirement under federal law that is not enumerated in a specified schedule under PIPEDA must be satisfied with an ink signature.

Promissory notes should typically be executed in original, using only one copy, without electronic signatures.

Is consent required for electronic signatures in Canada?

Provincial laws do not necessitate formal consent from private parties to use electronic records and signatures. It is nonetheless expected that consent has been given for the provision, use, or acceptance of information electronically; such agreement may be inferred from a person’s behavior if it is plausible that their consent is genuine and relevant to the said data or record. Nevertheless, according to both Alberta and Ontario Acts, express communication is required to provide consent from a public body.

There may be a requirement for both parties to agree to the electronic delivery of certain documents instead of the physical delivery under PIPEDA. However, a party’s agreement to use electronic documents can be concluded from the facts and possibilities (e.g., a party’s electronic signature provides evidence of consent if it is attached to an electronic document).

What factors led to the enforcement of digital signatures in Canada?

The fact that an electronic signature is in electronic form does not negate its effect if it is permissible under and in compliance with applicable law. The party seeking enforcement may need to provide additional evidence proving the signature’s validity if the authenticity is challenged.