What are the relevant laws governing electronic signatures in Canada?
The federal government has enacted the Personal Information Protection and Electronic Documents Act (“PIPEDA”) that, among other things, states that a signature requirement in one of the specified provisions of federal laws is satisfied by an electronic signature. PIPEDA only applies to specific provisions of specific federal statutes; therefore, it leaves more gaps in the permissibility of electronic signatures than are seen at the provincial level. However, some other federal statutes have independently incorporated language explicitly permitting electronic documents and signatures (e.g., the Canada Business Corporations Act has its own provisions setting out terms for use of electronic documents).
Alberta, British Columbia, and Ontario have enacted legislation based on the Uniform Electronic Commerce Act of Canada (“UECA”), which is a piece of model legislation rather than a binding piece of legislation:
- Alberta: Electronic Transactions Act (2001) (“Alberta Act”)
- Ontario: Electronic Commerce Act (2000) (“Ontario Act”)
- British Columbia: Electronic Transactions Act (2001) (“BC Act”)
Quebec has adopted its own legislation governing electronic transactions and commerce, namely the Act to establish a legal framework for information technology (the “Quebec Act”). Certain requirements related to electronic transactions and commerce are also governed by the Civil Code of Quebec (“CCQ”) and the Consumer Protection Act (“CPA”).
When the law is silent on how a document must be delivered or executed, electronic delivery and signatures are usually acceptable under Provincial Legislation. If the legislation has specific guidance regarding document delivery or execution (e.g., paper, in writing, non-electronic, signature is required, etc.), the document can only be provided and executed electronically if permissible under the relevant law.
What constitutes an electronic signature in Canada?
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.”
PIPEDA also recognizes — and requires — the use of a secure electronic signature in certain circumstances. A secure electronic signature is an electronic signature that results from the application of a technology or process prescribed by regulation, with the regulations setting out a specific set of consecutive operations that must be completed for the signature to qualify.
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 that “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”.
Does Canada recognize the DocHub electronic signature as a valid type of electronic signature?
Yes, the electronic signature created using the DocHub platform constitutes a valid type of electronic signature under the Alberta Act, the Ontario Act, the BC Act, and PIPEDA, but it does not constitute a secure electronic signature under PIPEDA. It also constitutes a signature under the Quebec Act.
What are examples of electronic signature use cases?
The following are some common types of transactions and agreements that may be signed electronically:
- HR documents, such as regular employment contracts, non-disclosure agreements, employee invention agreements, privacy notices, benefits paperwork, and other new employee onboarding processes;
- Commercial agreements between corporate entities including non-disclosure agreements, purchase orders, order acknowledgements, 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., change of address or directors), share subscriptions, and shareholders agreements (subject to some narrow exceptions, such as share certificates requiring manual execution in BC);
- Consumer agreements including new retail account opening documents, sales terms, services terms, software licenses, purchase orders, order confirmations, invoices, shipment documentation, user manuals, and policies;
- Chattel paper in Ontario (other jurisdictions do not yet appear to have updated their legislation to explicitly contemplate electronic chattel paper);
- Unless otherwise specifically exempted under their respective legislation, certificates, licenses, notices, disclosure, reports, etc. from governmental entities; and
- Certain intellectual property licenses and transfers, such as trademark licenses and assignments.
Are electronic signatures prohibited or not allowed for any transactions?
PIPEDA requires use of secure electronic signatures in certain circumstances (e.g., application of a person's seal, requirements for original documents, requirements for witnessed signatures, statements declaring truth, and statements made under oath).
For Alberta, BC, and Ontario, below are examples where a traditional ink signature is generally required:
- Wills and codicils
- Trusts created by wills or codicils
- Powers of attorney to the extent that they concern the financial affairs or personal care of an individual
- Records that create or transfer interests in land
- Negotiable instruments
- Documents of title, except for contracts related to the carriage of goods
For Quebec, the following may or must be made by notarial act:
- Marriage contracts
- Declarations of co-ownership
- Protection mandates and powers of attorney
- A loan instrument or acquittance in the context of subrogation
- A hypothec in favor of a hypothecary representative, except in the case of a movable hypothec with delivery
In addition, in Quebec certain kinds of contracts between merchants and consumers can only be entered into electronically if the merchant and consumer are not in each other's presence at the time of contracting (in other words, the contract is being entered into remotely).
Note that for federal law, PIPEDA does not have a list of exemptions because its electronic signature rules apply only to a small number of provisions of federal law; therefore, any signature requirement under federal law that is not enumerated in a specified schedule under PIPEDA must be satisfied with an ink signature unless another provision of federal law allows for electronic execution.
Also, it is generally not recommended using electronic signatures for promissory notes — they should typically be executed in original, using only one copy.
Do parties need to consent to use electronic signatures in Canada?
Provincial laws do not have any formal consent requirements for private parties when using electronic records and signatures. A party, however, must consent to using, providing, or accepting information in an electronic form. Consent may be inferred from a person's conduct if there are reasonable grounds to believe that the consent is genuine and relevant to the information or record. Under the Alberta Act and the Ontario Act, however, the consent of a public body can only be given by explicit communication. Under PIPEDA, providing certain documents electronically instead of physically may require agreement of both parties. However, agreement to the use of electronic documents can reasonably be inferred from the facts and circumstances (e.g., if a party has attached their electronic signature to an electronic document, this provides evidence of consent).
What are the key factors pertaining to the enforcement of electronic signatures in Canada?
Provided an electronic signature is permissible under, and in compliance with, applicable law, it cannot be denied effect solely because it is in electronic form. However, if the authenticity is challenged, the party seeking to enforce the electronic signature may need to provide further evidence establishing the signature’s validity.
* Disclaimer: This page is for informational purposes only. This page is designed to provide a background on the legal framework for electronic signatures in the respective country. This page is not legal advice and should not be used or relied upon as legal advice. You should seek legal counsel regarding any legal questions you have regarding the use of electronic signatures in this jurisdiction. To the maximum extent permitted by law, DocHub provides this page and the material on this page on an “as-is” basis. DocHub disclaims and makes no representation or warranty of any kind with respect to this page or the material on this page, express, implied or statutory, including representations, guarantees or warranties of merchantability, fitness for a particular purpose, or accuracy.