Quebec Court of Appeal Rules on the Limits of CPA Professional Secrecy for Financial Whistleblowing

On November 12, 2024, the Quebec Court of Appeal (QCA) rendered a significant decision in Autorité des marchés financiers c. Ordre des comptables professionnels agréés du Québec (available in French only) relating to section 17.0.1 of Quebec’s Act respecting the regulation of the financial sector (Act), which sets out whistleblower protections for anyone who discloses information on violations of laws governing the financial sector. Under section 17.0.1, a person may report a client’s wrongdoings despite any binding duty of confidentiality towards such client, including with respect to professional secrecy (i.e., privilege).

Quebec’s order of chartered professional accountants, l’Ordre des comptables professionnels agréés du Québec (Ordre), questioned the constitutional validity of section 17.0.1, arguing that it was not applicable to chartered professional accountants (CPAs). The Ordre submitted that section 17.0.1 could result in CPAs violating their clients’ rights to privacy and professional secrecy, which are protected under Quebec’s Charter of Human Rights and Freedoms (Quebec Charter). Contrary to the trial judgment rendered on the matter, the QCA rejected the Ordre’s arguments and held that section 17.0.1 was constitutionally valid and applicable to CPAs.

Section 17.0.1 and Relevant Provisions of the Quebec Charter 

Introduced in 2018, section 17.0.1 of the Act is intended to protect any person, other than a notary or lawyer, who provides Quebec’s securities regulatory authority, the Autorité des marchés financiers (AMF), with information on violations of the laws governing the financial products and services sector, including Quebec’s Securities Act and Act respecting the distribution of financial products and services. It provides protections for whistleblowers despite any binding duty of confidentiality towards clients, among others.

Under sections 5 and 9 of the Quebec Charter, every person has a right to respect for their private life, as well as a right to professional secrecy. Section 9 further provides that no person bound to professional secrecy by law – including CPAs – may disclose confidential information revealed to them in their profession, unless they are authorized to do so by the person who confided such information to them or by an express provision of law.

Quebec Superior Court Decision 

The trial judge, Justice Marc Saint-Pierre, allowed the Ordre’s application and ruled that section 17.0.1 of the Act violated the right of CPAs’ clients to respect of their private life, a protection ensured by section 5 of the Quebec Charter. According to the trial judge, such violation could not be justified under section 9 of the Quebec Charter, which provides courts with the ability to rule on the validity of legislative provisions that violate a Quebec Charter right.

Quebec Court of Appeal Decision 

The QCA released a decision rendered by Justice Michel Beaupré that overturns the trial judgment. It held that section 17.0.1 of the Act was indeed an “express provision of law” that provided an exception for the right of CPAs’ clients to professional secrecy, pursuant to the terms of section 9 of the Quebec Charter.

The QCA further determined that section 17.0.1 does not violate the right of CPAs’ clients to professional secrecy, a right that is protected under section 9 of the Quebec Charter. According to the QCA, a person’s reasonable expectation as to the respect of their private life is lower for commercial documents submitted to a CPA than for fundamentally personal information involving, for example, “the right to autonomy in planning their personal and family life” (le droit à l’autonomie dans l’aménagement de sa vie personnelle et familiale) or “elements pertaining to [their] health, love life or sexual orientation” (les éléments relatifs à l’état de santé, la vie amoureuse ou l’orientation sexuelle). This expectation is more diminished, if not downright “low” (faible) or “very low” (très peu élevée), for commercial activities regulated by the AMF, particularly in the securities and financial services sectors. The QCA determined that the scope of the right to professional secrecy differs between CPAs’ clients versus lawyers’ and notaries’ clients. It found that by allowing CPAs to disclose their clients’ information to denounce violations of laws governing the financial sector, section 17.0.1 does not itself violate the right of such clients to professional secrecy.

However, the QCA did reaffirm the right to professional secrecy for clients of lawyers and notaries, as well as litigation privilege, despite section 17.0.1 of the Act. As such, information that is covered by professional secrecy between a lawyer or notary and a client remains privileged when such information is held by a CPA, as is the case for information provided by a lawyer to a CPA for the purpose of preparing litigation.

Conclusion

The QCA’s decision in this matter reiterates the importance of public protection within the financial sector. It also reaffirms the legitimacy of the whistleblower mechanisms provided for in the Act. In rendering its decision, the QCA set an important precedent for financial sector professionals and regulators by clarifying the professional secrecy limits applicable to CPAs and the conditions under which such privilege may be waived for public interest reasons.

Should this decision be appealed before the Supreme Court of Canada, we will keep you up to date on this matter in future publications.