Quebec’s recently enacted French-language law is causing some Canadian businesses concerns about compliance and even fear of losing employees, a new business risk report from Beazley suggested.
Bill 96, An Act respecting French, the official and common language of Québec, became Law 14 this June. The law requires written publications and “documents,” which includes insurance, to be in French. There can be a version in English or another language, as long as a French version is available.
Ongoing supply chain issues along with new legislation appear to be on Canadian business executives’ minds, Beazley said in its first-ever Canada Snapshot Report – Risk & Resilience in a Time of Change, published Tuesday. Twenty-two per cent of 500 polled Canadian firms said business interruption is the largest risk they face right now.
Under the law, businesses with operations in Quebec with contracts of adhesion now need to present documentation in French-only first.
“[This is] resulting in some businesses struggling to adapt to the far-reaching impacts of the new law, and having to engage legal expertise and translation services to keep their business on-side with the updated guidelines,” Beazley said in the report.
“Firms with operations in Quebec navigating the implications of Bill 96 that don’t have local or in-house legal or translation resources, can find the requirements of the bill complex and time-consuming,” said Kim Podolak, broker relations manager for Canada with Beazley.
Beazley even suggested small businesses are at risk of losing their employee base (and theoretically customers) as they will be required to declare the proportion of their workforce that are unable to communicate in French. “This comes at a time where there is a challenge to recruit and retain talent.”
Canadian Underwriter has heard concerns that the French-language law may prompt small insurance providers to consider pulling out of the province. Curtis Killen, president and commercial insurance broker at KBD Insurance, a brokerage with offices in Montreal and Ottawa, told CU he had one small client who already decided to pull out of the market rather than translate their insurance policies into French.
But he said other insurance providers, such as small Lloyd’s coverholders or brokers, may be affected by the law.
“If you’re a coverholder, a lot of times the software to issue the policies, you can only issue the policy in one language,” said Killen, who is also a Lloyd’s coverholder. “You can’t do it in both. And so, it creates a lot of back-end administrative work.”
Beazley’s Canada Snapshot Report also found 35% of Canadian business leaders say they operate in a high-risk environment, up from 20% in 2022. This perception is set to risk to 37% as recessionary fears have grown among the G7 country’s leading economists.
Nearly one-third (32%) of business executives said they are unprepared to deal with business interruption risks, rising to 34% among small businesses (Cdn$250,000 to Cdn$999,999 in revenue).
The report also found:
29% of Canadian firms feel unprepared to deal with climate risks and disruptive technologies such as artificial intelligence;
30% of Canadian boardrooms ranked cyber risk at the top technology threat facing their business in 2023, but 31% of boardrooms report being unprepared to deal with cyber risks; and
32% plan to explore insurance options that include risk and crisis management.
Feature image by iStock.com/peeterv