Canada Electronic Signature Compliance Explanation

Are electronic signatures legal in Canada? What laws primarily regulate electronic signatures?

Electronic signatures are legal in Canada, and Canadian electronic signatures are primarily regulated by the federal government’s Personal Information Protection and Electronic Documents Act (“PIPEDA”) and the Uniform Electronic Commerce Act (i.e., Secure Electronic Signature Regulations, “UECA”). Additionally, different provincial acts in Canada have specific requirements for electronic signatures.

What types of electronic signatures are recognized in Canada? What are the respective requirements?

Canada recognizes two types of electronic signatures, namely electronic signatures and secure electronic signatures.

1. Electronic Signatures

   Electronic signatures are typically any form of electronic representation that can be linked or attached to a document, such as a typed signature or a scanned handwritten signature. Regardless of the type of electronic signature, it must still serve the basic function of a signature and should:

   • Ensure that the individual who signed the document can be associated with the electronic signature;
   • Convey the individual’s intent to sign the document; and
   • Demonstrate agreement to be bound by the content of the document.

   By default, eSginGlobal electronic signatures can meet Canada’s requirements for electronic signatures

2. Secure Electronic Signatures

   Secure electronic signatures are a more secure type of electronic signature, a digital signature based on asymmetric encryption technology that relies on public key infrastructure (PKI) to manage the associated private key and public verification certificate. They are usually only required in specific situations prescribed by various provincial and federal regulations.

   According to the Secure Electronic Signature Regulations, secure electronic signatures must contain a digital signature certificate that meets the following conditions:

   • Identifies the certificate authority that issued the certificate and is digitally signed by that certificate authority;
   • Identifies or can be used to identify the person;
   • Contains the person’s public key;
   • The certificate authority is the individual or entity that issued the digital signature certificate.

What are the specific use cases in Canada that require the use of secure electronic signatures?

The following scenarios, among others, require the use of secure electronic signatures:

• Documents used as evidence or proof (see PIPEDA Part 2, Section 36);
• Seals (see PIPEDA Part 2, Section 39);
• Original documents (see PIPEDA Part 2, Section 42);
• Statements made under oath (see PIPEDA Part 2, Section 44);
• Statements declaring truth (see PIPEDA Part 2, Section 45);
• Witness signatures (see PIPEDA Part 2, Section 46).

In addition to the above situations, other provincial and federal legislation may require the use of secure electronic signatures in specific situations. In other federal or provincial legislation, the most common documents requiring secure electronic signatures for electronic signing are statutory declarations and affidavits.

In Canada, what scenarios typically require the use of traditional signatures?

Different regions in Canada have different requirements for the use of traditional electronic signatures:

1. Federal

PIPEDA does not have a list of use cases that require traditional signatures, as its electronic signature rules only apply to a few federal legal provisions listed in PIPEDA Schedule 2 or 3. Therefore, any signature requirements under federal laws not listed in PIPEDA Schedule 2 or 3 must be met through handwritten signatures, unless other legislation allows for electronic signatures or the legislation does not specify the method of execution.

2. Provincial

Certain provincial legislation excludes specific types of documents and transactions from being electronically signed. The specific exclusions are as follows:

Ontario legislation does not allow electronic signatures for:

• Wills
• Trusts established by wills
• Powers of attorney, as long as they are related to an individual’s financial affairs or personal care
• Promissory notes
• Documents prescribed or belonging to a prescribed class (no regulations yet)
• Title documents, unless they apply to contracts for the carriage of goods.

BC legislation does not allow electronic signatures for:

• Wills;
• Trusts established by wills;
• Powers of attorney, as long as they involve an individual’s financial affairs or personal care;
• Documents that create or transfer interests in land and require registration to be effective against third parties;
• Other provisions, requirements, information, or records prescribed in regulations (no regulations yet); and
• Negotiable instruments or title documents, unless they may be related to the carriage of goods.

British Columbia became the first province to allow electronic wills, which can be digitally signed and stored and have the same recognition as physical wills.

Alberta legislation does not allow electronic signatures for:

• Wills;
• Trusts established by wills or testaments;
• Enduring powers of attorney under the Powers of Attorney Act;
• Personal directives under the Personal Directives Act;
• Records that create or transfer interests in land, including mining and mineral interests;
• Surety provided under the Surety Confirmation Act;
• Promissory notes;
• Other prescribed records, or records belonging to other prescribed classes, as records or classes of records to which this Act does not apply;
• Title documents, except for contracts related to the carriage of goods.

CPA, CCQ, and any other provincial laws in Quebec may require the use of specific media (e.g., paper documents) or other procedures (e.g., notarized contracts signed with a Quebec notary) as a condition of validity. For example, CPA stipulates that the following documents must be drafted in paper form if the merchant and consumer are present and if the merchant offers to enter into such a contract before the transaction:

• Contracts signed by itinerant merchants
• Credit contracts
• Contracts that include the regular option to purchase leased goods
• Sales contracts and long-term lease contracts for used cars or motorcycles
• Contracts related to timeshare accommodation rights
• Service contracts for sequential performance involving guidance, training, or assistance
• Service contracts with fitness studios
• Contracts for sequential performance involving remote service provision
• Debt settlement service contracts

CCQ stipulates that the following contracts (and possibly others) must be notarized according to specific notarial procedures:

• Marriage contracts
• Wills
• Declarations of co-ownership
• Protective mandates and powers of attorney
• Loan instruments or releases in the case of subrogation
• Hypotheses in favor of hypothetical representatives, unless they are delivered movable hypotheses

Many documents that require notarization will be allowed to be signed remotely under special circumstances at the discretion of the notary.

Other provinces and territories

Manitoba’s Electronic Commerce and Information Act only explicitly states that negotiable instruments, including transferable title documents, cannot be signed electronically.

All remaining provincial and territorial UECA regulations do not allow electronic signatures for the following:

• Wills
• Trusts established by wills
• Powers of attorney, as long as they involve financial affairs
• Delegations and notarial acts