Overview of electronic signature law and its legality in Canada

You spend a ton of time in the office, signing doc after doc, (hopefully) eliminating the heaping pile of paper. Who knows how long this could take, maybe one, two, or three plus days. Often it looks like there is no end in sight.

Sound familiar? Nearly half of companies today still print documents and sign them. 22% of organizations spend over a week collecting physical signatures. But why do business owners let their employees and themselves suffer when electronic signatures exist?

In Canada, many people believe that physical signatures have greater legitimacy than digital ones. But this isn’t true, according to Canadian electronic signature law, 95% of documents and transactions can be verified electronically.

Are electronic signatures legal in Canada?

Canada is known for its flexible and technology-friendly approach to the document signing process. But unlike a majority of countries worldwide, Canada is a federation that consists of 10 provinces and three territories.

This means that both federal and provincial law regulates eSignatures. Contract law in Canada is provincial, so the validity of each agreement reached between two or more parties (unless they are regulated federally) is governed by the law of each province.

Federal and provincial eSignature law in Canada

On the federal level, the use of eSignatures was officially endorsed by the Personal Information Protection and Electronic Documents Act (PIPEDA). The act became in effect in 2004. According to the law, each kind of eSignature is equivalent to a physical one and are fully court-admissible. Each company operating in the Canadian market is free to use both digital and paper documents — the law recognizes them as equally valid.

However, PIPEDA has reiterated the explicit requirements for an electronic signature to be secure. According to them, an eSignature should be:

  • Unique and distinctive
  • Created under signer’s sole control
  • Can confirm the identity of the signer
  • Protected by the technology that can detect any subsequent changes in the document

This means that you can’t just draw an “X” or another kind of icon to sign your document. Marks like these can’t be identified as unique and can’t prove your identity.

On the provincial level, eSignatures have been accepted by law since 1999, as a part of the Uniform Electronic Commerce Act (UECA). Nine provinces use this act as a universal set of legislation when Quebec is the only province that has its own electronic signature laws stated in the Act to Establish a Legal Framework for Information Technology.

The requirements for eSignatures of UECA and PIPEDA are quite similar, and both laws are “media neutral” and follow the “minimalist” approach to digital transactions. So the digital form of the document is not the reason to consider it invalid or unenforceable.

So let’s recap everything we mentioned above:

 

Can I use eSignatures for business in Canada? Are eSignatures court-admissible in Canada? What is the legal model of an eSignature in Canada?
Yes, Canadian eSignature laws allow signing documents without ink and pen in 95% of all cases.* Yes, you can provide a digital document signed electronically as evidence in court as well as a paper one. An electronic signature law in Canada uses open model. It means that any e-signatures are legally-binding, unless the contrary was proven.

* The list of exceptions will be provided in one of the next paragraphs.

Standard electronic signature in Canada and its use cases

Canadian law doesn’t recognize advanced or qualified electronic signatures like the higher levels of assurance often classified in other countries. Canada only has a standard electronic signature (SES), defined by UECA as “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.”

You can sign contracts, quotes, proposals, invoices, and many other kinds of documents electronically. Electronic signature laws in Canada outline only a few exceptions where you still need to print a document and sign it by hand. Those are:

  • Wills and codicils
  • Trusts created out of wills and codicils
  • Certain powers of Attorney
  • Divorce and adoption family law documents
  • Some legally required disclosures to consumers
  • Official court documents
  • Some real estate agreements
  • Promissory notes

If you work with public bodies (governmental departments, agencies, and ministries), you should consider each of their requirements. Each may set their own technological standards for eSignatures.

Also, it is highly recommended to discuss the potential to apply electronic signatures to all parties involved in the business transaction to avoid any misunderstandings.

Use PandaDoc to eSign documents

Do you run a business in Canada and want to streamline your document workflow? PandaDoc to the rescue! We designed our software to be fully compliant electronic signature laws in 42 countries, including Canada.

Aside from unlimited opportunities for eSignatures creation, PandaDoc has many advanced features for eSigning including signing order, multiple approval workflows, and document forwarding for signing. After switching to our software, companies reduce time spent on paperwork and significantly increase their revenue. The experience of Tapfluence is the evidence alone, the company saved 15 hours per week and boosted their close rate by 57%.

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