Looks like something is seriously broken with the font. I know a number of ways to make it misbehave, but the black part of Québec should display correctly in all known failing scenarios. Since the city screen tells you that the city is named Québec, the game is clearly aware of this and haven't failed to read the name from the XML files.
It looks to me like you gain the wrong sprites from GameFont.tga. However I have no idea what causes it to do something like this. From the looks of it, you request characters like 81, but you get character 85xx (the religion icons). It's not even remotely close enough to be an offset bug.
Do anybody else experience this problem?
SeppL: does the city names appear correctly in vanilla or other mods?