Mm, it actually never makes sense to transliterate for sorting. Sorting should be based on collation rules.

In French, sorting takes diacritics into account, and how it does so additionally depends on whether you're doing French French or Canadian French:

French:

cote, côte, coté, côté

Canadian:

cote, coté, côte, côté

http://userguide.icu-project.org/collation/concepts