Ontario is Consulting on Possible Business Law Amendments

October 25, 2019 | Jennifer Babe

On October 11, 2019 the Ministry of Consumer and Government Services posted some of the recommendations for changes to Ontario’s business laws proposed by its Business Law Modernization and Burden Reduction Council (the “Council”).

The Council is a group of lawyers providing pro bono services and a former Justice of the Ontario Courts who have been appointed by the Minister  for a short term to provide recommendations for modernizing Ontario’s business and commercial statutes.   Two members of the Council are Miller Thomson lawyers, Jennifer Babe and Andy Chan.

The consultation document may be found on Ontario’s Regulatory Registry website. There is a response form included on this website. Responses are due by November 26, 2019.

These recommendations if enacted, would  bring efficiencies and other benefits for businesses of all kinds,  including private corporations, franchisors, franchisees, lenders and lessors.

Each recommendation is briefly noted below.  The consultation document contains more information and specific questions addressed for respondents to answer:

A. Ontario Business Corporations Act (“OBCA”):

1) remove the requirement in the present OBCA that requires at least 25% of the directors be Canadian residents.   If enacted this would align Ontario with the corporate laws statutes of British Columbia, New Brunswick, Northwest Territories, Nova Scotia, Nunavut, Prince Edward Island, Quebec, and the Yukon;

2)  lower the limit for private company shareholders to pass a resolution in writing from a unanimous resolution to a resolution by a majority of shareholders;

3)  allow corporations to relieve or limit the liability of fiduciaries, such as directors and officers, arising from the corporate opportunity doctrine by allowing such fiduciaries to pursue certain business opportunities;

B. Arthur Wishart Act (Franchise Disclosure), 2000

4)  a series of possible technical changes, including  the manner of determining the prospective franchisee’s “Total Initial Investment”, the accounting standards for Disclosure Documents, amounts of deposits from the franchisee in certain circumstances, and changes to the minimum and large investment threshold amounts for exemptions from disclosure;

C. Personal Property Security Act (Ontario) (“PPSA”):

5) allow the Registrar of the PPSA to file discharges for vexatious registrations from the Registry.    The Registrars in Manitoba and Alberta presently have such power in certain circumstances;

6)  amend the Act to enable perfection by control of cash collateral, as now exists in the United States and in Quebec. This would allow parties in certain transactions such as future pricing for utilities or commodities, currency hedging and derivatives to facilitate their use of cash as security  expeditiously via perfection by  “control” as now exists for certain other classes collateral.

The question here is focused on the section of the PPSA that provides priority for beneficiaries of certain trusts under Ontario’s  Pension Benefits Act, Pooled Registered Pension Plans Act, 2015 and Employment Standards Act over the debtor employer’s accounts and that priority as against the priority for perfection by control for cash collateral in the employer’s accounts; and

7) examining the opportunities to modernize the PPSA Registry computer system, , including amending the definition of “motor vehicles” to include more types of goods such as tractor trailers and ATVs.

If you have views on  any of the foregoing, please consider completing the response form.


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