The stated purpose of franchise legislation in Canada is to
ensure the disclosure of pertinent information by franchisors to
prospective franchisees and, to some extent, to alleviate the power
imbalance existing between franchisors and franchisees.
Manitoba recently introduced legislation to govern the sale and
operation of franchises. New Brunswick did so earlier.
Manitoba Franchise Legislation
Bill 15 The Franchises Act of Manitoba received its
third reading and Royal Assent on June 17th, 2010, but regulations
are still being drafted.
Bill 15 is modelled on The Uniform Franchises Act of
the Uniform Law Conference of Canada and has been used by some of
the other provinces. As a result, The Franchises Act is
similar to many of the existing franchising statutes of other
provinces. This will make it easier for franchisors who operate in
multiple regulated provinces to comply with the requirements under
Bill 15 imposes duties and obligations on both parties to a
franchise agreement, including:
A duty of fair dealing by each party.
An absolute right of a franchisee to associate with other
Disclosure of specified information by a franchisor delivering
a disclosure document to a franchisee at least 14 days before the
franchisee signs a franchise agreement. The required disclosure
includes a copy of the franchise agreement and related agreements,
financial statements of the franchisor and, generally, all material
facts about the franchisor and the franchise system. If all
required information is not disclosed by the franchisor, the
franchisee may cancel the agreement within a certain period of
A franchisee may sue a franchisor for any loss suffered because
of a misrepresentation or omission in the information
A franchisee cannot waive its rights under The Franchises
Regulations to Bill 6 The Franchises Act were issued on
June 10th, 2010. The Regulations provide disclosure requirements
which are similar to those currently in force in Ontario. However,
the New Brunswick Regulations state that they will not come into
force until February 1, 2011 and therefore could be amended by the
legislature in the meantime.
A copy of the New Brunswick Franchises Act is available
Five of the ten provinces of Canada now have franchise
legislation, however only Alberta, Ontario and Prince Edward Island
legislation is in force at this time. As outlined above, New
Brunswick and Manitoba have draft franchise legislation, but their
Regulations must be finalized before the legislation will be
declared in force. Franchise legislation in New Brunswick and
Manitoba will come into force on dates fixed by proclamation of
We will advise you as each proclamation is made.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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