The Government of Ontario has commenced a consultation on a new proposed Unclaimed
Intangible Property Program. The possibility of this new program
for unclaimed property was mentioned in the 2012 Budget and
reported on in a previous
post. The Government has released a consultation paper, which includes a series of
questions. The deadline for submissions is October 12, 2012. Given
the additional burden this may pose for businesses, it is to be
hoped that the consultation period is extended.
The Government of Ontario is proposing that the new program for
unclaimed intangible property would be based on the Uniform Unclaimed Intangible Property Act,
which was developed by the Uniform Law Conference of Canada. This
form of legislation would impose upon Ontario business the
obligation to take prescribed steps to notify owners of abandoned
unclaimed property. If the property remains unclaimed, holders must
file a report and transfer the property to the Government of
Ontario, which then can use the property until it is claimed (if
ever). There would be fines for non-compliance. The Government of
Ontario would maintain a publicly searchable registry of the
property it has received. Owners may file a claim for the
What constitutes "property" for the purposes of the
new program is up for grabs. The breadth of that definition will
directly affect the number and types of business that will face
additional administrative burdens. If, for example, Ontario were to
include gift certificates and gift cards, this would have
significant implications for Ontario retailers.
Another issue that is open for debate is the time period after
which property should be considered to be abandoned. The general
period of time is five years. Thus far, there has been insufficient
consideration given to the interaction between Ontario's Limitations Act,
2002 and an unclaimed property program. Legislation tends to
ignore the effect of limitation periods on the enforceability of
intangible property rights and, therefore, the issue of whether the
property should be considered abandoned or the property rights
considered unenforceable. In Ontario, the basic limitation period
is two years from the date of discovery of the claim or the date on
which a reasonable person with abilities and in the circumstances
of the person could have discovered the claim. However, the
limitation period for demand obligations does not commence until a
demand for performance is made.
The issue of limitation periods is also relevant to the
transitional provisions of for an unclaimed intangible property
program. Ontario is proposing not to enact a transitional period
that would have exempted property that became unclaimed more than
five years before the coming into force of the legislation. The
effect of this is uncertain. Apart from the problem that businesses
may have records for the past seven years, some businesses may have
considered the rights of the property holders unenforceable for
accounting purposes, provided the obligation was not a demand
During the consultation period, the Government is asking:
Whether any modifications to the Uniform Unclaimed Intangible
Property Act should be made?
What types of property should be included or excluded? Do
certain types of property present unique challenges?
Are the time periods for considering property abandoned in the
Uniform Unclaimed Intangible Property Act appropriate?
What are the challenges for businesses in transitioning into
the new program?
Are there additional issues that the Government should be aware
How should the Government continue the consultation as the new
program is developed?
The consultation document is available here. Remember, the consultation deadline is
October 12, 2012.
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