Canada: Update On Ontario's Proposed Unclaimed Intangible Property Program

Last Updated: July 9 2013
Article by Bill Hearn

Evidently, because some owners lose or forget it, intangible property lies unclaimed in various private institutions across Ontario. This property includes amounts due under an insurance policy, unpaid wages and interests recognized by share certificates and bonds.


Like some provincial governments in Canada (including Alberta, British Columbia, Prince Edward Island and Quebec) and most state governments in the United States, Ontario is trying to get its hands on unclaimed intangible property and reunite it with its owners, or at least put such property to "good public" use.

To this end, Ontario passed the Unclaimed Intangible Property Act in 1989 but that statute was never proclaimed in force. In fact, it was repealed as of December 31, 2011 by operation of the Legislation Act 2006. Wanting another kick at the can, Ontario announced its intention in the 2012 Ontario Budget of establishing a new regime that reflects legislative developments in Canada since 1989.

Proposed Program

In the Fall of 2012, the Ontario Ministry of the Attorney-General ("AG") began a consultation regarding a proposed Unclaimed Intangible Property Program (the "Program") with a consultation document. The objective of the consultation is to get feedback from the public on what should be the key features of the Program so that legislation, regulations and policies can be tailored to address the specific situation in Ontario.

The proposed Program is based principally on the model set out in the Uniform Law Conference of Canada's ("ULCC") draft 2003 Unclaimed Intangible Property Act (the "Uniform Act"). The Uniform Act was designed by the ULCC to assist provinces and territories across Canada in designing effective and harmonized unclaimed intangible property programs. Many aspects of the Uniform Act were incorporated into the programs that now operate in Alberta (since 2008) and Quebec (since 2011). That said, each province adopted unique variations of the Uniform Act. In its consultation document, the AG states that any bill introduced by Ontario to implement the Program will likely not be drafted to wholly resemble the Uniform Act.

The main purposes of Ontario's proposed Program are two-fold: first, to reunite property owners with their lost or forgotten property through an effective mechanism of identification and recovery; and second, to allow Ontario to use unclaimed property for the benefit of Ontarians until the property is claimed.

To accomplish these twin purposes, the proposed Program contemplates:

  • any intangible property falling within the scope of the Program being considered abandoned by its owner after a certain period of time has passed during which the property has gone unclaimed;
  • holders of unclaimed property being required to make efforts to notify owners in an attempt to return the property;
  • if unsuccessful, holders being required to file a report and remit unclaimed property to Ontario through an unclaimed property administrator (the "Administrator");
  • holders who transfer unclaimed property to the Administrator in compliance with the law being relieved of all liability in relation to that property;
  • a registry being created to allow the public to determine if they have unclaimed property;
  • the Administrator being required to hold unclaimed property for owners and processing claims as they arise;
  • the Administrator being responsible for the inspection of holders and the enforcement of the Program; and
  • fines being imposed on holders for non-compliance.

Fall 2012 Consultation

The AG's Fall 2012 consultation resulted in over 30 written submissions from a broad range of stakeholders. Unfortunately, in terms of lack of transparency, Ontario has not made these submissions public such as by posting them on the Program's website (at least for the time being).

That said, from the AG's public statements and presentations, these submissions seem to have dealt with many issues including exempt holders, exempt property, abandonment periods, de minimus thresholds, records retention, transitioning, reciprocity and harmonization. There has also been considerable discussion of whether, and if so how, the proposed Program would apply (a) to federally regulated financial institutions (like banks) and (b) to gift cards and loyalty programs that are everywhere in the retail marketplace.

Spring 2013 Consultation

The AG held public meetings between June 11th and 18th as part of a Spring 2013 consultation regarding the proposed Program. These meetings were attended by many stakeholders. At each of these meetings, the AG gave a presentation summarizing the submissions it had received during the Fall 2012 consultation and then opened the meeting for discussion. The AG has confirmed that minutes of these meetings (in the form of a high level summary) will be made available to the public in the near future.

Over 40 people attended the consultation meeting on June 17th which was scheduled specifically for the financial services and retail sectors. The attendees included representatives of some of Canada's best known retailers operating some of the country's most prominent national gift card and loyalty programs. Banks were also represented, both individually and collectively (through the Canadian Bankers Association).

Some Concerns of Banks

On June 17th, representatives of the financial services sector reiterated their submission to the AG that the proposed Program should limit its ambit to property that falls under provincial jurisdiction and, for legal certainty and based on Canadian constitutional law (in particular, Parliament's exclusive legislative jurisdiction over banking), expressly exempt core banking products (including bank-issued gift cards) or products regulated under the Bank Act. For example, the Bank of Canada already operates a program under section 438 of the Bank Act that requires banks and federally-regulated trust companies to remit unclaimed balances in Canadian currency deposits as well as unclaimed cheques, drafts and bills of exchange.

Some Concerns of Retailers

Also on June 17th, representatives of the retail sector submitted to the AG that gift cards should be exempt for at least three reasons.

First, with the passage over the last five years or so of stringent consumer protection laws in many provinces (including Ontario) prohibiting expiry dates and dormancy fees for most gift cards, and given the way gift cards are sold in the marketplace and transferred by owners (i.e., "gifted" and "re-gifted" to others), it is difficult to see how the application of the proposed Program to gift cards will add value – at least in terms of reuniting the owners of unused gift card balances with their unclaimed property. That's because gift cards are almost always sold with "deliberate anonymity". If the gift card issuer is not recording the ownership of the property (when the gift card is sold) and is not tracking the transfer of the property through a registration system (when the gift card is gifted), then Ontario will never be able to reconnect the rightful owner with the unclaimed balance on their gift card.

Second, most gift cards have face values that are low dollar amounts (usually well under $100) making it impractical to impose on holders significant administrative burdens of compliance in terms of identifying and tracking owners and paying unclaimed balances to the Administrator.

And third, including gift cards in the proposed Program would also add significant costs (including bridge finance costs) that may make it commercially unviable to continue offering these innovative and convenient products that are popular with consumers. Moreover, such Program compliance costs may not be recoverable by the gift card issuer given the current prohibition on gift card activation fees under most provincial consumer protection laws.

The Alberta Model

In light of these many concerns and when, in 2008, Alberta amended its consumer protection laws to address public complaints over gift card expiry dates and dormancy fees, Alberta's Unclaimed Personal Property and Vested Property Act specifically exempted by statute unclaimed intangible property already dealt with under another enactment of Alberta or Canada (such as the Bank Act). Alberta also excluded by regulation specific products such as gift certificates (which include gift cards), loyalty programs and retail business credits.

Next Stage of Consultation - Submissions Still Welcome ... Here's One

During the Spring 2013 consultation, the AG indicated that further written submissions are welcomed until July 19, 2013. If before that deadline you would like to weigh in on the proposed Program, you may do so by writing to the AG's John Lee, Counsel at

As for me, it is submitted that Ontario should adopt the Alberta model as a careful balancing of various policy objectives. At once, this model respects Canada's Constitution and protects consumers as owners without unduly burdening holders with costly administrative requirements that ultimately may stifle innovation and be ineffective in reuniting owners with their lost or forgotten property.

The author acknowledges with thanks the help of Katherine Ruta, a summer law student at Davis LLP, in preparing this article.

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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