British Columbia, which presently does not have a franchise
specific statute, recently took one step closer to implementing
such legislation when the British Columbia Law Institute
("BCLI") recommended the passage of a
franchise act in its recent report titled Report on a Franchise
Act for British Columbia (March 2014) (the
"Report"). This was a followup to the
Consultation Paper on a Franchise Act for British Columbia
(March 2013) (the "Consultation Paper")
and took into consideration the feedback generated by the
The BCLI stressed the positive response received to the
implementation of British Columbia franchise legislation, noting
that all respondents to the Consultation Paper saw benefits in the
introduction of franchise legislation in British Columbia and none
opposed the enactment of franchise legislation in principle.
As a result, the Report recommends that British Columbia enact
legislation (the "Proposed Act"), based
on the Law Reform Commission of Canada's Uniform Franchises
Act, similar to that which other Canadian provinces have
Passage of legislation by BC would further harmonize the
regulatory regime in Canada and the recommendations of the BCLI
appear to improve upon the existing provincial statutes. Of course,
recommendations by the BCLI may not result in the passage of
legislation soon or ever. Although, the odds are that the British
Columbia legislature will take up the suggestions of the BCLI and
sooner than later.
The Report also recommended that the Proposed Act:
should not include an exemption from disclosure requirements
for investments below a prescribed amount;
should not require location assistance for the exemption from
disclosure requirements for grants of a franchise agreement with a
term of less than one year that do not involve non-refundable
provided other criteria are met, should not require franchisors
with a minimum net worth of $5,000,000 (or $1,000,000 if the
franchisor is controlled by a corporation with a net worth of at
least $5,000,000) to disclose their financial statements to
should not include compulsion for mediation of franchise
should provide that disclosure documents are valid if they are
in substantial compliance with the legislation and regulations
(minor defects should not to lead to consequences such a right of
should permit fully refundable deposits to be paid to a
franchisor prior to disclosure;
should require that the disclosure documents specify whether or
not an exclusive territory will be granted under the franchise
should require that the disclosure documents specify if a
franchisor is reserving any rights to sell goods and services
directly by such franchisor and specify the intended distribution
should permit delivery of a disclosure document by electronic
should include a statutory right to sue for misrepresentation
for misleading statements made in financial projections supplied by
the franchisor before a franchise agreement is signed unless
cautionary language is included in the projection;
should permit wrap-around disclosure documents (being
disclosure documents that comply with the legislation of a
different jurisdiction and which are supplemented with additional
information required by the Proposed Act);
should specify that the application of the Proposed Act cannot
be avoided in respect of both claims arising under the Proposed Act
and claims arising from a franchise agreement by including a
jurisdiction clause or foreign law clause. This section should also
expressly state that it applies to arbitration;
should specify that any statutory right of rescission does not
bar the franchisee from pursuing statutory damages provided that
double recovery does not occur;
should clarify that any statutory presumption deeming reliance
on a misrepresentation in a disclosure document by a franchisee
cannot be used by a franchisor to assert that the franchisee would
have entered into the franchise agreement even if the franchisee
had been aware of the trust facts; and
should specify that any statutory bar to waiving or releasing a
right under the Proposed Act does not prevent a waiver or release
that is part of a post-dispute settlement.
The report can be found at
and provides a detailed review of the proposed legislation.
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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