Saskatchewan is in the process of updating its consumer
protection legislation with respect to the sale and leasing of
motor vehicles. The current draft legislation, Bill No. 55 The
Consumer Protection and Business Practices Act (the
"Proposed Act"), which will amend and repeal current
consumer legislation in Saskatchewan, has been circulated for
comment. The Canadian Finance and Leasing Association
("CFLA") was asked to comment on the regulations and the
CFLA provided a detailed letter setting out its concerns.
Below is a list of concerns we think will be most problematic
for motor vehicle financiers in Saskatchewan.
1. The regulations contemplated in connection with the Proposed
Act would necessitate a dealer license for any person carrying on a
business of a dealership. "Dealership" is defined broadly
to include a business that sells or leases vehicles or offers
vehicles for sale or lease, solicits orders for the future delivery
of vehicles, takes vehicles on consignment, and even includes a
business that merely advertises the selling, leasing or consignment
of an interest in a vehicle. Neither the definition of
"dealer" nor "dealership" limits the
interactions captured to those dealings with a consumer.
2. The definition of "vehicle" is also problematic as
it includes any device in which a person or thing may be
transported on a highway, this definition goes beyond those
vehicles meant for household or family uses, which consumer
protection legislation is typically meant to regulate.
The critical result of the two
concerns above could mean that any company which participates in
any of the aforementioned activities for commercial purposes will
be caught by the definition of "dealer" and therefore
require a license under the Proposed Act.
3. While the draft legislation exempts "a person, other
than a wholesaler, that sells vehicles to dealers" from the
license requirements under the Proposed Act, it is unclear how far
this exemption will extend in practice. Presumably, this is meant
to protect lenders who sell motor vehicle collateral in an
insolvency or bankruptcy situation, however it is unclear if these
sales to dealers would be caught. Asset purchase agreements between
two commercial parties which transfer an interest in one or more
vehicles is another type of transaction which the legislation might
inadvertently require a dealer license be obtained.
We will be monitoring Bill 55's development. We hope the
current consultation period brings these concerns to light and
either the definition of dealer and dealership is narrowed or the
exemption is broadened so as to exclude commercial transactions
from the reach of what is meant to be consumer protection
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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