Canada: Ontario’s Proposed Mortgage Brokerages, Mortgage Lenders and Mortgage Administrators Act, 2006

Last Updated: March 15 2006
Most Read Contributor in Canada, September 2016

By Rebecca C.W. Chan, Jeffrey S. Graham and R. Andrew Harrison

(a) Background

On February 20, 2006, the Ontario government introduced Bill 65, the new Mortgage Brokerages, Mortgage Lenders and Mortgage Administrators Act, 2006 ("Bill 65" or the "New Act").1 Bill 65 marks the first major overhaul of the Mortgage Brokers Act (the "Current Act") in over 30 years. Bill 65 is the product of two consultation rounds and extensive industry input. Regulations for the New Act are also expected to be tabled for discussion in the coming months, prior to proclamation of the New Act.

Once passed, the New Act will confirm the exempt status of certain financial institution players offering mortgages, welcome foreign players considering entry into the Ontario mortgage industry, and change the licensing regime for mortgage lenders, administrators, brokers and agents, and real estate brokers.

(b) Exemptions under Bill 65 for Financial Institutions and Simple Referrals

In the New Act, there continues to be an exemption from the licensing requirements for financial institutions, their directors, officers and employees acting on behalf of their financial institution employers. The definition of financial institution. includes banks, authorized foreign banks, loan and trust corporations, insurers, credit unions and retail associations.

In addition, Bill 65 specifically exempts simple referrals of prospective borrowers (or lenders) to prospective lenders (or borrowers) from brokerage/broker/agent licensing requirements. To rely on this exemption, the referrer may provide only prescribed information, must disclose any entitlement to a fee or remuneration, and comply with other prescribed requirements. The specific activities constituting a simple referral are left to regulations.

(c) What activities in Ontario will be regulated?

In general, broadly speaking, Bill 65 will regulate the following activities undertaken in Ontario: dealing in mortgages, trading in mortgages, carrying on business as a mortgage lender, and carrying on business as a mortgage administrator (the "Regulated Activities"). Like the Current Act, the New Act would apply to "mortgages"; i.e. any charge on any property for securing money or money's worth.

(d) The new "brokerage" model of regulation

The New Act provides that only persons and entities with appropriate licences (listed below) may carry on the Regulated Activities, use titles reflecting those licences, or commence an action or proceeding to be remunerated for dealing or trading in mortgages or administering mortgages in Ontario.

Bill 65 provides for the regulation of entities and individuals who carry on Regulated Activities under a new "brokerage" model for the sector. There are 4 types of licences in this model that cover the various types of Regulated Activities described above: a brokerage licence (authorizing brokering, trading or lending); a mortgage broker's licence; a mortgage agent's licence; and a mortgage administrator's licence.

Under this model, a licensed brokerage must ensure that every broker and agent working on its behalf complies with the New Act. Brokers and agents will be restricted to acting on behalf of one brokerage. Agents may deal or trade in mortgages only under the supervision of a mortgage broker.

A brokerage will be required to appoint a principal broker to perform prescribed duties and to act as a compliance officer. In addition, the current Act foreign ownership of brokerages has been eliminated.

(e) Licensing changes affecting registered mortgage brokers, mortgage agents and real estate brokers

The details of the licensing standards and conditions were not included in Bill 65. However, the Ministry of Finance's 2005 Mortgage Brokerages, Mortgage Lenders and Mortgage Administrators Act: A Consultation Draft (the "2005 Consultation Draft") gives a good indication as to the direction of these licensing requirements.

Licensed real estate brokers registered under the Real Estate and Business Brokers Act (Ontario) (which is also undergoing reform) are no longer deemed to be licensed under the New Act. There are some proposed exemptions and transitional measures in the 2005 Consultation Draft that allow certain individuals to qualify as mortgage brokers. Eligible individuals would be sole proprietors, partners, active officers or directors associated with a mortgage broker registered under the Current Act, and listed agents of registered mortgage brokers who have completed certain educational programs. Based on the 2005 Consultation Draft, they will have a time-limited opportunity of one year after the coming into force of the regulations to apply to be licensed as a mortgage broker without having to complete additional education and experience requirements.

(f) A few other related changes: administrative penalties, cost of borrowing, and education overhaul

In addition to the ability to freeze assets or trust funds (as is currently the case), under Bill 65, the Superintendent will be authorized to issue compliance orders, make applications to court to appoint a receiver or trustee and impose administrative penalties for failure to comply with the New Act. These administrative penalties may range from C$10,000 for failure to comply by a mortgage broker or agent to C$25,000 for a mortgage brokerage, mortgage administrator or any other person or entity.

The Ministry of Finance has released draft cost of borrowing regulations under the Current Act. It is anticipated that these regulations will be approved and brought into force by the end of March, together with the related amendments to the Current Act. Upon being proclaimed in force, they will apply to the Current Act, and will also be carried forward in the New Act.

The 2005 Consultation Draft indicates that a full review of educational requirements for licensed mortgage brokers and agents is underway, and that delivery channels will be one focus of the review. It is anticipated that some transitional licensing courses may not necessarily meet future course requirements arising out of the review.

Please contact a member of our Financial Services Group if you would like more information about Bill 65:


1 Links to Bill 65 and related documents

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.