Canada: Modernizing Ontario's Business Law: Expert Panel Releases Its "Wish List"

On February 15, 2015, Ontario's Minister of Government and Consumer Services asked a 13‑member panel of legal practitioners and academics to survey the province's business law landscape and provide recommendations on reforming laws to modernize the province's business environment. In June, 2015, the panel submitted a comprehensive report with 16 recommendations for legislative reform that would promote the following key objectives:

  • Making Ontario a leading jurisdiction for business;
  • Updating legislation dealing with commercial activity, including the PPSA; and
  • Creating an environment with more certainty and efficiency to support market activity and small business growth.

These objectives would be achieved by amending, and in some cases even repealing, a number of significant pieces of Ontario legislation, as detailed below. It is important to bear in mind that these are simply proposals, but the fact that such a broad range of reforms to Ontario business law is under serious discussion is a significant development in its own right.

Making Ontario a leading jurisdiction for business

OBCA changes

In the case of the Business Corporations Act (OBCA), the panel recommended removing barriers on board composition by eliminating Canadian residency requirements which currently mandate at least 25% Canadian resident representation on corporate boards, a provision that is routinely avoided by incorporating in a Canadian jurisdiction that does not impose it. In a further attempt to streamline and modernize the operation of boards of directors, the panel suggested changing the cumbersome rules regarding electronic communications so as to allow meetings to be held electronically or via conference call without the notices and consents currently required from the parties involved.

The panel also recommended that shareholders be given the ability to vote against candidates in a board election in order to more effectively control their board's composition. It also recommended the statutory recognition of beneficial shareholders which would (for example) allow those who hold shares through an electronic based book-entry system to be entitled to the rights and remedies under the OBCA as registered shareholders.

In light of a similar review process underway with respect to the Canada Business Corporations Act (CBCA), another item that could perhaps be added to the "wish list" would be that the Ontario and federal jurisdictions adopt a consistent approach with respect to company law issues such as the rights of beneficial shareholders.

Limited Partnerships

With regard to partnerships and the Limited Partnerships Act, the panel made proposals aimed at encouraging the formation of more LPs in Ontario. In particular, the committee mentioned the possibility of reducing the potential for limited partner liability, noting that many LPs are formed under corresponding Manitoba legislation that permits limited partners to take a more active role in the business.

ULCs, LLPs and LLCs

The panel proposes a number of changes designed to make the use of a variety of business forms easier. For example, ULCs (unlimited liability corporations) would be permitted in Ontario – as they are currently in Alberta, B.C., and Nova Scotia – and eligibility for LLP (limited liability partnership) status would be extended beyond the legal and accounting professions. The panel also considered the adoption of U.S.-style LLCs (limited liability corporations) but was of the view that the expanded LLP would serve much the same purpose.

Updating legislation dealing with commercial activity, including the PPSA

Eliminating some quirks of Ontario's PPSA

With respect to the Personal Property Security Act (PPSA), the panel emphasised amendments to permit cash as collateral to be perfected by control as opposed to registration, and supported a provision to make cash have priority over competing security interests. Other recommendations included proclaiming into force "location of debtor" provisions which provide for a debtor's location to be that of its registered office; repealing the provision mandating that a debtor receive copies of all registrations; defining "intangible" in the PPSA to clearly include licences, IP licences and quotas, as is currently the case in British Columbia and Saskatchewan, and waiving the requirement for chattel paper financiers to physically possess chattel paper (a requirement that has inhibited the development of electronic chattel paper in Ontario).

Repealing the Bulk Sales Act

Ontario is last Canadian jurisdiction to retain bulk sales legislation. Intended to protect unpaid trade creditors against a vendor's bulk sale of all or substantially all of its assets, the Bulk Sales Act's remedies have largely been superseded by those available in other statutes. Because the Act can apply, in theory, to a broad range of business transactions, it often requires parties to obtain legal advice, exemption orders and indemnities. The panel recommended that Ontario join other Canadian jurisdictions in repealing the Act.

Repealing duplicative preference and fraudulent conveyance legislation

The panel proposed the repeal of both the Assignment and Preferences Act and the Fraudulent Conveyances Act, legislation that is largely superseded by federal bankruptcy legislation and which achieves very little other than to add costs to business transactions. The committee recommended the substitution of the Uniform Law Conference of Canada's  model act, the "Reviewable Transactions Act" for the two statutes.

Creating and environment with more certainty and efficiency to support market activity and small business growth

Making franchise law compliance simpler

Franchising is an important engine of business growth. Ontario's Arthur Wishart Act (Franchise Disclosure) is one of several pieces of provincial legislation in Canada that govern the franchisor-franchisee relationship. While the legislature's intention to provide substantial protections to franchisee's was warranted, the Arthur Wishart Act has created a number of difficult and costly compliance issues, particularly in comparison with franchise legislation in other provinces. For example, 14 days before a franchisee signs a franchise agreement or pays consideration relating to the agreement, the franchisor must disclose "all material facts" to the franchisee, though uncertainty surrounds what "all material facts" entails, as it remains undefined in the Act. As a result, the panel called for an update to Arthur Wishart Act, with a view to bringing about greater disclosure certainty (and lower legal costs) for both franchisees and franchisors.

Simplifying business registration requirements

Particular emphasis in this section of the report was placed on simplifying business information and business registration legislation, particularly with respect to duplication and inconsistency. For example, obstacles exist for many international organizations (e.g. LLCs) whose structures and/or designations differ from those recognized under Ontario legislation.. Legal advice must often be sought in both cases to ensure compliance with Ontario's regulations. As a result, the panel suggested modernizing Ontario legislation to allow for simpler and more predictable designations of common types of foreign corporate entities. The committee also recommended a reduction in the amount of information collected from companies to what is truly necessary from a policy perspective, as well as improved co-operation with other provinces with respect to reducing the needless duplication of corporate filings.


The recommendations proposed by the panel would modernize Ontario business law and align it with neighbouring jurisdictions in a manner that would help to reduce transaction costs. The Ministry of Government and Consumer Services states that it will create a reform agenda based on these recommendations, though there is no timeline for completion. If you so desire, you can e-mail comments and ideas on the report to The Ministry of Government and Consumer Services at with "Business Law Agenda Report" in the subject line. The Ministry is accepting submissions until October 16, 2015.

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.