Saskatchewan is in the process of updating its consumer
protection legislation with respect to the sale and leasing of
motor vehicles. On August 20, 2015, the Consumer Protection and
Business Practices Amendment Regulations (RRS c.C-30 Reg 1) (the
“Regulations”) were filed with the
Register of Regulations in Saskatchewan; however, the Regulations
are not yet in force. The Regulations appear to address the
concerns that motor vehicle financiers raised with the proposed
Regulation Amendments (as discussed below) and as a result of the
changes reflected in the Regulations motor vehicle financiers will
likely not require to be licensed in Saskatchewan as it was
By way of background, in August 2014 amendments were proposed to
the regulations (the “Proposed Regulation
Amendments”) under the Saskatchewan Consumer
Protection and Business Practices Act. The Proposed Regulation
Amendments were of concern to motor vehicle financiers as they
necessitated a dealer license for any person carrying on the
business of a “dealership”, which was broadly defined
to include a business that: (i) sells or leases vehicles or offers
vehicles for sale or lease; (ii) solicits orders for the future
delivery of vehicles; and (iii) takes vehicles on consignment. The
definition even included a business that merely advertises the
selling, leasing or consignment of an interest in a vehicle.
Neither the proposed definition of “dealer” nor
“dealership” limited the interactions captured in such
dealings with a consumer. Furthermore, it was unclear under the
Proposed Regulation Amendments if the licensing regime applied on
sales to “dealers” themselves.
Another area of concern regarding the Proposed Regulation
Amendments was the definition of “vehicle” as it went
beyond the scope of a vehicle used for personal, family or
household purposes. Vehicle was defined to include any device in
which a person or thing may be transported on a highway.
The Regulations offer a number of exemptions from the
application of the licensing regime set out under the Regulations,
including exemptions for: (i) a person who trades in vehicles
solely for the purpose of providing or facilitating financing for
the purchase or lease of a vehicle; (ii) a person whose dealings
with vehicles are incidental to the person’s ordinary
business of lending money or dealing with financial contracts or
instructions; (iii) a secured creditor enforcing a security
interest; and (iv) a lease of a vehicle for a term of less than 120
days. In this respect, it appears that most motor vehicle
financiers can find relief from the licensing requirements of the
Regulations and will not need to be licensed in Saskatchewan,
provided that they are not otherwise a “dealer” of
motor vehicles. In addition, the Regulations specifically exempt
from the licensing requirements sales to a person – other
than a broker – who only sells vehicles to dealers, which
addresses the uncertainty that was raised previously by the
Proposed Regulation Amendments.
While the exemptions in the Regulations are robust and carve out
a number of commercial exceptions, including the foregoing, the
definition of “vehicle” remains unchanged and thus it
is still possible that a commercial activity without an enumerated
exception may require licensing in accordance with the
Motor vehicle financiers will welcome the Regulations, as the
proposed amendments will provide more certainty when dealing with
motor vehicles in Saskatchewan.
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 Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The recent decision of the Ontario Court of Appeal in BMW Financial Services Canada, a Division of BMW Canada Inc. v. McLean provides some useful insight into the relationship between automobile dealers and the financing arms of the manufacturers for whom those dealers are franchisees.
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).