Canada: Repealing the Five Year Cap On Ontario PPSA Registrations For "Consumer Goods" Collateral: Good News For Lenders And Lessors

Last Updated: November 26 2015
Article by Jennifer Babe

Ontario Bill 91, An Act to implement Budget measures and to enact and amend various Acts, received Royal Assent on June 4, 2015. The official short title of the legislation is the Building Ontario Up Act (Budget Measures), 2015 (the "Budget Measures Act"). During the week of October 19, 2015, Ontario announced that Schedule 35 to the Budget Measures Act will be proclaimed into force on November 16, 2015.

Schedule 35 amends the Ontario Personal Property Security Act (the "PPSA") to repeal the five year cap imposed on registrations of financing statements and on notices of security interests filed against title to real property where the collateral is, or includes, consumer goods. "Consumer goods" are defined in the PPSA as goods used by the debtor for family or household purposes. Ontario is the only province in Canada with this provision.

Presently, the PPSA imposes a five year cap for registrations against consumer goods collateral, as follows:

Consumer goods

51(5) Despite subsection (1), if the collateral described in a financing statement is or includes consumer goods, the financing statement shall be deemed to have a registration period of five years, unless a shorter registration period is indicated on the financing statement or unless the registration period is extended by the registration of a financing change statement under subsection 52 (1).


51(6) Every financing change statement [renewal] extending the registration period of a financing statement described in subsection (5) shall be deemed to extend the registration period for a five year period that begins at the time of its registration unless a shorter extension is indicated on the financing change statement.

In addition, the PPSA also provides that where goods are affixed to real property, the secured party may register notice of its security interest in such goods against title to the subject lands. For example, the secured party might be financing the installation of new, built-in kitchen appliances, a hot tub, or similar other home improvements. These fixtures notice filing rules in the PPSA read as follows:

Notice in land registry office

54. (1) A notice of security interest, in the required form, may be registered in the proper land registry office, where,

  1. the collateral is or includes fixtures or goods that may become fixtures or crops, or minerals or hydrocarbons to be extracted, or timber to be cut; or
  2. the security interest is a security interest in a right to payment under a lease, mortgage or charge of real property to which this Act applies.

Consumer goods, registration period

54(2) Where the collateral is consumer goods, a notice registered under clause (1) (a) or an extension notice registered under subsection (3), as the case may be, shall set out an expiration date, which date shall not be later than the fifth anniversary of the date of registration and the notice or extension notice is effective until the end of the expiration date.


54(3) A registration to which subsection (2) applies may be extended before the end of the registration period by the registration of an extension notice.

Under the present PPSA rules with the five year registration cap, lenders or lessors with consumer goods transactions for a term of more than five years have to:

  1. make an initial registration of a financing statement and, if applicable, notice of security interest on title;
  2. mail the debtor the mandatory copy of that initial  PPSA registration; 
  3. diarize the renewal date for a future date so that any renewal in itself does not extend the registration life for more than five years;
  4. file the  PPSA renewal and, if applicable, notice on title renewal; and
  5. mail the debtor the mandatory copy of the renewal  PPSA registration.

All of this contributed to the overhead costs of the lender and lessor as they were required to create renewal diary systems, and have staff effect two sets of registrations and send two notices to the debtor.

Schedule 35 of the Budget Measures Act amends the PPSA to repeal the five year registration cap in both the financing statement registration and in the fixture filing on title for the goods. The relevant provisions read as follows:

  1. Subsections 51 (5) and (6) of the Personal Property Security Act are repealed.
  2. Subsection 54 (2) of the Act is repealed and the following substituted:

Consumer goods, registration period

(2) Where the collateral is consumer goods, a notice registered under clause (1) (a) or an extension notice registered under subsection (3), as the case may be, shall set out an expiration date, and the notice or extension notice is effective until the end of the expiration date.

As of November 16, 2015, the lender or lessor will select the desired registration length for the subject transaction, without any registration length limitation, thus allowing consumer goods and other classes of collateral to be treated uniformly in the service centre's operations.

Many clients register for the term of the deal plus an additional year.  This allows for: over-holding of leased goods; settlement of any excess wear and tear charges; and final payments to clear, without the PPSA registration lapsing and leaving the lender or lessor unsecured before these final deal matters are completed.

These amendments do not affect the existing Minister's Orders passed pursuant to the PPSA, which provide the mandatory content in a financing statement for consumer goods collateral, as follows:

section 3(1) 
(i) if the collateral is classified as consumer good, the principal amount; and
(j) if all the collateral is classified as consumer goods, the maturity date, or if there is no fixed date of maturity, an indication that there is no fixed maturity date.

As such, for consumer goods financing or leasing, the financing statement will still have to include an indication of the term of the transaction, and the notice of security on title must still disclose the expiry date. For Ontario's electronic land registration documents, the expiry date may be entered in "Statement 61" in the form for filing this notice on title.

Schedule 35 does not provide any transition rules for this change. The Budget Measures Act does not provide that this repeal is to be retroactive in effect. As such, the repeal will be effective as of November 16, 2015 and onwards, which is the day these provisions will be proclaimed into force. We may therefore anticipate that:

  1. if your registration for consumer goods is currently compliant with the five year cap, and the repeal goes into effect part way through the registration life of this registration, there is no impact. The lender or lessor will likely not do anything until its diary system for renewals triggers the notice to file the renewal. In short, the lender or lessor is unlikely to add to its overhead costs to track down those affected Ontario consumer goods  PPSA registrations. Rather, it will likely let its systems for tracking renewals continue as they are, and deal with renewals as they arise. This also avoids conducting renewals now, when a consumer may exercise his/her right to prepay under fixed credit agreements; and
  2. if your registration for consumer goods currently offends the five year cap (i.e. being filed for a registration term of more than five years) and the repeal goes into effect part way through the term, there is likely no impact for the lender or lessor. The five year cap was only a deeming rule in the legislation. Nothing in the Ontario  PPSA computer system tracked or altered a filing for consumer goods that was done for more than five years.

While in the second situation above, the lender or lessor was outside the PPSA five year cap rule, there is an argument that as of November 16, 2015, the registration error ceases to be applicable for any disputes arising after that date.

In Ally v Allesandro, 2011 ONSC 6721, the Court held, based on prior case law, that priority issues under the PPSA are to be resolved as of the time when the respective interests came into conflict, or on the date a secured party repossessed the goods. In 2010, the Ontario purchase-money security interest ("PMSI") rule on perfection within 10 days of the debtor obtaining possession of the goods was amended to provide for 15 days. In this case, Ally had registered on the 11th day when the PMSI rule was 10 days, but repossessed the goods in January 2011 when the PPSA rule provided 15 days for registration of a PMSI interest. The Court applied the 15 day rule in effect on the date of Ally's repossession.

In short, the repeal of the five year cap is indeed good news for lessors and lenders of consumer goods in Ontario, as it will allow for simpler portfolio administration, and put an end to an added overhead cost.

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.

Jennifer Babe
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.