The Ontario government has finally heeded the call of the
franchise law community and, on June 16, 2016, announced that
Ontario will permit electronic delivery of a franchise disclosure
document (FDD). The new Regulation permitting electronic delivery
takes effect on July 1, 2016.
This is obviously good news for those offering franchises in
Ontario. It ends the uncertainty as to whether electronic
disclosure was or is permitted, as at least one case in Ontario had
noted that a FDD was deficient for having been delivered by
The new Regulation will now bring Ontario's FDD delivery
practices in line with three of the other regulated provinces that
explicitly permit electronic delivery, namely Manitoba, New
Brunswick and Prince Edward Island. It leaves Alberta as the sole
province with a franchise law that does not explicitly permit
electronic delivery. As well, the province of British Columbia has
a pending franchise law that, once in force (likely in early 2017),
will permit electronic delivery.
A particularly important feature of the Regulation that
permits electronic delivery of the FDD is the explicit requirement
that the franchisor receives a written acknowledgement of receipt
from the prospective franchisee. While requiring a receipt
has always been a recommended practice whenever an FDD is provided,
there was never any actual legal requirement in the Ontario
franchise law for a franchisor to insist on a getting a written
receipt from a prospective franchisee where a copy of the FDD had
been delivered in hard copy form. So, where electronic delivery is
made, a written receipt is now a legal requirement.
Other parts of this new Regulation also make it clear that a FDD
and a Notice of Rescission under the law can be delivered by
courier. It has always already been a common practice to have a FDD
delivered by courier. But now it is expressly permitted.
With the changes, there are four permitted methods of delivery
of a FDD in Ontario, namely:
1. hand delivery;
2. registered mail;
3. courier; and
4. electronic delivery.
As noted, while a written acknowledgement of receipt is
now a condition of effective delivery by electronic means, it is
recommended in all cases.
Due to the slight differences in the requirements relating to
electronic disclosure across the regulated provinces, it can be
perhaps be confusing and inefficient to modify a franchisor's
approach to disclosure from province to province. Accordingly, we
can synthesize the regulations relating to electronic disclosure
into a single set of rules that can be followed in each of the four
provinces that permit electronic delivery (in Ontario, effective
July 1, 2016).
The synthesized requirements are:
The FDD must be in a form that enables the recipient to
retrieve, view, store, print, and process the FDD.
The FDD must be a single, integrated document or file (although
Manitoba, New Brunswick and Ontario provide that if the FDD
consists of separate files, then an index must be included which
sets out the file name or a description of the subject matter of
The FDD must contain no external links to or from extraneous
content or documents.
A written receipt must be obtained from the franchisee.
The franchisor must keep records of the electronic
As the exact wording of the Regulation is relatively short, it
is set out in full below, and is as follows:
Delivery of documents
12. (1) For the purposes of subsection 5 (2) of the Act, a
franchisor may deliver a disclosure document to a prospective
franchisee by electronic transmission if,
(a) the document is delivered in a form that enables the recipient
to view, store, retrieve and print it;
(b) the document contains no links to external documents or
(c) the document contains an index for each separate electronic
file, if any, of which the document consists, where each index sets
(i) the file name, and
(ii) if the file name is not sufficiently descriptive of the
subject matter dealt with in the file, a statement of that subject
(d) the franchisor receives a written acknowledgment of receipt
from the prospective franchisee.
(2) A franchisor may deliver a disclosure document to a prospective
franchisee by courier if the franchisor pays the costs of the
13. (1) For the purposes of subsection
6 (3) of the Act, a franchisee may deliver a notice of rescission
by prepaid courier to the franchisor's address for service in
the franchise agreement.
(2) A notice of rescission delivered in accordance with subsection
(1) shall be deemed to be delivered to the franchisor on the second
day after the day of delivery by courier.
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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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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