Pursuant to Bill 218, Burden Reduction Act, 2016, which
passed its first reading in June 2016, the Personal Property
Security Act (Ontario)1 (PPSA (Ontario)) will be
amended so that a debtor will be able to waive its right to receive
a copy of the verification statement.
Currently, the PPSA (Ontario) states:
Section 46(6) Copy to debtor - Within 30 days
after the date of registration of a financing statement or
financing change statement, the secured party shall deliver a copy
of a verification statement to the debtor.
Failure to comply with this requirement is punishable by a fine
of $500 payable by the secured party to the debtor.
The proposed amendments provide that:
Unless waived in writing by the debtor, a secured party must
still provide the debtor with a copy of the verification statement
within 30 days after the date of registration of a financing
statement or financing change statement; and
The ability to waive the right to receive a verification
statement will apply proactively on or after the day that these
amendments come into force.
In speaking to representatives at the Ministry of Economic
Development and Growth, they were unable to confirm when this
amendment is expected to come into force. Given the recent
prorogation of the legislature and the Ontario government's
plans to reintroduce the Burden Reduction Act, we do not expect
these changes to be implemented before Q1 2017.
These proposed changes will bring Ontario in line with all other
Canadian provinces, except Quebec. In practice, security agreements
in other provinces (other than Quebec) will typically include a
waiver of the requirement to provide a copy of a verification
statement. We expect to see Ontario law-governed security
agreements begin to follow the same practice.
Since most older forms of Ontario security agreements do not
include a waiver provision, once this proposed amendment comes into
force, secured parties should ensure that their form of security
agreements is amended to provide for this waiver.
The author of this article gratefully acknowledges
the contributions of articling student, Samuel
1. R.S.O. 1990, Chapter P.10
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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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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