Canada: A Guide To Disclosure Requirements Under The Ontario Consumer Protection Act

A Guide to Disclosure Requirements under the Ontario Consumer Protection Act

The Ontario Consumer Protection Act, SO 2002, c 30, Sched A (the "CPA") specifies the financial disclosure obligations imposed on lenders in order to provide consumers with clear, transparent information about the details of their often complex credit agreement. While the CPA's regulations are extensive, there is comparatively little guidance or case law interpreting these provisions or providing a comprehensive set of parameters within which a lender may achieve compliance. This article is therefore intended to provide a detailed review of these disclosure obligations as well as an overview of the consequences of non-compliance.

It should be noted at the outset that the CPA applies only to transactions involving a "consumer," which is defined as an individual acting for personal, family or household purposes. This does not include a person who is acting for business purposes. Accordingly, where a lender provides services to a corporation, or an individual purchaser is acting solely in a professional or business capacity at the time the transaction is entered into, the CPA will not apply. As well, for the CPA to apply either the consumer, or the person engaging in the transaction with the consumer, must be located in Ontario when the transaction takes place.

There are two main types of credit agreements that are subject to different, yet largely overlapping, disclosure requirements: open credit agreements and fixed credit agreements. An open credit agreement allows the borrower to determine how much he or she will borrow, subject to a prescribed limit. In contrast, a fixed credit agreement is a loan for a fixed amount, usually made as a one-time advance, and where the borrower is unable to make multiple draws at will.

Both fixed credit and open credit agreements are subject to three main types of disclosure: initial disclosure, subsequent disclosure and supplementary disclosure. Primary initial disclosure must be delivered to the borrower at or before the time that the borrower enters into the agreement, which allows the borrower to make an informed decision. Lenders may make disclosure in separate documents or parts, and they may also base disclosure in estimate or assumption where the information is not ascertainable at the time the disclosure is made. Regardless of the type of credit agreement, the CPA expressly requires that any disclosure to the consumer be "clear, comprehensible and prominent." All disclosure mandated by the CPA must be delivered in writing, and in a form that can be retained by the consumer. In addition, where the agreement has fine print or any term that is difficult to comprehend, it will be construed in favour of the consumer.

Fixed Credit Disclosure:

The initial disclosure statement for fixed credit agreements must be provided directly from lender to borrower. It must contain information on the initial amount of loan or credit being advanced to the borrower, distinct from interest or other charges; the nature, timing and amount of any subsequent advances to the borrower; the length of the credit agreement term; the charges due in the event of borrower defaults under the credit agreement; and what constitutes an event of default. The initial disclosure statement must also contain information on the cost of borrowing, including the additional money that the borrower will have to pay over and above the principal of the transaction as a condition of entering into the agreement (e.g. payment processing fees, PPSA search and registration costs, security expenses, costs of insurance and other fees).

With respect to interest, the CPA requires a lender to disclose the interest rate fixed through the term of the credit agreement. Where the interest rate is variable, the initial rate and the manner of determining the annual interest rate at any time during the term of the credit agreement must be identified. Where applicable, a lender must also disclose to the borrower when their payments are inadequate to cover accruing interest charges alone. This is required so that the principal of the debt would not be increasing, despite the consumer's belief that regular payments are paying it down. Other required details related to interest include the date when interest starts to operate, increasing the debt owing; the circumstances under which interest is compounded under the credit agreement; a detailed description of any period during which certain charges otherwise payable under the credit agreement are forgiven; and the annual percentage rate, which must be stated clearly in order to be enforced.

Even after initial disclosure has been made, the CPA requires that lenders provide additional, periodic disclosure where there has been a change in circumstances (subsequent disclosure), or a change to the agreement (supplementary disclosure). If at any time the parties amend a credit agreement for fixed credit such that it alters any of the information required under the initial disclosure statement, then the lender shall be required to deliver a supplementary disclosure statement in writing, within 30 days after the amendment or change in circumstances.

Open Credit Disclosure:

Open credit is an agreement where the amount of the credit or loan advanced is at the will of the borrower, subject to a credit limit. In an open credit agreement, the amount being borrowed may change multiple times throughout its term and consequently, the CPA imposes more stringent disclosure requirements to ensure transparency for the benefit of the borrower. Perhaps the most significant distinction between open and fixed credit agreement, is the requirement that a lender in an open credit agreement provide the borrower with monthly statements of account.  The disclosure required in these monthly statements will be reviewed in detail below.

The initial disclosure statement for an open credit agreement must be provided directly from lender to borrower, in writing, and must contain the maximum amount of loan or credit available to the borrower; the annual interest rate fixed through the term of the credit agreement; the date that interest starts to operate; the amount of any non-interest costs of borrowing; the period for which a statement of account will be delivered to the borrower; the minimum payment due with each statement of account; charges due in the event of borrower default; and a toll-free telephone number at which the borrower can make inquiries about the borrower's account during ordinary business hours.

The CPA also requires a lender in an open credit agreement to deliver regular statements of account to the borrower at least once per month.  That said, no statement is required at the end of any period where there has been no activity (ex. no advances and payments) since the last statement and either the outstanding balance payable is zero, or the borrower is in default and has been notified of such.

Every statement of account must be delivered to the borrower, in writing, and must disclose the period covered by the statement of account; the outstanding balances at the beginning and end of the period covered by the statement of account; the posting date, amount and description of each consumer transaction charged to the account during the period, and the total amount charged during the period; the posting date and amount of each payment made or credit granted to the account during the period, and the total amount so credited during the period; the annual interest rate in effect during the period covered by the statement of account; the total amount of interest charged to the borrower; the credit limit; the minimum payment due by the borrower, and its due date; the rights and obligations of the borrower with respect to the correction of billing errors; and a toll-free contact telephone number at which the borrower can make inquiries about their account during ordinary business hours.

If the parties amend a credit agreement for open credit such that it alters any of the information required under the initial disclosure statement, then the lender must deliver to the borrower a written disclosure statement setting out the changes within 30 days of the amendment. This is particularly important where the lender purports to change the interest rate of a credit agreement for open credit. In such circumstances, the lender must deliver written notice of the change in rate at least 30 days before any change takes place, unless the rate of interest is decreasing in which case disclosure may be made in the next statement of account. Again, the intention is always to provide the borrower with clear and advance notice of any increase or decrease in interest rates, so that they are kept apprised of the amount owing.

While these requirements are extensive, it is incumbent upon lenders to be cognizant of all disclosure obligations pursuant to the CPA. A lender's failure to comply with its disclosure obligations may result in serious consequences. Consumers are given a wide range of remedies and options beyond the entitlement to rescission of a consumer agreement, which may be triggered by contacting the lender directly to advise of a breach, initiating a court action or launching a complaint with the Ministry of Government and Consumer and Services. Considering the broad remedies available to consumers and the sanctions which may be levied for non-compliance, lenders are encouraged to make all reasonable efforts to comply with the disclosure obligations under the CPA to the greatest extent possible.

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
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.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


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.