Bill 180,
Consumer Protection Statute Law Amendment Act, 2002
^{(Government Bill)}

37^th Legislature, 3 ^rd Session .

The Legislative Library


Current Status: (links are to Debates)

First Reading	Thursday, September 26, 2002
Second Reading	Monday, November 25, 2002
Committee	Finance & Econ. Affairs Thursday, December 05, 2002 (Reported to the House)
Third Reading	Tuesday, December 10, 2002
Royal Assent	Friday, December 13, 2002
Chapter	S.O. 2002, c.30

Links become live as soon as bills are posted on the Internet.

First reading version: (Explanatory Note)
View First Reading (PDF)
View First Reading (HTML): English / French

Second reading version:
View Second Reading (PDF)
View Second Reading (HTML): English / French

Third reading version:
View Third Reading (PDF)
View Third Reading (HTML): English / French

Sponsored by:
Hon.Tim Hudak (PC) Erie-Lincoln

Title:An Act to enact, amend or revise various Acts related to consumer protection / Loi édictant, modifiant ou révisant diverses lois portant sur la protection du consommateur.

Short Title:
Consumer Protection Statute Law Amendment Act, 2002/ Loi de 2002 modifiant des lois en ce qui concerne la protection du consommateur

Notes:
Schedule A enacts the Consumer Protection Act, 2002. Schedule B enacts the Motor Vehicle Dealers Act, 2002. Schedule C enacts the Real Estate and Business Brokers Act, 2002. Schedule D enacts the Travel Industry Act, 2002.

Acts Affected:
This act affects 10 or more other acts
Please click here for a full list of Acts Affected by this bill

Debates and Progress

First Reading

September 26, 2002
Minister's Statement and Mr. Duncan, Mr. Crozier, Mr. Christopherson

Second Reading

Debate
October 28, 2002
Mr. Hudak, Mr. Wettlaufer, Mr. Stewart, Mr. Crozier, Mr. Bisson, Mr. Klees, Mrs. Dombrowsky, Mr. Parsons, Mr. Prue, Mr. Levac

October 31, 2002
Mrs. Elliott, Mr. Bradley, Mr. Kormos, Mr. Dunlop, Mr. Prue, Mr. Agostino, Mr. Klees, Mr. Kwinter, Mr. Colle, Mr. McDonald, Ms. Churley, Mr. Bryant, Mr. Conway, Mr. Phillips, Mr. Stockwell, Mr. Kennedy

November 18, 2002
Mr. Kormos, Mr. Tascona, Mr. Bradley

Time Allocation
November 19, 2002
Mr. Hudak, Mr. Bradley, Mr. Christopherson, Mr. Tascona, Mr. Crozier, Mr. Marchese, Mrs. Munro, Mr. Cordiano, Mr. Geretsen

Carried on division.

November 21, 2002
Vote deferred until November 25, 2002

November 25, 2002
Carried on division and referred to the Standing Committee on Finance and Economic Affairs

Committee

Standing Committee on Finance and Economic Affairs

December 4, 2002

December 5, 2002
Reported as amended.
Ordered for third reading.

Third Reading

December 9, 2002
Vote deferred

December 10, 2002
Carried on division

Royal Assent: Friday, December 13, 2002

Coming into force:
See bill for details.
6. (1) Subject to subsections (2) and (3), this Act comes into force on the day it receives Royal Assent.

Same

(2) The Schedules to this Act come into force as provided in the commencement section at the end of each of the Schedules.

Same

(3) If a Schedule provides that any provisions are to come into force on a day to be named by proclamation of the Lieutenant Governor, a proclamation may apply to one or more of those provisions, and proclamations may be issued at different times with respect to any of those provisions.

Background information

When a session has ended this information is no longer updated and is provided only as part of the record of the bill's passage through the legislative process. some links will no longer be active.

Ministry of Consumer and Business Services

Ernie Eves government leads Ontario's first-ever Consumer Voice Summit
Press release, November 28, 2002
Ernie Eves government introduces bill to improve consumer protection
Press release, September 26, 2002
Ernie Eves government offers consumers warning about home repair scams
Press release, September 26, 2002
Related Backgrounders:
Consumer protection legislation for the new Ontario economy
Ontario’s proposed Motor Vehicle Dealers Act, 2002
Ontario’s proposed Real Estate and Business Brokers Act, 2002
Ontario’s proposed Travel Industry Act, 2002

A Consultation Draft of the Real Estate and Business Brokers Act, 2001
July 2001
A Guide to A Consultation Draft of the Real Estate and Business Brokers Act, 2001
July 2001

Consumer Beat
Links to background information about scams and other consumer protection issues.

Stakeholders

Canadian Consumer Information Gateway

Canadian Marketing Association
New Ontario Consumer Protection Act Strengthens Consumer Confidence in the Marketplace
Press release, September 26, 2002

Consumers’ Association of Canada

Consumers Council of Canada

Greater Toronto Home Builders' Association

Ontario Association of Credit Counselling Services

Ontario Home Builders Association

Ontario Real Estate Association
Ontario Realtors applaud new consumer legislation
Press release, September 26, 2002

Travel Industry Council of Ontario
Web Site
Information for Consumers

Jacob S. Ziegel, Professor of Law Emeritus, University of Toronto; Vaughan E. Black, Lewtas Professor of Commercial Law, Osgoode Hall Law School, York University; Anthony J. Duggan, Professor of Law, University of Toronto, Thomas G. W. Telfer, Associate Professor of Law, University of Western Ontario
The Consumer Protection Statute Law Amendment Act, 2002,
Submission on Bill 180 to the Ontario Legislative Assembly and to the Committee on Finance and Economic Affairs
November 2002

Explanatory Note

The Bill amends several statutes in relation to consumer protection. Here are some of the principal amendments:

SCHEDULE A
CONSUMER PROTECTION
ACT, 2002

The Schedule enacts the Consumer Protection Act, 2002. The new Act includes the substantive contents of what was the former Consumer Protection Act and also that of the Business Practices Act, the Consumer Protection Bureau Act, the Loan Brokers Act, 1994, the Motor Vehicle Repair Act, the Prepaid Services Act and parts of the Consumer Reporting Act.

The Schedule is divided into eleven Parts.

Part I: Interpretation and Application

The new Act, subject to limited exceptions, applies to all consumer transactions where the consumer or the person with whom the consumer is conducting the transaction is located in Ontario. There is an anti-avoidance provision that allows the substance of a transaction or entity to be examined to determine whether it is covered by the Act, permitting the form to be ignored. Consumer agreements that meet the criteria for more than one type of agreement covered by the Act must comply with the provisions applicable to all the types of agreement for which they meet the criteria, except as the provisions are exempted by regulation. Supplier disclosure under the new Act must be clear, comprehensible and prominent. If a supplier is required to deliver information to a consumer, it must be delivered in a form in which it can be retained by the consumer.

Part II: Consumer Rights and
Warranties

Nothing in the new Act is to be interpreted to limit any right or remedy of a consumer. Specifically, any provision that purports to require that disputes under a consumer agreement must be resolved by arbitration are not applicable to provisions in the new Act that give a consumer a right of action. Similarly, the consumer is given the right to commence or participate in a class proceeding arising from a consumer agreement, despite any provision in the agreement that purports to limit such a right.

Suppliers are deemed to warrant that services are of a reasonably acceptable quality. The implied conditions and warranties that apply to goods because of the Sale of Goods Act are made applicable to goods that are leased or traded and deemed or implied warranties or conditions cannot be negated. If a consumer receives an estimate, suppliers cannot charge consumers an amount that exceeds the estimate by more than 10 per cent. Ambiguities in any consumer agreement provided by the supplier and in required information are to be interpreted in favour of the consumer. A consumer cannot be charged to obtain a right or entitlement to which the consumer is entitled under the Act unless the entitlement is disclosed before the consumer agrees to pay the charge. Except as set out in limited circumstances, including on consent, a supplier cannot require payment for unsolicited goods or services.

Part III: Unfair Practices

Unfair practices include making a false, misleading or deceptive representation, making an unconscionable representation and renegotiating the price charged to a consumer in specified circumstances. Engaging in unfair practices is prohibited. A consumer agreement may be rescinded if it is entered into as the result of unfair practice and a consumer is entitled to any remedy available at law, including damages when an agreement is rescinded. Rescission of an agreement operates to cancel, as if they never existed, the agreement, related agreements, related guarantees and security and related credit agreements.

Part IV: Rights and Obligations Respecting Specific Consumer Agreements

Part IV covers several types of consumer agreements the regulation of which shares certain general characteristics. Future performance agreements, time share agreements, personal development services agreements, internet agreements and direct agreements are all regulated under this Part. In general, such agreements must meet a minimum total potential payment obligation to be regulated and must generally be provided in writing to the consumer. A consumer generally has a cooling-off period after delivery of the agreement to cancel and may generally cancel within one year after delivery of the agreement if the agreement did not meet the prescribed requirements.

Part V: Sectors Where Advanced Fee
Prohibited

In certain sectors, credit repair, loan brokering and the supply of other prescribed goods or services, advance fees are prohibited. Payments cannot be required or accepted until the obligations under the agreement have been performed. Such agreements may be cancelled within 10 days after a written copy of the agreement is delivered to the consumer or within one year if the agreement does not meet the prescribed requirements.

Part VI: Repairs to Motor Vehicles and
Other Goods

This Part regulates repairs to motor vehicles and other prescribed goods. Repairs cannot be undertaken unless the repairer provides the consumer with an estimate. However, a repairer may charge a consumer for work done without an estimate if the consumer declines the offer of an estimate and authorizes a maximum amount that he or she is willing to pay and the cost charged does not exceed that maximum amount. Repairers must tell consumers in advance if a fee is going to be charged for an estimate and cannot charge for an estimate where the work is authorized and carried out unless there has been unreasonable delay in obtaining the authorization.

If an authorization required under this Part is not given in writing, it must be recorded in accordance with the prescribed requirements. Repairers shall post the prescribed signs in accordance with the prescribed requirements. Invoices shall contain the prescribed information and shall be provided to consumers in the prescribed manner. Estimates or charges for work cannot be increased because cost is to be paid directly or indirectly by an insurance company.

There are requirements for returning parts when they are removed during repair and keeping such parts separate. Repairers are deemed to warrant parts and labour for a minimum of 90 days or 5,000 kilometres, whichever comes first, when a vehicle is repaired.

Part VII: Credit Agreements

Except as excluded, credit agreements in which a lender extends credit to a borrower (a consumer who is a party to a credit agreement) are regulated under this Part. Credit on the security of real property is excluded, as are supplier credit agreements if the borrower makes a single payment within a certain period and the borrower pays no interest during that period. Consumers are not liable to make payments on unsolicited credit cards until the card is used and the liability of a consumer for the unauthorized use of a credit card may be limited as prescribed. A borrower under a credit agreement is not liable to pay a lender the cost of borrowing if the lender has not disclosed the required information.

If a borrower is required to purchase insurance, he or she may purchase it from any insurer except that the lender can disapprove, on reasonable grounds, an insurer selected by the borrower. A borrower is permitted to terminate optional services supplied by a lender on 30 days notice. If a lender invites a borrower to defer making a payment, the invitation must disclose whether or not interest will accrue during the deferral period. Default charges are limited to reasonable charges in respect of legal costs incurred in attempting to collect payment, reasonable costs incurred on realizing on security and reasonable costs incurred because a cheque or other instrument has been dishonoured. A borrower is entitled to prepay the full outstanding balance under a credit agreement without penalty or charge.

There are a number of provisions regulating disclosure. Brokerage fees must be disclosed to borrowers as part of the required initial disclosure statement. Such statements must disclose the prescribed information. In addition, there are requirements for subsequent disclosure of changes in interest rates and insufficiency of scheduled payments to cover interest. Monthly statements of account are generally required in credit agreements for open credit.

Lenders' representations in respect of credit agreements must meet prescribed requirements.

When a negotiable instrument given to secure credit is assigned, the required statements and, if there is one, the consumer agreement must be delivered. An assignee has no greater rights and is subject to the same obligations as the person who assigned the credit.

Statements of the cost of borrowing shall be based on an adjusted amount if a consumer agreement allows for adjustment for an allowance for a trade-in. If there is an adjustment, the consumer agreement cannot be adjusted to change the percentage rate of the cost of borrowing, the total number of required instalments or the price.

Part VIII: Leasing

This Part covers consumer agreements for the lease of goods other than a lease in connection with a residential tenancy. It applies to leases of a fixed term of four months or more, leases for an indefinite period that are renewed automatically and residual obligation leases. Lessors are required to deliver disclosure statements before the earlier of the time the lessee enters into the lease and the time the lessee makes any payment in connection with it. The disclosure statement must contain the prescribed information. The maximum amount of compensation that may be charged to a lessee for early termination of a lease may be limited as prescribed. The maximum liability of a lessee at the end of a term of a residual obligation lease must be calculated in a prescribed manner.

Part IX: Procedures for Consumer
Remedies

This Part deals with the cancellation of consumer agreements other than those where the cancellation is being sought because of an unfair practice. The rules around the notice that a consumer must give to seek a remedy are set out including the form of notice, the date of effectiveness of notice and the address to which notice should be sent. If a consumer has a right to cancel an agreement, he or she can do so by giving notice. Cancellation of an agreement operates to cancel, as if they never existed, the consumer agreement, related agreements, related guarantees and security and related credit agreements. If a consumer agreement is cancelled, the supplier must refund payment and return goods delivered on a trade-in or refund an amount equal to the trade-in allowance.

Consumers may request that a credit issuer cancel or reverse a charge where the card was used to pay for a consumer agreement that was cancelled, to make a payment that was received in contravention of this Act or to make a payment that was collected in respect of unsolicited goods or services. A consumer may make such a request after the consumer has given notice of cancellation of the agreement or of a demand for a refund and the supplier has not refunded the payment within the required period. In these circumstances, the credit card issuer must acknowledge receipt of the request and cancel or reverse the charge or, after an investigation, send to the consumer a written notice explaining why the issuer is of the opinion that the consumer is not entitled to cancel the agreement or demand a refund.

If a consumer has a right to an action under this Act, the consumer may commence the action in the Superior Court of Justice. If successful in the action, the court must order that the consumer recover the full payment to which he or she is entitled under this Act and the goods delivered on a trade-in or an amount equal to a trade-in allowance. It may also order exemplary or punitive damages or other appropriate relief.

Part X: Powers and Duties of Minister
and Director

The Minister may disseminate information to educate and advise consumers, may provide information on alternative dispute resolution to consumers and may enforce this Act and other legislation for the protection of consumers. To enforce the Act and other legislation to protect consumers, the Minister may enter into agreements with law enforcement agencies and share and exchange information with them. The Director shall maintain a public record of undertakings of voluntary compliance, compliance orders, orders to cease false advertising and of other prescribed documents and information.

Part XI: General

A number of matters are dealt with under this Part. The Ministry may receive complaints and make inquiries. The Director may appoint investigators. With the assistance of a warrant, a search may be undertaken. In exigent circumstances, a search of premises other than premises that are a dwelling may be made without a warrant. The Director may order a person to cease making false, misleading or deceptive statements, which order takes effect immediately but is subject to a right of appeal. The Director may also make freeze orders if it is advisable for the protection of consumers and an investigation has been undertaken, a compliance order has been made or there has been an undertaking of voluntary compliance. The Director may propose to make a compliance order and, if it is in the public interest, may make an order for immediate compliance. Both are subject to appeal with a right to appeal to the Licence Appeal Tribunal. If the Director has made or is considering making an order against a person, the person may enter into an undertaking of voluntary compliance. If the person is not complying with the Act, the Director may apply to the Superior Court of Justice for a compliance order.

A person who fails to comply with an order, direction or other requirement under the Act is guilty of an offence. In addition, the failure to comply or contravention of the listed provisions is also an offence, as is an attempt to commit any of the listed offences. Officers and directors are guilty of an offence if they fail to take reasonable care to prevent a corporation from committing an offence. On conviction, individuals are liable to a $50,000 fine or imprisonment of up to two years less a day and corporations are liable to a fine of no more than $250,000. Restitution and compensation may also be ordered on conviction.

If the payment of a fine is in default for more than 60 days, the Director may disclose the name of the defaulter, the date of the default and the amount of the fine to a consumer reporting agency. If the fine is paid, the Director within 10 days after having notice of the payment shall notify the agency. The Director may also create a lien against the property of a person who has failed to pay a fine. Generally, matters that arise during the course of exercising powers or carrying out duties under the Act are to be kept confidential. This Part allows the Director to issue a certificate certifying as evidence of the facts stated in it. There are extensive regulation making powers.

SCHEDULE B
MOTOR VEHICLE DEALERS
ACT, 2002

The Bill revises and replaces the Motor Vehicle Dealers Act.

The Bill continues the offices of the registrar and director and permits them to be appointed by the board of directors of the administrative authority designated under the Safety and Consumer Statutes Administration Act, 1996 to administer this Act. If there is no administrative authority, the Minister of Consumer and Business Services appoints the director and the Deputy Minister appoints the registrar.

The Bill requires that motor vehicle dealers and salespersons trading in motor vehicles be registered and that salespersons should not trade in motor vehicles on behalf of a motor vehicle dealer unless they are registered to trade on behalf of that dealer. An individual who trades in a motor vehicle on their own account or for a member of their family is exempt from registration if the motor vehicle has been used primarily for personal use.

There are provisions in the Bill that permit the registrar to deal with complaints made about registrants. There are powers to inspect registrants and to appoint investigators. Investigators may conduct searches with the assistance of a warrant to investigate breaches of the statute. There may be a search of a premise, other than a premise used as a dwelling, without a warrant in exigent circumstances. In addition, a discipline committee and an appeal committee may be established. If these committees are established, registrants who have been found to have breached their code of ethics before a committee may be fined up to $25,000 or a lesser prescribed amount. The director may also freeze the assets of registrants and former registrants where it is advisable for the protection of the customers of the registrant or former registrant. The director may apply to the courts for the appointment of a receiver and manager to take the control of the business of a registrant in certain circumstances.

Motor vehicle dealers are required to ensure that the salespersons that they employ carry out their duties in compliance with the Act. Motor vehicle dealers are required to maintain a trust account.

Falsifying information, the furnishing of false information and false advertising are all prohibited. The registrar may make orders in respect of false advertising and may require that advertising be pre-approved before publication if an order in respect of false advertising has been made. The director may apply for a restraining order if a person is not complying with the Act.

The Bill contains an offence section. A person who contravenes the Act is guilty of an offence and, on conviction, is liable to a fine of up to $50,000 and up to two years imprisonment if the person is an individual and a fine of up to $250,000 if the person is a corporation. If there is a conviction, there may also be an order for restitution or compensation. If a fine is not paid, a lien may be registered against the person's property.

The Bill contains general provisions dealing with such matters as the preservation of secrecy, service of documents and the setting of fees by the Minister.

The Motor Vehicle Compensation Fund established under the Act is continued. The Fund is managed by a board of trustees and is supported by levies and payments imposed on registrants. The Fund shall be held in trust for the benefit of customers who are entitled to make a claim against it. The registrar may make arrangements with registrants for the payment of money owed to the Fund and the failure to make payments may result in the registrar refusing to renew the registrant's registration.

The Minister may make regulations establishing a code of ethics, governing the jurisdiction of committees and in areas prescribed by the Lieutenant Governor in Council. The Lieutenant Governor in Council may make regulations dealing with a broad range of matters to regulate the industry.

SCHEDULE C
REAL ESTATE AND BUSINESS
BROKERS ACT, 2002

The Bill revises and replaces the Real Estate and Business Brokers Act.

The Bill requires that persons trading in real estate be registered as brokerages, brokers or salespersons, subject to certain specified exemptions. The Bill creates the new category of "brokerage" for registration. A brokerage is a business that trades in real estate on behalf of others.

There are provisions in the Bill that permit the registrar to deal with complaints made about registrants and the powers to both inspect and investigate are continued from the Act, but are modified to require warrants in all investigations. There may be a search of a premise, other than a premise used as a dwelling, without a warrant in exigent circumstances. In addition, a discipline committee and an appeal committee are established and registrants who have been found to have breached their code of ethics before a committee may be fined up to $25,000 or a lesser prescribed amount. The director may also freeze the assets of registrants and former registrants if it is advisable for the protection of the clients of the registrant or former registrant.

Brokerages are required to ensure that the salespersons and brokers they employ carry out their duties in compliance with the statute.

Brokerages are required to maintain trust accounts and unclaimed funds are passed on to the administrative authority and in certain circumstances to the Minister of Finance. The rights of persons who may claim entitlement to such funds are maintained.

There are provisions that are intended to prevent conflicts of interest and unethical behaviour, including restrictions against employing unregistered persons, against salespersons or brokers acting for any brokerage other than the one that employs them and against inducing any party to certain real estate agreements to break the agreement for the purpose of entering another agreement. Providing false information and false advertising are also prohibited.

The Bill contains general provisions dealing with such matters as the preservation of secrecy, service of documents and the setting of fees by the Minister. The Minister may make regulations establishing a code of ethics, governing the jurisdiction of committees and in areas prescribed by the Lieutenant Governor in Council. The Lieutenant Governor in Council may make regulations dealing with a broad range of matters to regulate the industry.

SCHEDULE D
TRAVEL INDUSTRY ACT, 2002

The Bill revises and replaces the Travel Industry Act.

The Bill requires that a person who acts as or holds themself out as a travel agent or travel wholesaler be registered. In order to bring an action for commission or other remuneration for services in connection with the sale of travel services, the person must be registered or the action may be stayed. Registrations are not transferable.

There are provisions in the Bill that permit the registrar to deal with complaints made about registrants. There are powers to inspect registrants and to conduct investigations. Investigators are authorized to search premises, other than dwellings, with a warrant. There may be a search of a premise, other than a premise used as a dwelling, without a warrant in exigent circumstances. In addition, a discipline committee and an appeal committee may be established and registrants who have been found to have breached their code of ethics before a committee may be fined up to $25,000 or a lesser prescribed amount. The director may also freeze the assets of registrants and former registrants where it is advisable for the protection of the customers of the registrant or former registrant. The director may apply to the courts for the appointment of a receiver and manager to take the control of the business of a registrant in certain circumstances.

The Bill contains general provisions dealing with such matters as the preservation of secrecy, service of documents and the setting of fees by the Minister.

The Travel Industry Compensation Fund established under the Act is continued. The provisions relating to the administration and management of the Fund will be set out in the regulations.

SCHEDULE E
AMENDMENTS TO OTHER ACTS

The Schedule contains amendments that are related to the enactments of Schedules A, B, C and D.

The Schedule repeals the Business Practices Act, the Consumer Protection Act, the Consumer Protection Bureau Act, the Loan Brokers Act, 1994, the Motor Vehicle Dealers Act, the Motor Vehicle Repair Act, the Prepaid Services Act, the Real Estate and Business Brokers Act and the Travel Industry Act.

Amendments consequential to the enactments of the other Schedules are made to the Collection Agencies Act, the Consumer Reporting Act, the Discriminatory Business Practices Act, the Licence Appeal Tribunal Act, 1999, the Mortgage Brokers Act, the Registered Insurance Brokers Act, the Safety and Consumer Statutes Administration Act, 1996 and the Toronto Islands Residential Community Stewardship Act, 1993.

The Ministry of Consumer and Business Services Act is amended to permit the Minister to appoint investigators to investigate matters that relate to an Act that has been assigned to the Minister, to assign powers and duties to investigators and to permit the Minister to appoint experts to assist in the investigation. The Act is also amended to allow documents made under the Act and signed by the Minister or Deputy Minister to be receivable in evidence without having to prove the office or signature of the Minister or Deputy Minister.

Bill 180, Consumer Protection Statute Law Amendment Act, 2002 (Government Bill)

37th Legislature, 3 rd Session .