July 27, 2015
Jennifer Brown, Canadian Lawyer InHouse
In an effort to make Ontario a more competitive business jurisdiction, a panel of legal experts has made recommendations to review outdated business legislation in the province.
On July 9, the province released a report prepared by a panel of in-house, law firm lawyers, and law professors appointed by the minister of government and consumer services to consider reform of Ontario’s corporate and commercial legislation.
The report makes recommendations in five areas:
- Establishing a process to keep corporate and commercial law current.
- Making Ontario a jurisdiction of choice for business.
- Supporting greater market certainty and confidence in market transactions.
- Modernizing laws relating to secured lending and other commercial activity.
- Facilitating market activity and promoting small-business growth through greater certainty, clarity, and efficiency in business legislation.
The report also recommends updating the Arthur Wishart Act that deals with franchise disclosure to create more disclosure certainty for users. The act hasn’t been updated since it came into force 15 years ago.
The panel heard from a number of business law experts who provided input, including Andraya Frith, chairwoman of Osler Hoskin & Harcourt LLP’s national franchise and distribution practice group, who says there needs to be greater certainty in the Arthur Wishart Act.
Frith says it’s becoming increasingly challenging to comply with the franchise legislation in Ontario and have confidence a franchise disclosure document is compliant. That’s because of trends in case law and the way the language in the act has been interpreted, particularly around what she calls the “open-ended concept of all other material facts” needing to be disclosed.
“Where the courts are saying the franchisees need site-specific information about their particular franchise, there is some compounding effect of the need to have a highly customized disclosure document that increases the cost significantly for any franchisor for each site and each candidate,” she says. “There’s also no guidance in the legislation as to what that information ought to include.”
The minister of government and consumer services is seeking public input on the report until Oct. 16, 2015.
Read the full article.