Saskatchewan is in the process of updating its consumer protection legislation with respect to the sale and leasing of motor vehicles. The current draft legislation, Bill No. 55 The Consumer Protection and Business Practices Act (the "Proposed Act"), which will amend and repeal current consumer legislation in Saskatchewan, has been circulated for comment. The Canadian Finance and Leasing Association ("CFLA") was asked to comment on the regulations and the CFLA provided a detailed letter setting out its concerns.

Below is a list of concerns we think will be most problematic for motor vehicle financiers in Saskatchewan.

1. The regulations contemplated in connection with the Proposed Act would necessitate a dealer license for any person carrying on a business of a dealership. "Dealership" is defined broadly to include a business that sells or leases vehicles or offers vehicles for sale or lease, solicits orders for the future delivery of vehicles, takes vehicles on consignment, and even includes a business that merely advertises the selling, leasing or consignment of an interest in a vehicle. Neither the definition of "dealer" nor "dealership" limits the interactions captured to those dealings with a consumer.

2. The definition of "vehicle" is also problematic as it includes any device in which a person or thing may be transported on a highway, this definition goes beyond those vehicles meant for household or family uses, which consumer protection legislation is typically meant to regulate.

The critical result of the two concerns above could mean that any company which participates in any of the aforementioned activities for commercial purposes will be caught by the definition of "dealer" and therefore require a license under the Proposed Act.

3. While the draft legislation exempts "a person, other than a wholesaler, that sells vehicles to dealers" from the license requirements under the Proposed Act, it is unclear how far this exemption will extend in practice. Presumably, this is meant to protect lenders who sell motor vehicle collateral in an insolvency or bankruptcy situation, however it is unclear if these sales to dealers would be caught. Asset purchase agreements between two commercial parties which transfer an interest in one or more vehicles is another type of transaction which the legislation might inadvertently require a dealer license be obtained.

We will be monitoring Bill 55's development. We hope the current consultation period brings these concerns to light and either the definition of dealer and dealership is narrowed or the exemption is broadened so as to exclude commercial transactions from the reach of what is meant to be consumer protection oriented legislation.

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