Could this finally be farewell to the last remaining bulk sales
legislation in Canada? On June 8, 2016, Bill 218 entitled the
Burden Reduction Act, 2016 passed its first reading in the
Ontario Legislature. If passed into law, the bill will repeal the
99-year-old Bulk Sales Act, R.S.O. 1990, c.B.14 (the
"BSA").
Historical Background
Bulk sales legislation was first enacted in the 1890's in
the United States. Wholesalers who sold goods on credit to retail
merchants complained of a fraudulent practice that was apparently
becoming more and more prevalent: merchants selling their entire
stock of goods to third parties for cash and disappearing soon
thereafter, leaving creditors unpaid, with little to no recourse
after the dust had settled. As a result, creditors were searching
for a way to challenge such "bulk sales" that did not
require proof of a buyer's actual knowledge of the intention to
defraud a seller's creditors. The solution? Impose a positive
obligation on
