Less than a year from the 100th anniversary of its enactment,
Ontario's Bulk Sales Act (the "BSA") seems
set for repeal. On June 8, 2016 Bill 218, the Burden Reduction
Act, 2016 received first reading. Section 1 of Schedule 3
simply says "The Bulk Sales Act is repealed." Ontario has
been a laggard in taking this step. All of the other common law
provinces have previously repealed their BSA legislation.
It was originally intended to protect creditors from business
owners selling their assets and disposing of the proceeds without
paying their creditors. In more recent times it has come to be
viewed as out dated legislation which interferes with M&A
transactions, both big and small, structured as asset sales by
creating delays and increasing the costs of such transactions. It
hasn't been substantially amended since 1959.
