Ontario's Bulk Sales Act Has Been Repealed

On March 22, 2017, Ontario's Bulk Sales Act (BSA) was repealed, bringing to an end bulk sales legislation in Canada.¹ The BSA was enacted in 1917, and was intended to protect unpaid trade creditors (i.e. the people a seller is indebted to for goods, money or services furnished for the purpose of enabling the seller to carry on his or her business) from "bulk sales" by a seller of all or substantially all of its assets over a short period of time.

The BSA was an important consideration for both the buyer and the seller in an Ontario M&A transaction that was structured as an asset deal as the consequences of not complying with the BSA could be significant, including that a non-compliant transaction could be set aside by a court upon the application of a trade creditor of the seller. Prior to its repeal, the parties to an asset transaction would deal with the BSA by following the procedure for compliance with the BSA, getting a court order or, most commonly, waiving