No Immediate Solution To PPSA Collateral Classification Problem

Originally published in Blakes Bulletin on Financial Services, December, 2007

As many of you know, on August 1, 2007, the Ontario government accidentally repealed section 46(3) of the Ontario Personal Property Security Act (the PPSA). There had been some hope that the Ontario government would move quickly to correct this error; however, the latest word we have received is that this is unlikely. Our understanding is that the error will only be fixed as part of some omnibus red tape reduction or good government bill passed at some convenient point in the future. Even more troubling, it is still very much uncertain whether the correction will be made retroactive. Therefore, we will all have to live with the consequences of the repeal of section 46(3) for the foreseeable future.