A century ago, Ontario drafted legislation to protect unpaid
creditors from their debtors selling assets in bulk outside of the
ordinary course of business. Over the years, with the introduction
of other, more efficient creditor protection legislation, the
business community began to consider bulk sales legislation to be
an inefficient and outdated means of protection and it became more
of a source of frustration, creating additional cost and risk with
limited return. Every province (and 44 of 50 states) repealed its
bulk sales legislation, with Ontario being the last Canadian
holdout.
Now, in a long-awaited move, the province has repealed the
Bulk Sales Act, R.S.O. 1990, c. B.14 (the
"BSA"). Bill 27, the Burden Reduction Act,
received Royal Assent on March 22, 2017, and Schedule 3, Bulk
Sales Act Repeal, is now in force. The repeal of the BSA is
good news for anyone doing (or financing) asset deals in
Ontario.
