On November 16, 2015 certain amendments to the Ontario Personal Property Security Act contained in the Ontario government’s 2015 budget (tabled on April 23, 2015, as Bill 91, Building Ontario Up Act (Budget Measures), 2015) will come into force.
The amendments pertain to the length of the registration period applicable to PPSA financing statements and notices of security interest filed in relation to “consumer goods” collateral, which the PPSA defines as “goods that are used or acquired for use primarily for personal, family or household purposes.”
The amendments repeal subsections 51(5) and 51(6) of the PPSA. These sections previously deemed any financing statements pertaining to consumer goods collateral (as well as financing change statements extending registration periods) to have a maximum registration period of five years unless a shorter registration period was specified. The effect of these changes is that financing statements pertaining to consumer goods (as well as financing change statements) will no longer be subject to the maximum five year registration period and can be registered in perpetuity like financing statements for the other types of collateral classifications.
Similarly, subsection 54(2) of the PPSA is also being amended so that future notices of security interest (or extension notices) pertaining to consumer goods collateral filed in land registry offices will no longer be subject to a mandatory five year expiration date. Like PPSA financing statements, security interest notices (and extension notices) will now be able to set expiration dates as appropriate without having to file extension notices every five years. These changes will reduce the administrative burden on secured parties of having to file PPSA financing changes statements for renewals and extension notices every five years and will ensure that security registrations do not inadvertently lapse as a result of the old five year limitation.