Initially passed in the Ontario Legislature back in 2002, Ontario's new Funeral, Burial and Cremation Services Act ("FBCSA") was finally declared in force on July 1, 2012. Despite the almost complete lack of fanfare, the new Act actually implements changes which will fundamentally alter the structure of the bereavement sector in the Province.
Elimination of Restriction on Co-location and Co-ownership
One of the most fundamental changes was the elimination of customary restrictions on co-location co-ownership. The old Cemeteries Act specified that "[n]o owner shall carry on business...in conjunction with a person licensed to operate a funeral establishment or transfer service." Furthermore, the repealed regulations forbade a cemetery or crematorium from being in such proximity to a funeral establishment or transfer service that it could even appear that the businesses were being operated in connection with each other.(2) The FBCSA contains no such restriction. The "visitation centres" located in some Toronto cemeteries over the past decade or so, may now be called "funeral homes". Funeral directors who previously operated cemeteries through indirect mechanisms, may now do so directly.
Existing businesses that wish to diversify the services on offer to clients by establishing a cemetery, crematorium, funeral establishment or transfer services, must obtain the required license and submit confirmation of approval by the local municipality.(3) There are additional requirements that vary depending on the license being sought.
Restriction on Crematoria Location Removed
Under Ontario's old Cemeteries Act, crematoria were only permitted on designated cemetery lands. This restriction has been lifted under the new FBCSA regime. Now, although numerous licensing conditions and operating restrictions continue to apply, the law in Ontario allows crematoriums to be located off of cemetery lands.
This creates new and interesting opportunities for funeral home operators and other service providers seeking to provide all-inclusive services to families which were previously restricted. In particular, providers of no-smoke-stack cremation technologies which can be located in any funeral home, and service providers wishing to provide more integrated services for busy urban families will now find Ontario a very friendly place to do business.
In order to secure a license to operate a crematorium in Ontario, applicants will need to submit an application, a confirmation of approval by the local municipality, a copy of the Director's certificate of approval as required under section 9 of the Environmental Protection Act, and plans or drawing of the site, building, location of retorts, processing area, and body storage areas to the Ministry.(4)
Consumer Protection Enhancements
The protection of the vulnerable remains the primary driver of regulation of the bereavement sector. While the FBCSA provides opportunities for business expansion, the adjustments are coupled with increased consumer protections.
For example, customers are now entitled to sell unused and unwanted internment and scattering rights to a third party for an amount that is less than or equal to the price of the rights indicated on the cemetery's price list.(5) If the by-laws of a cemetery prohibit the sale of internment or scattering rights to a third party, the rights holder may cancel the contract with the cemetery and require the operator of the cemetery to repurchase the rights at market value.(6)
Additionally, the punishment for those convicted of an offence under the Act have dramatically increased from those in the predecessor statutes. A person convicted of an offence under the FBCSA is liable to a fine of up to $50,000 and a term of imprisonment of up to two years if the person is an individual;(7) this is a two-fold increase from the previous fines and prison terms.(8) If the convicted person is a corporation, it may be liable for a fine of up to $250,000,(9) an increase in excess of 600% from the repealed punishments.(10)
Market participants should familiarize themselves with the enhanced consumer protection provisions of the FBCSA to ensure compliance.
Any person licensed as a cemetery owner or crematorium owner under the Cemeteries Act ,(11) or any person who held a licence as the operator of a funeral establishment or the operator of a transfer service under the Funeral Directors and Establishments Act(12) on July 1, 2012, shall be deemed to hold the equivalent licence under the FBCSA. The new licence is temporary; legal counsel can assist with securing new licences as well as ensuring a smooth transition into the new regulatory regime.
The FBCSA has dramatically changed the fundamental structure of the bereavement sector in ways that, we submit, will only become apparent in the industry over the next 1-2 decades. The new framework provides a distinct opportunity to expand an existing business and to provide a more modern, cohesive and comprehensive array of services to the baby-boom cohort as they enter their golden years.