This is the first blog of a new series entitled "Tips for the New Entrepreneur" aimed at providing a New Entrepreneur with practical tips and pointers for exploring legal issues when setting up and growing a new business in Ontario. These blogs may also provide, for your convenience, key official sources of reference.
On October 17, 2018, the Ontario government passed Bill 36 - the Cannabis Statute Law Amendment Act, 2018. Among other things, the new legislation enacted the Cannabis Licence Act, 2018, which regulates the licensing, operations, and oversight of private cannabis retailers in Ontario.At this time, recreational cannabis can only be purchased online from the Ontario Cannabis Retail Corporation. However, as of April 1, 2019, recreational cannabis will be sold at physical stores in municipalities across Ontario (with the exception of municipalities which decide to opt out of permitting brick-and-mortar stores).
Tensions between franchise owners and parent companies are not uncommon in business. Such tensions are behind serious franchise law concerns being raised by Tim Hortons franchisees in Ontario and throughout Canada. According to the Great White North Franchisee Association, a franchisee has been denied renewal of his agreement for one of his two Toronto restaurants.The Great White North Franchisee Association has been critical of many decisions made by the new parent company, Restaurant Brands International. The franchisee in question sits on the board of the association. He was also named as a plaintiff in a 2017 class-action lawsuit against the parent company's use of franchisee contributions to a national advertising fund.
Businesses are often influenced by new laws on a local, provincial and national level. As of April 1, Ontario business owners will have to consider a new business law regarding equal pay for equal work. The legislation enacted at the start of the month includes some labour law changes, including requiring full-time and part-time or casual employees to make the same amount of money for the same work.In Ontario, it is illegal to pay someone less due to that individual's gender. However, the government contends that a gender wage gap exists after a two-year review of labour relations. The government says that part-time workers often consist of women and new Canadians, so by paying part-time workers less, the gender wage gap is maintained. This legislation is designed to combat this issue.
Becoming a franchisee is a big decision that should not be taken lightly. One of the best ways to avoid future franchise law issues is by taking the right first steps when identifying, researching and choosing a franchise opportunity. These steps are important for all franchisees in Ontario, whether they are new to the business or they are familiar with the franchise system.Businesses go through strong vetting processes with potential franchisees. Typically, they appreciate seeing that some research has been done in advance of conversations. Research not only will impress the franchisor but will also help the potential buyer understand in-depth if this opportunity makes sense for them. Coming to the table with documentation, proof of qualifications and notes taken during the research phase will support these important conversations.
Lawmakers often pass legislation to protect consumers, though sometimes the laws they pass can be controversial to business interests. In Ontario, a new business law prevents door-to-door sales of items, including furnaces, air conditioners, air purifiers, water heaters, water filters and duct cleaning. The government says the legislation is in response to approximately 4,000 complaints from consumers across the province about deceptive door-to-door sales practices related to these products.Lawmakers say that seniors and new Canadians are particularly vulnerable to door-to-door scams. Ontario lawmakers say they may adjust the legislation to include other products in the future should complaints emerge. The maximum fine for individuals breaking the new business law is $50,000, while corporations may face fines up to $250,000.
The decision to purchase a business is a complicated one. Ontario business people who are considering buying an existing franchise should be aware of franchise law before making this decision. They should also ask four key questions before deciding whether the sale is right for them.The first question which should be asked is about the seller. What is his or her motivation in selling the franchise? In many cases, part or all of the reasons someone is choosing to sell is that the franchise is not profitable. The second question the franchise buyer should ask, which is a follow up to the first, is whether the business is successful. Unsuccessful businesses can be great investments for those who are able to turn them around, but potential buyers should carefully consider whether the reasons for unprofitably can be rectified.
Many employees have questions and concerns regarding the new minimum wage and employee protections. Businesses may also wonder how the government plans to enforce these regulations. In Ottawa, a labour council is taking steps to give employees options if their employer is not abiding by the new regulations.As of Jan. 1, 2018, a new Ontario business law requires employers to pay a minimum of $14 per hour, an increase in the rate of $2.40. In 2019, this will increase to $15 per hour. Some businesses have chosen to offset this new cost by reducing benefits, paid breaks and other perks. The Ottawa and District Labour Council has decided to set up a hotline where employees of companies choosing to make these cuts can inform the public of this activity. ODLC will be sharing the information from the calls on social media as part of the campaign.
All Canadian citizens need to keep a close eye on law changes throughout the country. For business owners, it is particularly critical to keep abreast of any changes to Ontario business law. The new year has brought several legislative changes that will affect employers and workers across the province and country.On a national level, small businesses will be facing tax changes starting in January 2018. Among the changes is the tightening of rules allowing small business owners to engage in "income sprinkling," the practise of redistributing some income to lower-earning family members. Additionally, new federal legislation has begun that affects parents and caregivers planning to begin parental or compassionate leave on or after December 3, 2017. This includes the ability to spread 12 months of benefits over 18 months for parents as well as a 15-week leave to care for critically ill or injured adults.
In a recent case, Hepburn v AlarmForce, 2017 ONSC 6012 ("Hepburn"), the Ontario Superior Court of Justice considered the circumstances in which a "material change" may trigger the disclosure obligation in a renewal of, or extension to, an existing franchise agreement. The decision also addressed the evidentiary considerations engaged in the context of a motion for summary judgment.