NLR 36/23 - Dealer Regulations under the Highway Traffic Act

Short title

1. These regulations may be cited as the Dealer Regulations .

36/23 s1

Definitions

2. In these regulations

(a) "Act" means the Highway Traffic Act ;

(b) "dealer" means a person who is issued a licence under section 17 of the Act;

(d) "sales agreement" means the agreement referred to in section 8.

36/23 s2

Application for licence

3. In addition to the documents and information prescribed in section 17 of the Act, a person applying for a licence to carry on business as a dealer shall provide proof satisfactory to the registrar that

(a) the person is a HST registrant as defined in paragraph 2(dd) of the Revenue Administration Act ;

(b) the person is insured by

(i) a commercial general liability insurance policy of a type and in an amount satisfactory to the registrar, and

(ii) a standard garage insurance policy with a motor vehicle sales endorsement of a type and in an amount satisfactory to the registrar ;

(d) the person has approval from a city, municipal council or other authority acceptable to the registrar to carry on business as a dealer at the location stated in the application.

36/23 s3

Security

4. (1) For the purposes of paragraphs 17(2)(d) and 17(3)(e) of the Act, a person applying for a licence as a dealer shall provide security satisfactory to the registrar in an amount not less than

(a) $5,000 where the dealer intends to issue on a monthly basis temporary registrations the total value of which does not exceed $5,000;

(b) $15,000 where the dealer intends to issue on a monthly basis temporary registrations the total value of which does not exceed $15,000;

(c) $30,000 where the dealer intends to issue on a monthly basis temporary registrations the total value of which does not exceed $30,000;

(d) $50,000 where the dealer intends to issue on a monthly basis temporary registrations the total value of which does not exceed $50,000; and

(e) $75,000 where the dealer intends to issue on a monthly basis temporary registrations the total value of which exceeds $50,000.

(2) Notwithstanding subsection (1), each year a dealer shall adjust the amount of security submitted to the registrar where

(a) the amount of security provided to the registrar by the dealer in the previous year is greater than or less than the amount of security required under paragraphs (1)(a) to (e) for the actual total value of temporary registrations issued in the previous year ; or

(b) the dealer intends to issue on a monthly basis temporary registrations the total value of which is greater than or less than the total value of temporary registrations that the dealer issued on a monthly basis in the previous year and paragraphs (1)(a) to (e) require a different amount of security for the total value of the temporary registrations the dealer intends to issue on a monthly basis .

(3) Security referred to in subsection (1) shall continue in force for a period of 120 days after the expiration of the licence.

(4) Security referred to in subsection (1) is forfeited and the amount of it is recoverable from the person bound by it as a debt due to the Crown where

(a) identification plates or dealer plates held by the dealer are damaged, lost or stolen and the dealer does not comply with paragraph 5(3)(d); or

(b) the dealer does not submit the fees required under subsection 6(1) in accordance with paragraphs 6(2)(b) and 6(3)(b).

36/23 s4

Identification plates and dealer plates

5. (1) The registrar may issue with every dealer's licence the number of identification plates that the registrar considers necessary for each dealer.

(2) The registrar may issue dealer plates to a dealer who

(a) requests dealer plates; and

(b) pays the fee set by the minister.

(3) A dealer to whom identification plates and dealer plates have been issued in accordance with subsections (1) and (2) shall

(a) maintain control of the identification plates and dealer plates;

(b) store the identification plates and dealer plates in a controlled area that may only be accessed by authorized employees;

(d) where the identification plates or dealer plates are damaged, lost or stolen

(i) report the damage, loss or theft to the registrar within 24 hours of the damage, loss or theft; and

(ii) reimburse the registrar for the costs of the identification plates or dealer plates in the amount determined by the registrar within 30 days of a written request by the registrar.

(4) In addition to the requirements in subsection (3), a dealer to whom dealer plates have been issued in accordance with subsection (2) shall

(a) pay a renewal fee each year for each dealer plate issued to the dealer; and

(b) ensure that each use of a dealer plate by a salesperson is recorded in a manner satisfactory to the registrar.

(5) A dealer shall, upon receipt of a written request from the registrar or the registrar's designate, immediately return to the registrar

(a) all identification plates, markers, dealer plates and registration forms provided to the dealer by the registrar; and

(b) all fees collected by the dealer under these regulations.

36/23 s5

Temporary registrations

6. (1) The registrar may authorize a dealer to issue

(a) a temporary registration to the owner of a vehicle who

(i) completes and submits to the dealer an application for the registration of the vehicle in a manner set by the registrar, and

(ii) pays to the dealer the fee set by the minister; and

(b) an identification plate or marker to the owner of a vehicle who

(i) was issued a temporary registration under paragraph (a), and

(ii) pays to the dealer the fee set by the minister.

(2) A dealer who under the authority of subsection (1) issues a temporary registration shall

(a) provide the temporary registration to the owner of the vehicle; and

(b) submit the application and fee referred to in paragraph (1)(a) in the manner set by the registrar within 10 days after issuing the temporary registration.

(3) A dealer who under the authority of subsection (1) issues an identification plate or marker in addition to a temporary registration shall

(a) provide the identification plate or marker to the owner of the vehicle; and

(b) submit the fee referred to in subparagraph (1)(b)(ii) in the manner set by the registrar within 10 days after issuing the identification plate or marker.

(4) A temporary registration issued under this section shall expire 120 days after the date of issue by the dealer.

36/23 s6

Disclosure to purchaser of second hand vehicle

7. (1) Before selling a second hand vehicle to a purchaser the dealer shall provide the following documentation to the purchaser:

(a) a vehicle inspection certificate for the vehicle from an official inspection station; and

(b) a vehicle history record for the vehicle from a person approved by the registrar.

(2) Subsection (1) does not apply where a dealer is selling a second hand vehicle to another dealer.

36/23 s7

Sales agreement

8. (1) At the time of the sale of a vehicle the dealer shall complete a sales agreement that satisfies the requirements in subsection (2).

(2) A sales agreement shall include at a minimum the following information:

(a) the name and address of the purchaser and the dealer;

(b) the date of the sales agreement;

(d) the vehicle identification number;

(e) particulars of extra equipment or accessories to be provided;

(f) the odometer reading;

(g) if the vehicle's odometer is broken or faulty, has been replaced, has been rolled back or is in miles, a statement to that effect;

(h) the selling price, or if sold at an auction, the final price;

(i) the actual amount of the down payment or deposit, if any;

(j) details of a trade-in or exchange, if any, including the amount of any outstanding loans relating to the trade-in or exchange;

(k) additional warranties, if any;

(l) if the dealer financed the purchase, a statement to that effect;

(m) the amount of tax collected on the sale of the vehicle; and

(n) the name of the salesperson.

(3) A dealer shall ensure that there is a separate sales agreement for each vehicle that the dealer sells.

(4) Where 2 or more persons jointly purchase a vehicle, they shall all be shown as owners on the sales agreement.

(5) For each sales agreement referred to in subsection (1) entered into by a dealer, the dealer shall ensure that

(a) the sales agreement is signed by the parties; and

(b) the purchaser receives a copy of the sales agreement immediately after signing it.

(6) The registrar may require that a standard form of sales agreement containing the information referred to in subsection (2) be used by any or all dealers.

36/23 s8

Terms and conditions of licence

9. (1) In addition to the terms and conditions imposed by the registrar and the Act, a licence issued under section 17 of the Act is subject to the terms and conditions prescribed in subsection (2).

(2) A dealer shall

(a) complete a lease agreement that includes the information in subsection (3) at the time of a lease of a vehicle;

(b) ensure that there is a separate lease agreement for each vehicle that the dealer leases;

(c) ensure that where 2 or more persons jointly lease a vehicle they are all shown as lessees on the lease agreement; and

(d) ensure that each lease agreement entered into by a dealer is signed by the parties and the lessee receives a copy of the lease agreement immediately after signing it.

(3) A lease agreement shall include at a minimum the following information:

(a) the information prescribed in subsection 8(2), with the necessary changes;

(b) the amount due at lease signing or delivery;

(d) any other charges that the lessee is required to pay;

(e) the amount of total payments that will be made over the term of the lease;

(f) the portion of the total payments referred to in paragraph (e) that constitutes finance charges;

(g) a calculation of how the monthly payment is determined;

(h) a statement of the rights and obligations of the lessee in the event of early termination of the lease;

(i) the amount to be paid by the lessee in the event of early termination of the lease;

(j) an explanation of what constitutes normal wear and tear, including details regarding any obligation the lessee may have for payment for excessive wear and tear;

(k) the amount to be paid by the lessee for excessive mileage;

(l) the lessee's responsibilities respecting maintenance of the vehicle;

(m) the lessee's responsibility to maintain insurance, including insurance against theft and damage and details of the payment of the insurance proceeds;

(n) the lessee's option to purchase at the end of the lease, if any; and

(o) the lessee's option to purchase, if any, before the end of the lease.

36/23 s9

Retention of records

10. (1) A dealer shall keep the following documents or records in a paper or electronic format for a period of at least one year following the sale or lease of a vehicle:

(a) in relation to a new vehicle

(i) the New Vehicle Information Statement,

(ii) a copy of the sales agreement or where the vehicle is leased, the lease agreement,

(iii) proof of insurance provided by the purchaser's or lessee's insurance company at the time of the sale or lease of the vehicle, and

(iv) documents required by Transport Canada and the Canadian Border Services, where the vehicle was imported; and

(b) in relation to a second hand vehicle

(i) information relating to the purchase or acquisition of the vehicle including

(A) the name and address of the person from whom the vehicle was purchased or acquired,

(B) the date on which the vehicle was purchased or acquired,

(C) an accurate description of the vehicle, including its colour, make, model and year of the vehicle, vehicle identification number and particulars of extra equipment or accessories,

(D) in the case of a trade-in, the amount the purchaser received for the trade-in, and

(E) the odometer reading at the time of purchase or acquisition,

(ii) the vehicle inspection certificate for the vehicle from an official inspection station,

(iii) the vehicle history record for the vehicle from a person approved by the registrar,

(iv) a copy of the sales agreement or where the vehicle is leased, the lease agreement,

(v) proof of insurance provided by the purchaser's or lessee's insurance company at the time of the sale or lease of the vehicle,

(vi) documents required by Transport Canada and the Canadian Border Services Agency, where the vehicle was imported, and

(vii) the amount of tax collected on the sale or lease of the vehicle.

(2) Notwithstanding subsection (1), documents referred to in subparagraphs 10(1)(a)(iv) and (b)(vi) shall be retained by the dealer for the period of time required by Transport Canada and the Canadian Border Services Agency.

(3) A dealer shall ensure that the documents and records referred to in subsection (1) are retained in a secure manner and may only be accessed by authorized employees.

(4) Upon the expiry of the retention periods referred to in subsections (1) and (2), a dealer shall ensure that the documents and records are destroyed in a secure manner.

36/23 s10

Commencement

11. Subsections 4(2) and 4(4) and sections 5 to 10 come into force on June 19, 2023.

36/23 s11

	Table of Regulations	Main Site	How current is this regulation?