OMVIC and the Regulatory Framework Applicable to Auto Dealers in Ontario
In Ontario, auto dealers (and their salespeople) are regulated under the Motor Vehicle Dealers Act, 2002 S.O. 2002, c. 30, Sched. B (the MVDA), which includes various Regulations that carry the force of law.
There are also sections of the Consumer Protection Act, 2002, S.O. 2002, c. 30, Sched. A (the CPA) which apply to consumer transactions involving the sale, purchase and leasing of a motor vehicle in Ontario.
The actual regulation of dealers has been delegated to the Ontario Motor Vehicle Industry Council or OMVIC, by the Ministry of Government and Consumers Services or the MGCS under an Administrative Agreement that sets out OMVIC's jurisdiction, accountability, reporting obligations, and financial arrangements (among other matters).
OMVIC is a self-funding Delegated Administrative Authority or DAA.
OMVIC's "self-funding" mandate is important because it means that OMVIC has a financial interest in charging dealers under the MVDA with various offences to generate revenue. In law, fines levied by an administrative authority are called administrative monetary penalties or AMPs, which cannot be opaque, arbitrary or capricious.
OMVIC's "DAA" status is important because it means that, as a pseudo-governmental agency or body corporate acting under the authority and supervision of the MGCS, it is subject to the Canadian (i.e. Federal) Charter of Rights and Freedoms and other statutes that govern the limits of its jurisdiction over auto dealers and salespeople.
All of the above is important legal mumbo-jumbo that a lawyer proficient in auto dealer law can use against OMVIC when it comes after your dealership or your staff.
This is where I come in.
My AUTO DEALER Compliance and Defence Practice
My practice includes proactive advice to dealers and their staff to keep them compliant with the MVDA and the CPA and defence work when OMVIC initiates a complaint against them.
Here are three quick tips that could save your business or your license or save you a lot of money:
1. Call me (or an experienced auto dealer lawyer) as soon as possible after OMVIC calls you for an inspection or charges you.
2. Do not ignore notices from OMVIC regarding alleged discipline or licensing infractions because they will not just go away.
3. Do not just "plead out" to an alleged discipline offence and an OMVIC-proposed fine, without getting legal advice.
If you think discipline offences should be resolved by just paying the fine and agreeing to the wording proposed by OMVIC, you would be mistaken because at some point down the road, your license will be at risk as a "repeat offender".
When you hire an experienced auto dealer lawyer who knows OMVIC, there are several avenues of attack against its jurisdiction and regulatory actions that can be taken to get the charges and/or fines withdrawn and/or reduced, including non-prejudical wording as part of a negotiated "consent" decision.
Sidebar on OMVIC's Fines: As things stand now (i.e. as at January 2021), OMVIC's power to levy fines on dealers and salespeople has not yet been challenged in the Ontario Divisional Court or the Ontario Court of Appeal. I believe OMVIC's fines are unenforcable because it has yet to publish its "secret formula" showing how it calculates and levies its fines for any given MVDA violation. If this sounds too good to be true, I suggest that you read the trial and appeal decisions in the case of The Queen v. Kabul Farms. I came very close to launching a challenge against OMVIC's arbitrary and capricious fines but, instead, at the request of my client, I negotiated a nominal (very small) fine and neutral text as part of a negotiated resolution of the charges. If you have been charged by OMVIC and are willing to challenge its proposed fine, then, please contact me.
My Tools for AUTO Dealer COMPLIANCE AND DEFENCE
- My GJA Auto Dealer Compliance ProgramTM which offers three levels of service: Gold, Silver and Bronze).
- My GTA Dealers AssociationTM which offers an annual membership (and includes legal advice).
- My GJA Table of OMVIC Discipline DecisionsTM , which is table listing charges and fines levied by OMVIC to help a dealer determine whether a fine proposed by OMVIC is reasonable.
- My GJA Dealer Compliance Report CardTM (for buyers or sellers of dealerships) which covers the following aspects of a dealership's operations:
- Registration and Back-Office Operations
- Trust Accounts, Advertisements & Trade Practices
- Sales Contracting Procedures
- Informal Dispute Resolution and Notification Procedures
- Continuing Education Policies / Procedures
- Business Record-Keeping Policies / Procedures
My Auto Dealer Law PUBLICATIONS
- Beware of Compliance Consultants - GJA Special Edition Newsletter - Sept 2020
- Operational Controls to Prevent Insider Fraud - GJA Special Edition Newsletter - June 2018
- Are OMVIC's Fines Enforceable? - GJA Special Edition Newsletter - March 2018
- Revisiting the Auto Dealer Workplace – GJA Newsletter - Feb 2018
- Dealing with High-Risk for Exports Cars - GJA Special Edition Newsletter - Dec 2016
- Beware of OMVIC Mystery Shoppers - GJA Special Edition Newsletter - Nov 2016
- Don't Let OMVIC Bully You - GJA Special Edition Newsletter - Dec 2015
Beware of Compliance Consultants
Please read my Special Edition Newsletter (see above) about compliance consultants for a detailed discussion about the pitfalls of hiring these consultants.
If you have been approached by one of these consultants, here are three quick reference tips:
1. Apply the rule of Caveat Emptor (i.e. buyer beware): Compliance consultants are not licensed or regulated.
2. Get Legal Advice Before Signing a Consultant's Contract: Do not sign a contract with a compliance consultant without getting legal advice about it because it may include an in-bound indemnity clause.
3. Inquire About the Consultant's Errors and Omissions Insurance: If the consultant does not have E&O insurance coverage, then, you have no protection for negligent advice.
Only an experienced auto dealer lawyer (who is fully licensed by the LSO and insured by LawPro) can be held accountable for the compliance advice and defence work provided.
In addition, only a lawyer can protect written communications and memos prepared in contemplation of litigation (i.e. an OMVIC Discipline or Licensing charge) from discovery by OMVIC.
For example, a compliance consultant will typically prepare and send a GM or a Dealer Principal a CYA e-mail or memo about a certain matter. That communication, which may memorialize an MVDA or CPA offense by the dealer or its staff, will be discoverable by OMVIC because it is not covered by lawyer-client or litigation privilege.
If you want more information about my auto dealer compliance programs, please contact me using the envelope link below.
If you have been charged by OMVIC, please call me as soon as possible, using the telephone link below.