Contractors, Renovators and the new Consumer Protection Act

On July 30, 2005, Ontario’s new Consumer Protection Act will come into force (the “New Act”) and will undoubtedly have an impact upon contractors and renovators carrying on business in Ontario. The New Act consolidates the Business Practices Act, the current Consumer Protection Act, the Consumer Protection Bureau Act, the Loan Brokers Act, the Motor Vehicle Repair Act and the Prepaid Services Act into one comprehensive statute and also significantly expands consumer rights and imposes severe penalties on businesses that violate the New Act.

Application of the New Act

The New Act applies to any transaction for the supply of goods or services where either the consumer or supplier of the goods or services is located in Ontario when the transaction takes place. The New Act defines a “consumer”as “an individual acting for personal or household purposes, and does not include a person acting for business purposes”. Accordingly, the New Act does not apply to business-to-business transactions.

Significant Provisions

Some provisions of the New Act that will likely affect the business practices of contractors and renovators include:

• No waiver of rights contained in the New Act –The substantive and procedural rights provided to consumers under the New Act cannot waived or relinquished by consumers.
• Warranty for services –Under the New Act, a supplier is deemed to warrant that any services provided under a consumer agreement are of a reasonably acceptable quality. This is a significant change from previous consumer protection legislation, which only provided a statutory warranty with regards to the supply of goods. 
• Cooling off period - If an agreement for the supply of services or goods is signed in a consumer’s residence, a cooling off period now applies. Under the new cooling off period, a consumer may cancel the agreement up to ten days after receiving a written copy of the agreement from the supplier.
• In addition, a consumer may cancel any agreement for the ongoing provision of goods or services within one year of entering into the agreement if the consumer does not receive a written copy of the agreement from the supplier

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