Anyone looking to trade motor vehicles in Ontario must be registered under the Motor Vehicle Dealers Act (“MVDA”). The MVDA sets out seven classes and subclasses of dealers. One of these is the Exporter class.
Each class of registration has specific registration and compliance requirements that must be met during business operations. These Guidelines focus on the obligations of Exporters, outlining the legislative requirements applicable to them and highlighting common issues within this specific dealer class.
These Guidelines are based on the requirements of the MVDA and incorporate statutory obligations from the Highway Traffic Act (“HTA”). While the HTA requirements outlined in these Guidelines generally apply to all dealers that trade in vehicles, they hold added significance for the Exporter class due to a specific obligation detailed in the MVDA. This obligation relates to the registration of the vehicle’s ownership in Ontario before export, regardless of whether the vehicle is intended to be driven within Ontario.
These Guidelines do not alter the law and should not be considered a substitute for legal advice. Registrants are encouraged to seek independent legal advice as necessary to ensure compliance with their legal obligations. In the event of any discrepancy or conflict in wording between these guidelines and the legislation, the legislation will prevail.
Throughout these Guidelines, the terms Exporter(s), dealer(s) and registrant(s) are used interchangeably even though not all registrants are dealers and not all dealers are Exporters. In these Guidelines, such terms should be understood broadly, depending on the context, to refer to the party engaged in export activities.
Dealers registered as Exporters and applicants seeking registration as Exporters, must ensure full compliance with all applicable requirements. While there are general requirements that apply to all dealers, Exporters have specific obligations unique to their class.
Individuals acting on behalf of Exporters are required to be registered if they engage in trading and like all registrants are subject to their own obligations under the law. Furthermore, Exporters are not permitted to have individuals who are not registered to engage in trading with or on behalf of the dealership. Failure of individuals or Exporters to comply with these requirements can result in an offence.
These Guidelines are based on the following legislation:
Generally, like all dealers, Exporters must ensure that they complete and retain all appropriate documentation when they purchase a vehicle for the purposes of facilitating a future trade when they sell the vehicle to a subsequent purchaser. In particular, Exporters are required to take ownership of any vehicle prior to exporting it by: (1) entering into a contract to buy the vehicle in the name of the dealership; and (2) within six days after becoming the owner of the vehicle, the Exporter must apply to the Ministry of Transportation (“MTO”) for a new permit for the vehicle. The result of the latter process is the issuance of a new permit by the MTO in the name of the purchaser (i.e., the exporter’s business name).
Given that Exporters are only permitted to buy vehicles and subsequently sell them elsewhere, it is important that Exporters comply with the MVDA provision that they are under a mandatory obligation to take ownership of the vehicle before exporting it. They cannot simply broker a sale between an Ontario resident that owns a vehicle and a purchaser outside of Ontario that wishes to purchase it.
An Exporter must obtain registration issued by the Registrar under the MVDA before entering into trades of motor vehicles by acquiring vehicles to export or by exporting vehicles to purchasers outside of Ontario.
The Registrar will review the application submitted by a person applying for registration or renewal of registration as an Exporter and will assess their suitability for registration. Once issued, the registration is valid for up to one year and must be renewed each year.
A registration is not transferable. Upon granting or renewing a registration, the Registrar will issue a certificate of registration to the Exporter showing their registered name, registration number, class of registration, registration expiry date, and the place from which they are authorized to trade.
The Exporter is required to post at each place from which it is authorized to trade, a copy of its certificate of registration for that place so that the public is likely to see it.
If there is any change to the information that the Exporter provided to the Registrar in order to obtain registration, the Exporter must notify the Registrar in writing within five days after the occurrence of the event giving rise to the change.
For more information on the registration or renewal requirements, please visit the registration portal.
Exporters are exempt from the advertising requirements outlined in section 36 of Ontario Regulation 333/08 including requirements concerning all-in pricing. This exemption is partly because Exporters are not allowed to sell or advertise vehicles for sale within Ontario. They are only permitted to advertise in relation to the purchase of vehicles.
While an Exporter must maintain and use a bank account for conducting trades, they are not obligated to maintain or use an account designated as a trust account.
Exporters are also not required to pay a fee to the Motor Vehicle Dealer’s Compensation Fund upon registration. Additionally, when they cease to be registered, they are not obligated to provide the Board of Trustees with information regarding potential claims for compensation.
Exporters are subject to the general statutory obligation that dealers, regardless of class of registration, must not retain the services of an unregistered salesperson. This includes the prohibition from retaining the services of unregistered individuals to facilitate the purchase of vehicles from another dealer, a manufacturer or a private seller. Employing a person in their business to assist with acquiring vehicles constitutes employing an unlicensed salesperson. If an Exporter employs anyone in a capacity that requires registration who is not registered to them, the Exporter will be in breach of their obligations.
When applying for registration or renewal of registration, an Exporter will be required to identify all the salespersons who will be acting on their behalf. If the dealer hires or terminates a salesperson, the dealer must, within five days after the event, notify the Registrar in writing of the date of commencement or termination of the employment of the salesperson. In the case of termination, the dealer must also provide the reason for the termination.
Every salesperson employed by the Exporter is responsible for obtaining their registration and complying with their own requirements. Salespersons are prohibited from trading a vehicle on behalf of a vehicle dealer unless the salesperson is registered to that dealer. Salespersons must also provide notice of changes of employment within the prescribed timeline.
The certificate of registration of an Exporter must list the places from which the Exporter is authorized to trade. Except for advertising, Exporters must trade exclusively from their authorized place of business.
The following are some general guidelines with respect to business premises. For more information on the premises requirements, please see the dealer premise guideline.
An Exporter must keep certain business records for at least six years. These records must be kept at the business premise registered with the Registrar and made available for inspection upon demand. The types of records that must be kept are:
The dealer must keep all the required records at one of the following:
OMVIC monitors compliance with all aspects of motor vehicle sales transactions. Dealers who do not comply with applicable requirements could face charges for provincial offences or become subject to administrative action that could include the suspension or revocation of their registration or a disciplinary hearing that could result in the imposition of financial penalties.
For additional information, please check OMVIC’s educational resources, including the website, free seminars or webinars, ask your Inspector for assistance, register for the Certification Course, contact the Dealer Support department or seek legal advice.
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