Why Applications to a Regulated Industry Are Not as Simple as They Seem

December 7, 2021


Ontario does a very good job regulating certain business sectors in order to ensure a fair marketplace and consumer protection. Three of Ontario’s most common regulated industries are motor vehicle sales, governed by the Motor Vehicle Dealers Act and the Ontario Motor Vehicle Industry Council (“OMVIC“); real estate sales, governed by the Real Estate and Business Brokers Act and the Real Estate Council of Ontario (“RECO“), and; cannabis sales, governed by the Cannabis Licence Act and the Alcohol and Gaming Commission of Ontario (“AGCO“), which also governs liquor licencing.

Each of these industries have their own set of gate-keeping processes designed to ensure that only individuals who meet the minimum requirements obtain the privilege of registration. Typically, the first step in the process of registration is submitting a detailed application to the relevant administrative authority for registration.

Applications are typically in the form of a business application or an individual application. Further, each regulated industry has various subclasses of registration which come with their own set of privileges and restrictions. For instance, registrants seeking registration as a dealer under the OMVIC regime can be licenced as a retailer, wholesaler, exporter or broker.

The registration process for these regulated industries requires applicants to provide information about, among other things, their employment history, business plan, financial responsibility and any past charges or convictions under any law – we highlight the word any as it really is any, and not just charges under Canada’s Criminal Code, which is what so many people applying for registration automatically assume. This assumption has proved fatal for many applicants.

Common issues faced by applicants

While applications serve an important gate-keeping function, their design can often serve to ensnare otherwise good applicants, resulting in additional hurdles and delays.

Defined terms

To start, certain words in applications, such as the word “applicant”, often have meanings ascribed to them that are much broader than one would initially expect. For example, an “applicant” in a business application for OMVIC includes related companies, as well as the individual behind the corporate applicant. So, while the corporate applicant may have never had a charge under any law or been involved in any sort of bankruptcy proceeding, it may have to answer such questions in the affirmative depending on the individual applicant’s circumstances.

Moving too quickly

We often see applicants encounter issues where they have completed a form previously and do not take time to carefully review the document they are currently completing. Forms change over time, sometimes very subtly. Additionally, third parties such as a person’s broker or motor vehicle dealer may complete a form on behalf of an individual without the individual reviewing the application afterwards, which sometimes leads to inadvertent non-disclosure.


Applicants often encounter issues with their applications when they fail to disclose a matter, or attempt to minimize certain facts about relevant history, such as a failed business, or circumstances which led to a bankruptcy. The most common kind of under-disclosure is around an applicant’s history of charges and convictions.

Applicants sometimes make inadvertent errors in explaining past criminal charges not because they are intending to be dishonest, but because they may not adequately understand the difference between certain legal terms such as conditional discharge, absolute discharge, withdrawal, or a stay. In one case, our client failed to disclose a peace bond in answering a question about past court orders in a renewal application because they simply did not appreciate that a peace bond was a court order. This inadvertence was relied upon by the regulator as a false statement and used as evidence of bad character in a subsequent hearing to determine the applicant’s eligibility for registration.

Under any law

As mentioned above, many applicants also innocently assume that a question on their application about pending charges or past convictions only relates to criminal matters, but the question is much broader than that. The question is intended to include matters such as traffic violations, Workplace Safety and Insurance Board matters, and Environmental Protection Act matters – even parking tickets!

But it was so long ago…

Seemingly innocuous and dated pieces of an applicant’s history can be a cause for concern if not properly disclosed. For instance, an applicant can be subject to scrutiny if they fail to adequately disclose a failed business venture or bankruptcy, even if it occurred many years ago. Governing bodies do not necessarily ignore a prior event because it is dated – in fact, the event may be of no concern to the regulator because of its age, but your failure to disclose such dated event may be viewed as a failure to be honest and forthright.


Equally as important as answering the application questions fully and truthfully are the underlying explanations that an applicant may have to provide as part of the application. Applicants may complete the application correctly, but then run into trouble when they explain the circumstances surrounding their answers.

Applications require applicants to disclose their current and previous employment, and their reason for leaving previous employment. Applicants often do not properly disclose their reason for leaving previous employment, which can derail an application and cause significant hardship if not handled appropriately.

For instance, a client failed to disclose in their application that they had been fired from a previous salesperson position further to a disagreement with their employer regarding the manner in which to complete a certain trade (which was ultimately never completed). This applicant then failed to adequately describe the matter when applying to have their licence transferred to a new dealer. This failure was relied upon by the regulator in a subsequent administrative action, as OMVIC took the position that our client had made a false statement on the application. While he was ultimately successful in securing his license, it took several months and caused him much hardship and stress.


In most circumstances we recommend over-disclosure rather than under-disclosure, but over-disclosure also carries its own risks. We have seen applicants who completed applications without legal assistance unnecessarily draw attention to aspects of their history that did not need to be highlighted, leading to more scrutiny from the regulator and delays in the processing of the application. For instance, past lawsuits that were settled out of court may not need to be disclosed in an application. It also remains an open question as to whether a criminal conviction that was pardoned needs to be disclosed. Strategic disclosure is essential to a successful application.

Administrative action

While it is common to face follow-up inquiries from the licencing body after an application is submitted, applicants suspected of being dishonest or submitting false statements in their applications will face more follow-up inquiries from the governing body, delays in the processing of their application, and potential administrative action.

Applicants may ultimately be subject to a “Notice of Proposal to Refuse Registration” as a result of an application which is not completed properly. A proposal to refuse is an administrative proceeding initiated by the governing body’s Registrar. Applicants can appeal Notices of Proposals to the Licence Appeal Tribunal, after which a hearing will proceed to determine the merits of the Registrar’s proposal. If the Licence Appeal Tribunal confirms the Registrar’s proposal after a hearing, the applicant may not re-apply for registration for a period of time, and will then have to show a “material change in circumstances“.1

With the right approach, a proposal to refuse or revoke one’s registration can be resolved in advance of a hearing, typically upon the parties agreeing to terms and conditions of registration. What terms are appropriate and reasonable depends on a variety of circumstances, and is the topic of a whole other article…

How we can help

The appeal process is time-consuming and costly, and in many cases can be avoided if more fulsome disclosure is provided in the first instance.

While Fogler, Rubinoff LLP has experience representing applicants who have been subject to Notices of Proposals, we can also assist with applications for registration with OMVIC, RECO, the AGCO, among other regulators, to expedite the application process and to avoid the potential for a Notice of Proposal. When we assist with your application we ensure:

  • Any past charges or convictions under any law are adequately disclosed and explained;
  • Relevant financial disclosure is complete and unnecessary financial disclosure is omitted;
  • All documents are pre-vetted;
  • Submitted applications are complete, which reduces processing time and reduces the chance the application will be scrutinized; and
  • Follow-up inquiries are answered promptly and in a measured manner while protecting the applicants’ interests.

Having a lawyer vet your documents, compile or review your application and manage correspondence with the regulator can increase your chances of success on your application.

We will also be able to tell you early in the application process whether your application has a chance of success at all, as some things, such as non-payment of taxes, are a complete bar to registration. Other potential bars to registration are derogatory lines on a credit report or negative credit checks. Financial responsibility is something that can often derail an application, but can just as often be remedied before an application is even submitted. In these cases, and after reviewing your documents, we will recommend that you remedy any financial issues before applying.


The Licence Appeal Tribunal has repeatedly confirmed that disclosure obligation in applications is “the first test of honesty and integrity2 , reflective of the requirement in most governing body’s statutes that registrants “carry on business in accordance with the law and with integrity and honesty.”3

While having a lawyer is not required to complete these applications, and many people do so successfully without one, it is often best to seek some legal advice before submitting final drafts of your application papers.

It is crucial that applications are properly submitted the first time. You do not want facts to be discovered into the application process that call your honesty and integrity into question. We will explain the forms and the process fully, ask the right questions to ensure the relevant documents are completed properly, and provide tips to improve the chances of success and get you working in your desired industry faster.


1 See for example Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched. B, s. 12.

2 Hadi Mahmoodi v. Registrar, Real Estate and Business Brokers Act, 2002, 2017 CanLII 50049 (ON LAT); 11845 v. Registrar under the Alcohol, Cannabis and Gaming Regulation and Public Protection Act, 1996, 2019 CanLII 72221 (ON LAT) at para 23.

3 Motor Vehicle Dealers Act, 2002, S.O. 2002, c. 30, Sched. B, s. 6(1); Real Estate and Business Brokers Act, 2002, S.O. 2002, c. 30, Sched. C, s. 10(1); Cannabis Licence Act, 2018, S.O. 2018, c. 12, Sched. 2, s. 3(4), 5(4)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.