OBCA Corporations – New Record-Keeping Requirements for Real Estate But is a Mining Claim an Interest in Land?

The new Section 140.1 of the Business Corporations Act (Ontario) (the “OBCA”) quietly came into force on December 10, 2016. It requires OBCA governed corporations to maintain an updated register of their “ownership interests in land in Ontario”.

Interestingly, the phrase “ownership interest in land” is not defined; thus this requirement may extend to both legal and beneficial ownership in real property. In addition, a corporation holding a charge or mortgage, options to purchase, easements, right-of-way interests, mining claims and possibly leasehold interests over land in Ontario, as suggested by some commentators, may also be required to be listed in its register. Mining companies, however, should be aware that in 2017 an Ontario court[1] concluded that mining claims cannot be considered “land” under the Ontario’s Expropriations Act. The case notably references a line of historical cases that did find mining claims as defined under certain specific legislation to be an equitable interest in land, including: (i) a Supreme Court of Canada decision[2] where an option to purchase a mining claim was found to create an equitable interest in land as under Saskatchewan’s legislation at the time a mining claim gave rise to a right to lease  as opposed to a right to apply for a lease  as is the case in Ontario and (ii) an Ontario case[3] where a mining interest was considered to be “land” for the purposes of a writ of execution under the Ontario’s Execution Act.

Generally, corporate records and registers must be kept at the registered office or at such other place as is designated by the directors provided an electronic copy is available for inspection during business hours. However, new proposed Subsection 144(3) of the OBCA, which is not yet proclaimed in force, restricts the corporation’s ability to keep the register of ownership interests in land in any place other than the registered office.

The register must identify each property owned by the corporation and show the date on which the corporation acquired the land and, if applicable, the date on which the corporation disposed of it.

The corporation must also keep evidentiary support to substantiate the register by keeping a copy of any deeds, transfers or similar documents that contain the property’s municipal address, legal description, PIN and roll numbers, if assigned.

The OBCA does not provide a specific penalty for failure to comply with this new requirement. However, we should be reminded that any failure or neglect to comply with any provision of the OBCA or the regulations without reasonable cause is an offence under Subsection 258(1) of the OBCA can be subject to a heavy penalty or even imprisonment.

A grace period of two years to comply with the new record-keeping requirements is given only to corporations incorporated or continued prior to the December 10, 2016 effective date of this new legislation. Those pre-existing corporations must bring themselves into compliance by December 10, 2018.