Any British Columbia business with a “transferable licence” such as farm marketing quota will soon be able to legally use that license as collateral for loans.
Forests and Lands Minister Steve Thomson on Tuesday introduced amendments to the province’s Personal Property Security Act to formally expand its definition of a “licence” and clarify its use as security for loans.
B.C. law on the matter is otherwise “unclear, resulting in uncertainty, higher legal costs and lack of access to credit,” the province said.
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The move to amend the B.C. law follows a Supreme Court of Canada ruling in 2008 over commercial fishing licences in Nova Scotia, the province said.
B.C.’s new law is to specifically state that all transferrable licences regarding personal property may be used in B.C. as collateral, allowing a lender to register a claim against a licence to guarantee a loan.
Other examples of licences expected to benefit from the change would include guide outfitter licences, liquor licences, commercial fishing licences or security business licences, the province said.
Licence issuers who don’t want their type of licences to be subject to the amended rules would be able to add a condition to a given licence to make it non-transferrable, the province added.
“Legal certainty on this issue would make credit transactions less expensive, less risky and less time-consuming” and also keep B.C. on a “level playing field with other provinces,” the government said.
