Is there a lemon law in Ontario?

None of the laws that govern a dealer sale in Ontario gives a buyer a right to hand back a vehicle because it keeps breaking down. The Motor Vehicle Dealers Act, 2002 and its regulations, the Consumer Protection Act, 2002 and the Sale of Goods Act set no number of failed repairs after which a car goes back. What exists instead is five narrower routes, and each one fits a different problem: a manufacturing defect, a car that was not of merchantable quality, a wrong disclosure, a dealer who misled, and a loss the dealer will not or cannot pay. Two of them run on short clocks: 90 days for a cancellation over a wrong disclosure, and one year for a Consumer Protection Act rescission.

Is there a lemon law in Ontario?

Not among the laws that govern a dealer sale. The closest thing to a buyback remedy for a defective vehicle is the Canadian Motor Vehicle Arbitration Plan (CAMVAP), which is an arbitration program between owners and manufacturers rather than a statute, and which covers only newer vehicles. Everything else runs against the dealer, or for the Compensation Fund against the Fund, under the ordinary law of the sale.

The problem	The route	Against	The clock	Where it comes from
A defect in how the vehicle was assembled, or a dispute about how the manufacturer applies its new vehicle warranty	CAMVAP arbitration	The manufacturer	Current or four previous model years, under 160,000 km	CAMVAP’s own rules; the contract statement in s. 39(6) of O. Reg. 333/08
The vehicle was not of merchantable quality, or not fit for a purpose the buyer made known	Implied conditions	The seller	Section 15 sets none of its own	Sale of Goods Act, s. 15
The contract got the distance, prior use, make, model and model year, or branding wrong	Cancellation for non-disclosure	The dealer	90 days from receiving the vehicle	O. Reg. 333/08, s. 50
The dealer made a false, misleading or deceptive representation, or left out a material fact in a way that deceived	Rescission for an unfair practice	The dealer, and each person who engaged in the practice	Notice within one year of the agreement	Consumer Protection Act, 2002, s. 18
A loss in one of the listed situations that the dealer refuses to pay or cannot pay	A claim on the Compensation Fund	The Fund	Notice to the registrar within two years	O. Reg. 333/08, ss. 79 and 80

The Consumer Protection Act, 2002 is the Act in force. The Consumer Protection Act, 2023 that will replace it is Schedule 1 of the Better for Consumers, Better for Businesses Act, 2023 and awaits proclamation.

What is CAMVAP, and can it make the manufacturer buy the car back?

It can, within limits. CAMVAP’s FAQ describes a program for resolving disputes between consumers and vehicle manufacturers through binding arbitration, at no charge to the consumer. An arbitrator can order the manufacturer to repair the vehicle at its expense, to buy an owned or leased vehicle back at a price set by a formula, with or without a reduction for use, to reimburse earlier repairs, and to reimburse up to $500 of diagnostic testing and up to $1,000 of certain out-of-pocket expenses. An arbitrator cannot award punitive damages beyond what the plan allows, cannot void or set aside the purchase or lease agreement, and cannot order a buyback where the vehicle is outside the buyback eligibility rules, even if it cannot be repaired.

CAMVAP’s quick eligibility check asks whether the dispute is about an assembly defect or how the manufacturer administers the new vehicle warranty, whether the vehicle was originally bought from a manufacturer-authorized dealer in Canada, whether it is used mainly for personal or family use, whether it is from the current or four previous model years and has travelled less than 160,000 kilometres, and whether the owner has followed the manufacturer’s dispute resolution process and given the dealer and the manufacturer a reasonable chance to fix the problem. The FAQ also says a consumer can go to court or to CAMVAP, not both.

The program reaches the buyer through the contract. Section 39(6) of O. Reg. 333/08, through paragraph 26 of section 39(2), prescribes a CAMVAP statement for every new vehicle contract. It says CAMVAP “allows consumers to resolve disputes with participating manufacturers about possible defects” in assembly or materials, or about how the manufacturer applies or administers its new vehicle warranty. A used vehicle contract carries the same statement only where the vehicle is from the current model year or one of the four before it and has been driven less than 160,000 kilometres, under section 40(4).

CAMVAP is not OMVIC. OMVIC’s complaints process page says it does not have jurisdiction over vehicle manufacturers or manufacturer warranties, and points buyers with a manufacturer defect to CAMVAP.

What can a buyer claim against the dealer?

Three routes run against the dealer, and they answer different questions.

Was the car fit to sell? Section 15 of the Sale of Goods Act implies that goods bought by description from a seller who deals in them are of merchantable quality, except for defects the buyer’s own examination ought to have revealed, and that goods are reasonably fit for a purpose the buyer made known and relied on the seller for. For a consumer, section 9(3) of the Consumer Protection Act, 2002 makes void any term that purports to negate or vary those conditions. Once the buyer has accepted the vehicle, or property in it has passed, a breach is a claim for damages or a price reduction rather than a right to return it, unless the contract says otherwise, under sections 12(3) and 51. The sale of goods guide walks through both conditions, and A safety certificate is not a warranty sets them beside a certified or as-is sale.

Did the contract get one of four facts wrong? Section 50 of O. Reg. 333/08 cancels the contract, and any extended warranty or service plan with it, where the dealer did not accurately disclose the distance driven, previous use as a daily rental, police, emergency, taxi or limousine vehicle, the make, model and model year, or how the vehicle was last classified as irreparable, salvage or rebuilt. The written notice has to go within 90 days after the buyer actually received the vehicle, under section 50(5). A mechanical failure is not one of the four grounds. The full disclosure list and the cancellation timetable are in What a car dealer must disclose in Ontario. Deposits, and why signing is final in every other case, are in There is no cooling-off period on a car in Ontario.

Did the dealer mislead? Section 18(1) of the Consumer Protection Act, 2002 lets a consumer rescind an agreement entered into after or while a person engaged in an unfair practice, with any remedy available in law, including damages. Section 14(2) lists what counts, including a representation that goods are of a particular standard or quality when they are not. Notice has to be given within one year after entering into the agreement, under section 18(3), and section 18(12) makes each person who engaged in the unfair practice liable jointly and severally with the dealer.

When does the Compensation Fund pay?

Only in the situations the regulation lists, and only for a consumer. Section 79(1) of O. Reg. 333/08 requires a claim arising from a trade with a dealer who was registered at the time, a customer acting as a consumer within the meaning of the Consumer Protection Act, 2002, and a written demand for payment that the dealer refused or could not meet. The claim also has to fit one of eleven paragraphs in section 79(3). Four of them bear on a vehicle that fails after the sale:

• Paragraph 5: a deficiency the dealer has refused to remedy, where the vehicle lacks something the customer had indicated was material to the trade, or has something the customer had indicated was material for it not to have. The claim cannot exceed the vehicle’s total sale price, or the lease value for a lease.
• Paragraph 7: an extended warranty the dealer sold or facilitated, including the cost of repairs that should have been provided under it where the dealer sold the warranty.
• Paragraph 9: a refund the dealer owes under section 50 after a cancellation for non-disclosure.
• Paragraph 10: a court judgment or order for compensation or restitution that has become final and that the dealer has not paid.

The other paragraphs cover a proposal to suspend, revoke or refuse to renew the dealer’s registration that the dealer did not contest or the Tribunal upheld, a conviction in connection with the trade, a vehicle seized by a law enforcement authority or by a creditor other than the customer’s, the deposit on a vehicle never delivered, a service plan, and a liquidated amount owed by a dealer that has gone bankrupt, been wound up or had a receiver appointed.

Paragraph 5 turns on what the customer indicated was material, which is one reason the buyer’s own line in the contract matters: paragraph 27 of section 39(2), carried into used vehicle contracts by section 40(2), is a statement by the purchaser of any facts about the vehicle they consider material to the purchase.

The limits sit in section 83. Total compensation on a claim cannot exceed $45,000, not counting costs or interest a court awarded, under subsections (5) and (6), or what the dealer itself would owe, under subsection (1). Interest is paid only where a court awarded it, costs only where a court awarded them for amounts the customer actually paid, and punitive damages never. Notice goes to the registrar in writing within two years after the claim first meets the requirements of its paragraph, under section 80(1), and the Board may extend that time. Before paying, the Board may require the customer to get a judgment first or exhaust other remedies, under section 82(3). A vehicle bought privately never reaches the Fund, since the claim has to arise from a trade with a registered dealer.

Where does an OMVIC complaint fit?

Beside the money routes, not in place of them. OMVIC’s complaints process page says OMVIC cannot compel or order a dealer to cancel a contract, return money, or carry out repairs. What the registrar can do with a complaint is set by section 14(4) of the MVDA: attempt to mediate or resolve it, give a written warning, require further courses, refer the matter to discipline, act on the registration under section 8, or take further action in accordance with the Act. None of that stops the section 50 clock, so a buyer relying on it sends the cancellation notice within the 90 days whether or not a complaint is open. The Compensation Fund guide, the consumer protection guide and the rescission guide set out each route’s sections in full.