Alberta Law Reform Institute Report on Personal Property Security Act

The Alberta Law Reform Institute (ALRI) has published its final report on Personal Property Security Law:

"In this Report, ALRI recommends that Alberta amend the Personal Property Security Act [PPSA] through the implementation of recommendations proposed by the Canadian Conference on Personal Property Security Law [CCPPSL] in its 2017 Report (...)"

"Although the PPSA produced a significant improvement in the law, experience with the legislation over the course of the last three decades has revealed several instances where improvements or clarifications are desirable. In some cases, the need for reform is driven by technological advances. When the PPSA was first enacted, electronic banking and electronic commerce were in their infancy. The CCPPSL recommendations facilitate the move to paperless transactions. In some cases, judicial decisions have revealed ambiguities in the legislation that have produced uncertainty. The recommendations would correct these deficiencies. In other cases, the statute simply did not anticipate the kinds of controversies that would be litigated in the future, and therefore did not provide rules for the resolution of these types of disputes."

"The major areas of reform are summarized below:

• The choice of law rules are revised, and the method for determining the location of the debtor is changed so as to align with the new approach adopted in British Columbia, Saskatchewan and Ontario. This produces greater certainty in the law and avoids the deleterious effects of forum shopping that will inevitably arise if provinces and territories employ different choice of law rules.
• The rules that govern purchase-money security interests are clarified and expanded to provide greater guidance on this crucial form of financing. The changes enhance the ability of secured parties to claim purchase-money security interests in inventory, and preserve purchase-money security interest status in a refinancing.
• The rules governing the transfer of collateral to buyers and others are rationalized and improved.
• A number of uncertainties in the rules that determine priorities between secured parties and other competing claimants are clarified so as to produce greater certainty and predictability.
• The registration provisions are improved to better achieve the underlying goals of the registry system, namely the publication of information in a manner that will allow effective risk-assessment by affected parties.
• The concept of electronic chattel paper is introduced to facilitate paperless transactions where this form of property is sold or used as collateral.
• Secured financing is facilitated through amendments that clarify that valuable assets such as licences may be used as collateral, that eliminate red tape requirements that unnecessarily increase the administrative costs of secured finance, and that improve the ability of secured parties to take steps to protect their interest."

The Alberta Law Reform Institute was established on November 15, 1967 by the Government of Alberta, the University of Alberta and the Law Society of Alberta for the purposes, among others, of conducting legal research and recommending reforms in the law. Funding for ALRI’s operations is provided by the Government of Alberta, the University of Alberta and the Alberta Law Foundation.