The Canadian Association of Private Lenders (“CAPL”) has submitted comments to the Ontario Ministry of Finance in response to its July 2026 consultation paper on proposed amendments to the Mortgage Brokerages, Lenders and Administrators Act, 2006 (“MBLAA”).

The consultation considers measures intended to modernize Ontario’s mortgage-regulatory framework, strengthen consumer protection and reduce unnecessary administrative burden. CAPL’s submission supports the Ministry’s overall direction while recommending that the new rules remain technology-neutral, commercially workable and proportionate to the risks involved.

CAPL’s recommendations address several practical issues affecting Ontario’s mortgage industry, including modern electronic delivery of regulatory notices, the treatment of sophisticated permitted clients, expanded lender options for Level 1 mortgage agents, the use of brokerage team names, and streamlined reporting of material changes in a licensee’s circumstances.

The submission supports robust protections against misrepresentation, undisclosed conflicts and unfair practices. At the same time, it urges the Ministry to preserve flexibility for private lenders, brokerages and sophisticated investors operating in a diverse and evolving mortgage market.

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To: Ontario Ministry of Finance

Submitted by: Canadian Association of Private Lenders

Email: FIPUConsultations@ontario.ca

The Canadian Association of Private Lenders (the “Association”) appreciates the opportunity to comment on the Ministry of Finance’s July 2026 consultation paper, Legislative Review of the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA): Protecting Consumers and Strengthening the Mortgage Industry with Modern Practices in Ontario.

Private lenders are an important source of financing for Ontario consumers, businesses, developers, and property owners, particularly where conventional institutional lending is unavailable or does not meet the borrower’s timing, underwriting, property-type, or credit needs. The Association supports a regulatory framework that protects consumers and investors, promotes transparency and professionalism, and remains practical for participants in a diverse and evolving mortgage market.

The Association generally supports the Ministry’s proposed amendments. Our recommendations are directed toward ensuring that the amendments are technology-neutral, operationally clear, proportionate to the relevant risk, and consistent with the stated objectives of reducing unnecessary burden while strengthening consumer protection.

Section 1: Expand Options for Delivery of Orders and Notices Beyond Registered Mail and Fax

Consultation Question 1: Are there additional delivery methods that should be considered to better align with modern business practices?

The Association supports the proposed amendments to permit delivery of enforcement documents by email, other electronic means, personal delivery, and delivery on counsel. These methods are consistent with current commercial, legal, regulatory, and financial-services practice.

The Association recommends that the regulations expressly permit delivery by:

1. email sent to the most recent email address provided to FSRA by the licensee;
2. a secure FSRA portal or other secure electronic platform, provided the licensee receives an email or other electronic notification that the document is available;
3. personal delivery;
4. delivery to legal counsel, an authorized representative, or an agent for service designated by the licensee;
5. courier; and
6. registered mail.

The regulations should include clear deemed-receipt rules for electronic delivery. An email should be deemed received on the day it is sent if sent before 5:00 p.m. local time on a business day, or on the next business day if sent after that time, unless the sender receives an automated non-delivery message or other reliable indication that the email was not delivered.

The Association also recommends allowing licensees to designate a primary regulatory contact email address, in addition to their general licensing contact information. This would improve the reliability of service and reduce disputes concerning whether a regulatory document reached the appropriate person.

Consultation Question 2: Should any existing delivery methods be phased out as part of this modernization (e.g., fax or registered mail)?

Fax should be phased out as a prescribed primary method of delivery. It is no longer a dependable or widely used communication method in the mortgage industry, and it provides limited assurance that a document has reached the intended recipient.

Registered mail should remain available as an alternative or supplementary method, particularly where electronic delivery is unavailable, fails, or is inappropriate in the circumstances. It should not, however, remain the exclusive or default method for delivery of regulatory enforcement documents. Electronic service will generally be faster, more cost-effective, and better aligned with modern business practices.

Section 2: Waive Suitability Assessments for Permitted Clients for All Types of Mortgage Transactions

Consultation Question 3: Are there any investor protection implications associated with this proposal that should be taken into account? If so, are there any steps that should be taken to mitigate potential risks?

The Association supports extending the permitted-client exemption from suitability assessments to all mortgage transactions, including transactions involving non-qualified syndicated mortgages.

The distinction between non-qualified syndicated mortgages and other mortgage transactions is not necessary where the lender or investor is a sophisticated permitted client. Permitted clients generally have the financial capacity, investment experience, professional resources, and access to legal, financial, and tax advice necessary to evaluate complex mortgage investments. Requiring a brokerage to complete a conventional suitability assessment for these clients can impose process and cost without producing a corresponding investor-protection benefit.

The Association recommends the following safeguards:

1. Written consent by individual permitted clients. Consistent with the proposal, an individual should be treated as a permitted client only if the individual expressly agrees in writing. The written acknowledgment should confirm that the individual:
   • meets the applicable permitted-client criteria;
   • elects to be treated as a permitted client;
   • understands that the brokerage is not required to conduct a suitability assessment; and
   • understands the implications of any permitted waiver of disclosure requirements.
2. Reasonable reliance on client representations. A brokerage should be entitled to rely on a permitted client’s written representation of eligibility unless the brokerage has reasonable grounds to believe the representation is inaccurate. Brokerages should not be required to conduct an intrusive or duplicative audit of a client’s financial assets or net assets.
3. Continuation of core conduct obligations. The exemption should not limit a brokerage’s obligations to act fairly, honestly, and in good faith; avoid misleading statements or omissions; appropriately identify and manage conflicts of interest; and comply with all applicable MBLAA requirements.
4. Provision of essential transaction information. Even where suitability is not assessed, the lender or investor should receive sufficient written information to understand the transaction’s essential terms, including the principal amount, interest rate, fees, security, priority, term, repayment structure, and material transaction-specific risks.

These measures appropriately recognize the sophistication of permitted clients while preserving the integrity of the mortgage market and protecting against misrepresentation, undisclosed conflicts, and other misconduct.

Consultation Question 4(a): Is it appropriate to allow any individual with at least $5 million in financial assets to choose to be treated as a permitted client, and waive the right to a suitability assessment? If not, should this threshold be modified, how and why?

The Association supports retaining the existing $5 million financial-assets threshold for individuals.

This threshold is established under National Instrument 31-103 and is widely understood within Canadian financial-services regulation. It is appropriately high and identifies individuals who are likely to have substantial investment experience, financial sophistication, and access to professional advice. Retaining the threshold promotes consistency with the broader securities-law framework and avoids uncertainty created by introducing a mortgage-specific threshold.

The proposed written opt-in requirement for individuals is an important protection. It ensures that an eligible individual is not automatically deprived of a suitability assessment merely by reason of financial capacity.

Consultation Question 4(b): Is it appropriate to treat any entity with at least $25 million in financial assets as a permitted client? If not, should this threshold be modified, how and why?

The Association supports retaining the existing $25 million net-assets threshold for entities, as reflected in the permitted-client definition under National Instrument 31-103.

Entities meeting this threshold generally have the resources, governance structures, financial sophistication, and access to professional advice required to assess mortgage transactions independently. The existing threshold is also a familiar and workable standard for market participants.

The Association does not recommend excluding any of the current permitted-client categories in Appendix A. These categories include regulated financial institutions, governments, pension funds, managed accounts, investment funds, large entities, and high-net-worth individuals. They are generally well positioned to assess mortgage investment opportunities and obtain appropriate independent advice.

Consultation Question 5: Should the following disclosure requirements be waived to align with the treatment of permitted clients with respect to non-qualified syndicated mortgages (NQSMs)? If a decision is made to waive certain disclosure requirements, individual permitted clients would have to provide written consent to not receive this disclosure from the brokerage. Please articulate why or why not in your response.

The Association supports a targeted rather than blanket approach to disclosure waivers. A permitted-client regime should reduce unnecessary process while preserving disclosure that is fundamental to informed decision-making and the identification of conflicts.

Question 5(a): Section 18 — Disclosure of the role of the brokerage

The Association supports permitting a waiver of the section 18 disclosure for permitted clients.

This disclosure concerns the general nature of the brokerage’s relationship with borrowers and lenders. Sophisticated entities, and individual permitted clients who provide express written consent, can reasonably elect not to receive this general disclosure, particularly in established or repeat commercial relationships.

Question 5(b): Section 19 — Disclosure of the brokerage’s relationship with lenders

The Association supports permitting a waiver of the section 19 disclosure for permitted clients.

This disclosure includes general information concerning the number of lenders with which the brokerage worked in the prior year and whether the brokerage acted as a lender. While useful for retail borrowers and lenders, it is less critical for sophisticated permitted clients who can assess a brokerage relationship through their own due diligence and professional advice.

For individual permitted clients, the waiver should be available only through express written consent.

Question 5(c): Section 25 — Disclosure of material risks

The Association does not support a complete waiver of the section 25 material-risk disclosure requirement.

A sophisticated investor may understand and accept investment risk, but cannot assess a material risk that has not been identified or disclosed. The obligation should therefore remain in place, although the Ministry should permit a streamlined, transaction-specific disclosure approach for permitted clients rather than requiring the same formality or level of detail that may be appropriate for retail clients.

Question 5(d): Section 27 — Disclosure of conflicts of interest or potential conflicts of interest

The Association does not support a waiver of the section 27 conflict-of-interest disclosure requirement.

Actual and potential conflicts are relevant regardless of a client’s sophistication. Disclosure is necessary to allow the permitted client to evaluate the brokerage’s role, incentives, relationships, and potential competing interests in the transaction. Maintaining this obligation will promote market integrity, transparency, and confidence in the mortgage sector.

Section 3: Allow Level 1 Mortgage Agents to Work With Additional Lenders

Consultation Question 6: Beyond the public availability of approved-lender lists, are there any additional consumer-protection measures that should be in place before mortgage agents Level 1 are allowed to work with PRMHIA-approved lenders?

The Association supports permitting Level 1 mortgage agents to work with lenders approved under the Protection of Residential Mortgage or Hypothecary Insurance Act (“PRMHIA”).

The consultation paper notes that the approval process for PRMHIA-approved lenders is aligned with the process for CMHC-approved lenders. Extending eligibility to PRMHIA-approved lenders will increase consumer choice and improve operational flexibility without introducing a material additional risk to borrowers.

The Association recommends the following practical safeguards:

1. FSRA should publish, or provide a direct link to, an up-to-date and searchable list of CMHC-approved and PRMHIA-approved lenders;
2. brokerages should adopt reasonable procedures to verify that a lender is on the applicable approved-lender list before authorizing a Level 1 agent to deal with that lender;
3. brokerages should ensure that Level 1 agents receive training on the scope of their permitted activities, the difference between insured and uninsured lending, and the basic lender-approval requirements applicable to their work; and
4. brokerages should remain responsible for appropriate supervision of their agents and for compliance with all applicable disclosure, conduct, and consumer-protection requirements.

The Association does not recommend additional licensing, transaction-specific approval, or regulatory pre-clearance requirements. Existing brokerage supervision, lender-approval standards, and MBLAA obligations provide a proportionate framework.

Section 4: Allow the Use of Team Names Within a Brokerage

Consultation Question 7: What would be a reasonable transition period for brokerages to provide FSRA with information on the use of team names and why?

The Association recommends a transition period of 12 months after FSRA’s system upgrades are operational and team-name reporting functionality is available.

This period will allow brokerages to identify and document existing team arrangements, confirm the individuals associated with each team, implement internal compliance procedures, update advertising and websites, revise client-facing materials, and ensure that team branding appropriately identifies the sponsoring brokerage.

The Association supports the proposed requirement for brokerages to notify FSRA of team names and the individuals working under each team. To protect consumers and ensure brokerage accountability, the regulations should also require that:

1. a team operate within, and under the supervision of, a single licensed brokerage;
2. all advertising, websites, social-media profiles, promotional materials, and client communications using a team name prominently identify the sponsoring brokerage;
3. a team name not imply that the team is itself a separately licensed brokerage, lender, administrator, or legal entity where that is not the case;
4. the brokerage maintain current records of team membership and supervising personnel; and
5. a team name not be misleading, confusingly similar to another registered name, or otherwise contrary to the public interest.

The FSRA public register should display the team name, the sponsoring brokerage, and the individuals currently associated with the team. This will enhance transparency and help consumers identify the licensed brokerage responsible for the team’s activities.

Consultation Question 8: Currently how common is it for an individual to be a part of more than one team?

It is not uncommon for an individual to participate in more than one team, particularly within larger brokerages or in circumstances where teams are organized by geography, lending specialty, client segment, language capability, or referral channel.

The regulations should not prohibit an individual from participating in more than one team. Instead, FSRA’s reporting system should accommodate multiple team affiliations, and brokerages should be required to maintain accurate and current information regarding each individual’s team membership.

Allowing multiple affiliations recognizes legitimate business arrangements while the public register and brokerage oversight requirements preserve transparency and accountability.

Section 5: Expand Change of Circumstance Reporting

Consultation Question 9: Are there any additional change-of-circumstance events that should be included or excluded from the five-business day reporting requirement?

The Association supports timely reporting of material changes of circumstance to FSRA. The proposed five-business-day reporting obligation will help FSRA identify risks relevant to consumer protection, licensing suitability, and the integrity of the mortgage sector.

The proposed list captures the principal events that should be reported promptly. The Association does not recommend adding further categories at this time. Additional categories should be considered only where implementation experience identifies a clear regulatory or consumer-protection need.

The Association recommends the following clarifications and limitations:

1. Reporting period. The five-business-day period should begin when the licensee becomes aware, or reasonably ought to have become aware, of the reportable event.
2. Regulatory actions. The requirement should apply to material regulatory actions in another jurisdiction, including the imposition of terms, conditions, restrictions, suspension, cancellation, or surrender of a licence. Minor administrative matters, routine filing deficiencies, or temporary technical restrictions should not be treated in the same manner as significant conduct-related regulatory action.
3. Criminal offences. Criminal Code charges should be reported as proposed, excluding the traffic offences identified in the consultation paper. FSRA records and public communications should distinguish clearly between a criminal charge, a conviction, and a final disposition. A charge is an allegation and must not be characterized as a finding of misconduct.
4. Civil and administrative proceedings. Reporting should be limited to proceedings in which the pleading or initiating document specifically alleges fraud, breach of trust, deceit, or misrepresentation. Routine commercial disputes, contractual claims, collection proceedings, employment disputes, tenancy matters, and other civil claims not involving these allegations should be excluded.
5. Bankruptcy and insolvency proceedings. The proposed reporting obligation should apply to bankruptcy and insolvency proceedings under the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act. The regulations should distinguish between a personal consumer proposal and an insolvency event that materially affects the licensee’s ability to conduct licensed activities. Discharged or resolved insolvency matters should not create an ongoing reporting obligation except where required by law or specifically requested by FSRA.
6. Team-name changes. Changes to team membership and cessation of a team name should be reported by the brokerage, rather than separately by each agent or broker associated with the team. The brokerage is best positioned to provide accurate, complete, and current reporting.

These measures will promote timely and meaningful reporting without creating unnecessary volume, ambiguity, or reputational harm based on allegations that have not been established.

Consultation Question 10: If the proposed five business day change-of-circumstances reporting requirement is implemented, should duplicative questions be removed from the Annual Information Return (AIR) to prevent double-reporting?

Yes. The Association strongly supports removing duplicative questions from the Annual Information Return if the proposed five-business-day reporting requirement is implemented.

The AIR should be revised to require licensees only to:

1. confirm compliance with event-driven reporting obligations during the applicable reporting period;
2. disclose any reportable event that was not previously reported; and
3. provide a status update or final disposition for a previously reported matter, where appropriate.

This approach will provide FSRA with current information while avoiding duplicate reporting, administrative burden, inconsistent responses, and unnecessary compliance costs. It is aligned with the Ministry’s objective of modernizing the regulatory framework and reducing unnecessary regulatory burden.

Conclusion

The Association supports the Ministry’s objective of modernizing Ontario’s MBLAA framework while maintaining robust protections for consumers and investors.

In particular, the Association supports:

1. expanding delivery methods for regulatory orders, notices, and summonses through electronic and other modern service options;
2. extending the permitted-client suitability exemption to all mortgage transactions, with appropriate written consent, anti-misrepresentation, conflict-management, and core disclosure safeguards;
3. maintaining the existing permitted-client criteria and financial thresholds under National Instrument 31-103;
4. permitting Level 1 mortgage agents to work with PRMHIA-approved lenders, subject to standard brokerage supervision and accessible approved-lender information;
5. authorizing the use of team names within a brokerage, with transparent public-register reporting and a 12-month implementation period following FSRA system readiness; and
6. implementing prompt change-of-circumstance reporting while eliminating duplicative AIR reporting requirements.

The Association appreciates the opportunity to provide these comments and would welcome further engagement with the Ministry and FSRA as the proposed regulatory amendments are finalized and implemented.

Respectfully submitted,

CANADIAN ASSOCIATION OF PRIVATE LENDERS