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March 24, 2022

Your CFA Advocacy Update

Franchise Awareness Day - OTTAWA
In-Person | Thursday, April 7, 2022

Don't miss an opportunity to connect face-to-face with Members of Parliament (MPs) to help raise awareness about the importance of franchising to Canada and the Canadian Economy.


Liberal-NDP agreement will it work and what it might mean

On March 22, Prime Minister Justin Trudeau announced that the New Democratic Party have formally agreed to a confidence-and-supply agreement that will see the NDP support the minority Liberal government in all budget and confidence votes, outside of back-to-work legislation, effective today until the end of this parliament in 2025. 

This effectively gives the Liberals the opportunity to govern from a majority and lay out a four-year plan for Canadians and the party itself.  

Striking this deal required the Liberals to guarantee movement on key NDP policy issues over the next four years, providing NDP leader Jagmeet Singh with an opportunity to tangibly show Canadians how the NDP have fought for their interests during back-to-back minority governments.  

The priorities agreed to include:

  1. Health Care - Launching a new dental care program for low-income Canadians and progress towards a universal national pharmacare program 
  2. Affordability – Initiatives focused around affordable housing and a homebuyer’s bill of rights, Early Learning and Child Care Act by the end of 2022
  3. Climate Change – Advancing measures to achieve significant emissions reductions by 2030 compared to 2005 levels. 
  4. Workers – 10 days of paid sick leave for all federally regulated workers starts as soon as possible in 2022. Introducing legislation by the end of 2023 to prohibit the use of replacement workers
  5. Reconciliation – commitments to continued funding burial searches at the former sites of residential schools, to work with Indigenous peoples to decide how housing investments are delivered and designed and, to advance policies related to missing and murdered Indigenous women and girls. 
  6. Taxes – tax changes on financial institutions who have made strong profits during the pandemic. Implementing a publicly accessible beneficial ownership registry by the end of 2023.
  7. Elections – expanded “Election Day” of three days of voting and changes to where you can vote.

Is this a coalition government?

No. The NDP does not become part of the Liberal government. New Democrat MPs remain in opposition, they get no seats at the cabinet table and the NDP can walk away from the deal if it feels it no longer serves its interests. 

The deal only requires the NDP to vote in support of the government on confidence votes and budgetary matters such as budget implementation legislation and money bills.

The voting commitment stands until Parliament rises in June 2025, allowing the Liberals to present four federal budgets. 

Click here for Temple Scott Associates detailed analysis of the agreement

PEI Ignition Fund applications are open

Applications are now open for Innovation PEI’s 2022 spring Ignition Fund competition, which offers up to $25,000 to launch or expand a business in Prince Edward Island.

The Ignition Fund is a competitive based fund for entrepreneurs seeking start-up capital for a new innovative business venture or to develop and launch a new product. Applicants must be committed to establishing and operating a new business in this province. Projects will be judged on their innovation and potential economic impact for Prince Edward Island.

Applicants are encouraged to discuss their projects with an Innovation PEI Business Development Officer or attend one of the information sessions. Information on the sessions and how to apply can be found at: Ignition Fund.

The deadline for applications is Monday, May 2, 2022.

Sask. projects $463M deficit, government surprised by quick economic rebound

Saskatchewan's Finance Minister Donna Harpauer says the province is "back on track," forecasting a $463 million deficit for 2022-23.

The projection is a far cry from the $2.6 billion deficit forecast from 2021-22. It is also lower than last year's projection of a $1.7 billion deficit for 2022-23.

Provincial revenues are expected to rise behind high demand for potash and oil. The government is projecting $2.9 billion in non-renewable resource revenue, up from $1.6 billion last year.

Overall revenues are forecast at $17.2 billion, up $2.7 billion from last year.

Tax changes – PST expansion on entertainment events

The government said it will generate $21 million annually through adding PST on many entertainment events. It said it will match the GST on events including:

  • Sporting events.
  • Concerts.
  • Museums.
  • Movies.
  • Gym memberships.
  • Green fees.

The changes come into effect in October 2022

International Franchising and the War in Ukraine - Frequently Asked Questions

Larry Weinberg, Partner, Cassels Brock & Blackwell LLP, General Counsel, Canadian Franchise Association and Vice Chair, International Franchise Association’s International Committee, March 2022


Franchising is an arrangement where a name brand company grants a local entrepreneur the right to use its business name, trademarks, and processes to produce and market a good or service (often called the “system”) through a franchise agreement. The business owner usually pays a one-time fee and a percentage of sales revenue as royalty. Typically, the brand provides support, while the independent owner is responsible for development and day-to-day operations of the business, including employees.


Generally, the fundamental principles of franchising also apply in the international context, namely a franchisor in one country licenses to a franchisee in another country the right to use the franchisor’s “system” and brand name (i.e.: trademarks). Where it differs is that a franchisee in another country is often not just an operator of a single location. Instead, the franchisee is often acquiring the rights to a defined territory, such as an entire country or market (i.e.: a region of a country), and often with the right to sub-franchise in that territory. So, in many instances, the franchisee is in fact a sub-franchisor.


If the franchisor is granting franchise rights to a local business owner or group, then it is one of the hallmarks of the relationship that the franchisor does not own the franchised units in the licensee’s country. That is one of the benefits of using the franchise business model, as it is the franchisee, or even the franchisee’s sub-franchisees, that invest their capital in building and operating the units in that target market. In this way, the company using the franchise business model to expand to a new international market has already reduced their risk in that market, compared to a business that expands to that market corporately. And they benefit by licensing use of their systems and brand to a franchisee who likely has a better understanding of the local laws, customs, language, and business climate.


Most often the parties to these agreements are sophisticated commercial parties, often with pre-existing experience in the business being franchised. So, while a franchisor may have developed forms of international franchise agreements, each franchisor’s form will be tailored to their business and goals. Then each of those form agreements will be presented to the target market candidates and most often be subject to a significant amount of negotiation until finalized and signed. That is not unexpected as international franchise agreements often require significant amounts to be paid for use of the system and brand over a long period of time. And the franchisor wants to ensure that the system and brand are used correctly. So, the final signed agreements are usually unique and very different from one another, and it is difficult to generalize whether something specific is contained in one agreement or another.


As stated above, it is impossible to generalize as to whether none, some or all international franchise agreements would provide such rights to the franchisor. In most cases, international franchise agreements would not provide a franchisor the right to terminate due to some intervening event such as a war, natural disaster, etc.

Yet in some cases, an international franchise agreement may permit the franchisor to terminate the contract if the franchisee engaged in conduct that damaged the reputation of the brand. One instance that could be expected is if the owner of the franchise is connected to one or more of the persons sanctioned by the U.S. or other Western governments.


Each international franchise agreement may be different. Many commercial contracts have “force majeure” provisions that intend to deal with significant intervening events that arise through no fault of the parties. These came to some attention at the outset of the COVID-19 pandemic, as the pandemic was arguably such an intervening event that made performance of a contract impossible in many situations. However, some agreements may have no force majeure provisions, and if they do contain such provisions, then each may be different from another. It all depends on the specific contract.

In most cases, if a force majeure provision exists in the contract, and it applies to a particular set of facts (i.e.: war), then it likely only suspends the parties’ obligations to perform what is required of them under the contract, and for some defined period of time. In rare instances it might say that if the force majeure event continues for longer than the period stipulated, then a party may be able to terminate the contract. It would be rare, or perhaps unheard of, for the force majeure to provide that a party may terminate the contract immediately upon a force majeure event arising.

So, a force majeure may therefore in fact preclude a franchisor from terminating their agreement but relieve them of the obligation to perform while the force majeure event continues. An example could be that the franchisor is relieved of the obligation to provide ongoing support to their franchisee.

In most instances the international franchise agreement would require that each party abide by all applicable laws. So, if the franchisee were to be connected to a sanctioned person, then that may permit a franchisor to terminate the contract. That would likely not be permitted under Russian law, putting the franchisor at risk of having their decision to terminate seen as unlawful by courts in Russia.


Where the force majeure provisions do not suspend the obligation to perform, there may be other ramifications to the contract that arise “on the ground” in the target market. Those need to be determined on a case-by-case basis.

For instance, a country may impose currency restrictions, and so the franchisee is not then legally permitted to pay the franchisor in the currency designated by the international franchise agreement. In that situation the contract may permit that it be terminated regardless of whether the contract contains a force majeure provision.

Or if the events impact supply chains and necessary materials, ingredients or supplies cannot be sourced, then the franchisee may not be able to sell or offer the products in accordance with the franchisor’s system standards. In that case the franchisee may also need to rely on a force majeure provision to cease operations. And in the absence of a force majeure provision, the franchisor may then have a right to terminate the agreement.

What must be remembered is that if a franchisor were to take steps unilaterally that amount to a breach of contract, then the franchisor may be exposed to legal claims by their franchisee either in the target market or in their home market (which often depends on what the international franchise agreement provides as the governing law of the contract, the method by which disputes are to be resolved, and the contract’s choice of venue).


As mentioned, each international franchise agreement is unique. And so, every franchisor should be consulting with their legal advisors to determine their best legal position and practical steps needed to deal with the brand in one or both countries.

From press reports, a number of brands have adopted different positions. In many instances it is likely based on what they believe they are permitted to do under their contract. And if a franchisee has not ceased operations in Russia, it is likely at this point because the franchisor cannot legally force them to shut down.

Three new area codes to roll out in Quebec next fall

Starting this fall, Quebec will be getting three new area codes, providing more options for phone numbers for residents in in the Montreal area, as well as in central and western Quebec.

Last November, the Canadian Radio-television and Telecommunications Commission announced that the 263 area code would be made available for the Montreal region, in addition to the existing codes, 514 and 438.

The 263 area code will be rolling out as of Oct. 22, 2022, as will 354, which will be the new code for regions that now use the area codes 450 and 579. 

There will also be the 468 area code which will be designated for areas served by 819 and 873.

The new area codes will also not affect the process for dialling long-distance numbers or special numbers such as 211, 311, 411, 611 and 911. 

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