Personal Property Security Act (Canada)

The Personal Property Security Act ("PPSA") is the name given to each of the statutes passed by all common law provinces, as well as the territories, of Canada. They regulate the creation and registration of security interests in all personal property within their respective jurisdictions.

It is similar in structure to Article 9 of the Uniform Commercial Code in the United States, but there are important differences.

The legislation that implemented the PPSA scheme was first introduced in Ontario, followed by the remaining provinces and territories (which followed a newer uniform model with notable differences). The Atlantic provinces, together with the Northwest Territories and Nunavut, have fully computerized registries, while the others have varying degrees of electronic and paper registration. The following is a brief outline of how the regime generally works.

The scope of the Act is extremely broad, as it is concerned with every transaction which in substance creates a security interest, without regard to its form and without regard to the person who has title to the collateral. There are small differences between the provinces as to how far this extends, but the concept is basically the same. That said, however, there are some items that are specifically excluded:

Personal property is classified into the following categories:

Security interests are created through attachment, which can be followed on by perfection.

Attachment occurs when

Perfection can occur by possession of the collateral, or by registration. In certain circumstances, possession can be considered to be the superior form of perfection.

A PMSI is a special type of security interest taken in collateral by a party who gives value for the purpose of enabling the debtor to acquire rights in the collateral. Some examples are:

In specified circumstances, PPSA registrants can obtain "super-priority" status over other secured parties, when the following steps are taken:

PPSA security interests can have priority over real property security interests against fixtures, when the secured party registers notice against the land at the local registry or land titles office. Where attachment occurs before the affixation to the land, the interest will have priority, However, where attachment occurs after affixation, the interest is subordinate unless where the debtor otherwise consents.

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