Can a Car Dealer's Licence Be Revoked for Dishonesty in Ontario?

Can the Ontario government refuse to license a car dealer because of past dishonesty?

Yes. Under Ontario’s Motor Vehicle Dealers Act, 2002, the Registrar can refuse to register a dealer — or revoke an existing registration — when there are reasonable grounds to believe the applicant will not carry on business with honesty and integrity. The Licence Appeal Tribunal confirmed this power in Ghafoori and Gardiner Motors Ltd. v Registrar, Motor Vehicle Dealers Act, 2002, 2026 CanLII 77452 (ON LAT) (https://www.canlii.org/en/on/onlat/doc/2026/2026canlii77452/2026canlii77452.html).

This matters because Ontario’s car dealership licensing system exists primarily to protect consumers — people buying or leasing vehicles — from operators who might deceive them.

What evidence can the Registrar use to refuse a dealer licence?

The Registrar can rely on criminal convictions and documented deceptive conduct as grounds for refusal. The law does not require proof that the applicant will definitely act dishonestly in the future. Instead, the Registrar needs a reasonable, evidence-based belief — grounded in the applicant’s actual record — that honesty and integrity cannot be assumed.

In this case, the Tribunal found that the applicants’ history of convictions and deceptive representations was exactly the type of evidence the legislation contemplates. A pattern of dishonest behaviour across different contexts is treated as a meaningful indicator of how a person is likely to run a dealership.

Does a criminal record automatically disqualify someone from a dealer licence in Ontario?

No — a criminal record alone does not automatically disqualify an applicant. The Tribunal’s review is always fact-specific. What matters is whether the nature and pattern of past conduct gives reasonable grounds to doubt the applicant’s honesty and integrity in a business setting.

Some convictions will carry more weight than others. Offences involving fraud, deception, or breach of trust are particularly relevant because they speak directly to the character traits the licensing regime is designed to screen. An isolated, dated, and unrelated conviction may carry little weight on its own.

What is the Licence Appeal Tribunal and what role does it play?

The Licence Appeal Tribunal (LAT) is an independent adjudicative body in Ontario that hears appeals from people or businesses whose licence applications have been refused or whose licences have been revoked by a government Registrar. When a motor vehicle dealer challenges a refusal, the LAT conducts a fresh hearing and can confirm, vary, or reverse the Registrar’s decision.

The LAT is not a rubber stamp. Applicants have a genuine opportunity to present evidence and argument. However, where the record clearly supports the Registrar’s concerns, the Tribunal will uphold the refusal — as it did here.

What does this mean for consumers who bought a car from a dealer under investigation?

If you purchased a vehicle from a dealer who later loses their registration, your legal rights as a buyer do not disappear. Ontario has several consumer-protection mechanisms in place, including the Motor Vehicle Dealers Compensation Fund, which can provide financial relief to consumers harmed by a registered dealer’s dishonest conduct.

You may also have civil remedies — for example, claims based on misrepresentation or breach of contract — that are entirely separate from the dealer’s licensing status. If you were misled during a vehicle purchase, it is worth speaking with a lawyer about your options. Our Ontario motor vehicle accident lawyers regularly advise clients on vehicle-related disputes and can help you understand whether you have a claim.

How does Ontario’s dealer licensing system protect car buyers?

The licensing regime acts as a front-line filter. Before a dealer can legally sell vehicles in Ontario, they must be registered under the Motor Vehicle Dealers Act, 2002 and meet ongoing standards of conduct. The Registrar monitors compliance and can act when those standards are not met.

This system is especially important for buyers in high-volume markets. Whether you are purchasing in Burlington, Hamilton, Mississauga, or anywhere else in the province, the law requires that the person selling you a car has cleared a basic integrity threshold. When that threshold is not met, the Registrar has both the authority and the obligation to act.

For clients in the Hamilton and Burlington area, our Burlington motor vehicle lawyers and Hamilton motor vehicle lawyers are familiar with local dealership disputes and consumer protection issues.

Practical takeaways for car buyers and prospective dealers

• Verify registration before you buy. Ontario’s OMVIC (Ontario Motor Vehicle Industry Council) maintains a public registry of licensed dealers. Checking registration before signing anything is a simple but important step.
• Document everything. If a dealer makes representations about a vehicle’s history, condition, or price, get them in writing. Written records are essential if a dispute later arises.
• Know the Compensation Fund exists. If a registered dealer defrauds you, you may be able to claim from Ontario’s Motor Vehicle Dealers Compensation Fund — but there are eligibility rules and deadlines.
• Past dishonesty is a red flag. The LAT’s decision reinforces that a dealer’s track record matters. If something feels off during a transaction, trust that instinct and seek independent advice.
• Applicants with complex histories should get legal advice early. If you are seeking a dealer registration and have prior convictions or regulatory history, understanding how the Registrar is likely to view your record before applying can save significant time and cost.

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This article is automated commentary on a public court decision and is for general information only — not legal advice. Decisions rely on facts unique to each case. If you are affected by a similar issue, contact a lawyer for advice specific to your situation.