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Modernizing Ontario's Electronic Land Registration System

Archived Backgrounder

Modernizing Ontario's Electronic Land Registration System

Ministry of Finance

The Ontario government has negotiated the principal terms of a proposed agreement to renew its long-standing business partnership with Teranet Inc., by extending its exclusive licences to provide electronic land registration and writs services in Ontario for an additional 50 years.  The province is the first jurisdiction in the world to provide electronic registration of land-related documents, which enhances security, improves the accuracy and integrity of the database and provides an electronic audit trail.    

Under the proposed transaction, Teranet's owner, Borealis Infrastructure, would provide the province with an upfront payment of $1 billion, which would be used to reduce the province's debt.  This debt reduction would decrease Ontario's ongoing borrowing requirements and save up to $50 million in annual interest costs, or $250 million over five years.  When added to the $1 billion reduction in the deficit, this payment means the government would be borrowing $2 billion less than forecasted.  Lowering interest costs creates more fiscal room.  Beginning in 2017, the province would also receive annual royalty payments from Teranet, which are expected to be approximately $50 million in 2017-18 and to grow in future years. 

The proposed agreement includes commitments by Teranet to ensure Ontario's electronic land registration system remains modern, user friendly, reliable and secure.  The government would also continue to provide oversight of the Electronic Land Registration System. 

The proposed transaction is subject to certain final closing conditions and is expected to close in late 2010.

Significant Consumer Protection

In contrast to the previous government's Highway 407 Express Toll Route transaction, this proposed agreement contains significant consumer protection, such as provincial control over any Teranet fee increases for statutory services.  The proposed agreement does not provide for any fee increases for five years.  In 2015, certain fees would be increased to equalize fees for searches done in land registration offices and those done remotely.  Certain fees would be adjusted by 50 per cent of inflation based on the consumer price index.  Since the adjustments would be based on only 50 per cent of the full rate of inflation, fees would decline in real terms over time. 

This proposed agreement also includes provisions ensuring the province has ongoing participation in Teranet through royalties and the potential to share in any unexpected profits made by Teranet through a sale or exceptional business performance.  

TERANET OVERVIEW AND HISTORY

Teranet was formed in 1991 as a partnership between the Province of Ontario and the private sector to create an electronic land registration system.  The task involved moving from a 200-year-old paper-based system to create a database with records for more than five million parcels of land.

In 1999, the first electronic transaction took place and, since then, registration volumes exceed two million per year.

Teranet, under existing agreements with the province, has the exclusive right until 2017 to operate Ontario's electronic land registration system, which allows for electronic registration of land documents as well as searches relating to real property and writs.

Since Teranet's creation, the province has been involved in a number of Teranet transactions:

  • In August 2003, the previous government sold its 50 per cent interest in Teranet and its entitlement to royalties until 2017, to Teramira, the other owner of Teranet, for $370 million.  The terms of the sale included provincial rights to approve and share in the value of any future sale of Teranet. 
  • In June 2006, through its right to share in the value of any future Teranet sale, the province received proceeds of $573 million from the initial public offering of the Teranet Income Fund. The province contributed $54 million of these proceeds to an overall $116 million investment by Teranet in service improvements and system enhancements to Ontario's electronic land registration system.
  • In November 2008, Borealis, Teranet's current owner, announced its successful takeover bid for the Teranet Income Fund, which was subject to approval by the Province.

The province continues to provide ongoing oversight of the electronic land registration system.



Media Contacts

  • For Media Inquiries only:

  • Kelsey Ingram

    Minister's Office

    kelsey.ingram@ontario.ca

    416-326-1409

  • Scott Blodgett

    Ministry of Finance

    scott.blodgett@ontario.ca

    416-325-0324

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