What is the difference between a fixed charge and a floating charge under Ontario secured lending?

A fixed charge attaches to a specific, identified asset — a piece of real property, specific equipment, or a particular contract right — and generally restricts the corporation from dealing with or disposing of that asset without the lender's consent while the charge is in place. A floating charge, by contrast, covers a changing pool of assets, such as inventory, that the corporation is free to deal with in the ordinary course of business, with the charge only "crystallizing" into something closer to a fixed charge on a triggering event like default.

These terms originate from older secured lending practice, and while they're still used, particularly in debentures, modern Ontario security agreements drafted under the Personal Property Security Act framework achieve much of the same practical effect through the concept of a security interest that can attach to after-acquired, fluctuating collateral like inventory without needing to be described as a separate "floating" charge. In practice, a well-drafted general security agreement today often blends both concepts functionally, covering fixed assets and revolving collateral like inventory and receivables within a single document.