Does the PPSA apply to leases of equipment, or only to traditional loans?

The PPSA isn't limited to traditional loans. Ontario's Personal Property Security Act specifically extends to certain leases of goods, particularly longer-term leases that function economically like a financed purchase rather than a short-term rental — these are sometimes described as leases intended as security, or deemed security interests, and the Act treats them the same way it treats a conventional security interest for registration and priority purposes.

This means a lessor providing equipment under this kind of lease generally needs to register a financing statement under the PPSA to protect its interest, just as a lender would, even though the arrangement is structured as a lease rather than a loan. A lessor who assumes a lease automatically protects its ownership interest without registering can be in for an unpleasant surprise if the lessee corporation grants a security interest to another lender, or becomes insolvent, and the lessor's unregistered interest ends up subordinated or unenforceable against that other party. Not every lease is captured this way — genuinely short-term or true operating leases are treated differently — so it's worth confirming with a lawyer whether a specific equipment lease falls within the PPSA's scope.