It was suggested "Exact diagnosis can be made by taking a sample to your local extension office but if it is Phytophthora (or another root invading fungus), there is little you can do now." If such a sample is brought to the Extension Service office, please call ahead so that the Master Gardeners have time to locate information as to how to sample the soil & the affected root tips. Also know that a fee is charged, the precise amount depending upon the test to be done -- fees for the OSU Plant Disease Clinic begin at $40.00. Beyond that, I doubt this will be an easy diagnosis. I'd consider multiple factors potentially contributing to the problem: 1. Because OP said s/he "paid quite a bit of money" I suspect it is a sizable specimen. If so, post-plant irrigation is a critical factor in survival. All transplants should go into evenly moist soil, then the rootball should be supplied with more water than the surrounding area during the following months. Failures of recent transplants typically are due to water -- either too much or too little. 2. The sudden very cold weather in December, without snow cover, damaged & even killed many plants hereabouts, including those which survived 10 years or more. 3. The tree is a recent transplant. As such it is more likely to be damaged by cold than an established tree of the same kind. 4. Dormant roots are less susceptible to water damage than are actively growing roots. 5. In general -- and yes, exceptions exist -- root rot results in entire tree failure. 6. It's nigh to impossible to diagnose root rot by looking at dead branches and/or browning leaves. 7. And perhaps most critical, multiple nearby specimen maples are in potential jeopardy if the problem is indeed soil-borne, such as Phytophthora root rot or verticillium wilt. So, I suggest pinkswine consider having a certified arborist or two come for an on-site evaluation. To locate a certified arborist, look in the Yellow Pages under the heading of Trees or something similar. Ads for companies with a certified aroborist will either have a statement or small rectangular logo stating such.

It looks like it was planted too deeply. Have you removed mulch away from the base already? Do you see anything like a root flare or signs of surface roots? Certainly mulch piled up against the trunk can cause bark to split and peel away as well as more severe problems. You always want a clear span of several inches around the trunk before mulch starts.

My Japanese Maple gets some branches that die every year, requiring pruning, as do several others in other gardens I have worked on. That is not uncommon. The orange material on the bark may be one of two cankers that can kill the bark which then would expose the cambium layer which will dry out and not supply the tree with needed nutrients. Talk with the people at your local AgCanada office to see if they have any suggestions for control. Although I did find information about this on the Cornell web site nothing about treatment was seen.

I obviously don't live in Toronto so can't comment about the suitability of this tree for that area. But I will let you know that colored bark Japanese maples are extremely prone to bacterial blight, Psuedomonas syringae. And this pathogen is encouraged by winter cold damage and cold, wet springs. Even in my very mild winter area, pseudomonas is common on these selections because of spring weather. And it can be fatal. I would site the tree so that it receives maximum winter wind protection and in whatever microclimate you can manage........any "L" formed by the house or other structure, reflected heat from a south facing wall or paved area or in the shelter of other larger growing (and preferably evergreen) trees or shrubs.