News
The Bankruptcy and Insolvency Act (BIA) contains
a clause requiring a parliamentary review of the
BIA every five years. Previous amendments took
place in 1992 and 1997.
In 2002, the Office of the Superintendent of
Bankruptcy (OSB) held consultations with
stakeholders on a
range of insolvency issues.
Consumer insolvency concerns were also examined
by the Personal Insolvency Task Force, an independent
panel established by the OSB with a membership
comprised of the principal stakeholder groups.
In May 2003, the Standing Senate Committee
on Banking Trade and Commerce was mandated
to examine
and
report on the administration and operation
of the BIA and the Companies Creditors Arrangement
Act.
The Committee released its report in November
2003 outlining 53 recommendations for amendments
to
the BIA. This report can be downloaded
from the OSB website. The full title of
the report
is
Debtors and Creditors Sharing the Burden:
a Review of the
Bankruptcy and Insolvency Act and the Companies'
Creditors Arrangement Act.
If the Minister of Industry decides to
bring accept the recommendations to amend
the BIA,
a memo to
Cabinet will be prepared, and draft legislation
could be available in early 2005. In
August 2003, the OSB commenced an "Initiative
for the Orderly and Timely Administration of Insolvency
Estates" aimed at ensuring that trustees completed
the administration of bankruptcies in a timely
manner. More details on the IOTA initiative can
be found in the December 2003 OSB Newsletter available
on the OSB website.
- Bankruptcy
and Insolvency Act (BIA)
-
Companies' Creditors Arrangement Act (CCAA)
-
Winding-up and Restructuring Act (WURA)
-
Bankruptcy and Insolvency General rules
-
Orderly Payment of Debts Regulations
The Bankruptcy and Insolvency Act (BIA) provides
a legislative framework for the liquidation of
the assets of an insolvent individual, corporation
or partnership, and the distribution of the proceeds
in a fair and orderly way among the creditors.
It provides for the appointment of a trustee to
take charge of the assets, sell them and distribute
the proceeds. Alternatively, the Act provides ways
for insolvent businesses or consumer debtors to
avoid bankruptcy by negotiation arrangements with
their creditors for the compromise of their debts
and the reorganization of their financial affairs.
The Companies' Creditors Arrangement Act (CCAA)
provides a legislative framework for the reorganization
of insolvent corporate debtors. It enables an insolvent
company to seek a court order staying its creditors
from taking action against it while it negotiates
an arrangement with them for the rescheduling or
compromise of its debts.
The Winding-up and Restructuring Act (WURA), provides
an alternative framework to the BIA for the liquidation
and distribution of an insolvent corporation's
assets among its creditors. It is the only legislative
vehicle available for the liquidation of major
financial institutions, including banks, insurance
companies and trust and loan companies, none of
which can be liquidated under the BIA.
Role
played by Government
OSB and the Superintendent
The OSB is established under Part 1 of the BIA
to supervise the administration of all estates.
The OSB helps to ensure that estates in bankruptcy,
commercial reorganizations, consumer proposals
and receiverships are administered in a fair and
orderly manner.
The OSB also regulates licensed bankruptcy trustees.
The OSB is also responsible for keeping all the
public records.
The Superintendent can issue directives under the
BIA.
Official Receivers
Each province constitutes a bankruptcy district
that may be further divided into bankruptcy divisions.
One or more official receivers are appointed
to each bankruptcy division. These are officers
of the Court who report to the Superintendent
on each bankruptcy originating in the division.
Role
played by private sector practitioners
The
Superintendent licenses individuals and corporations
as bankruptcy trustees under the BIA to administer
estates.
Role
played by the Court
The Court has a general oversight role as well
as specific powers under the BIA.
Does
the insolvency system in Canada allow
for:
1.
|
Different
procedures for the insolvency of individuals
and the insolvency of companies? |
|
 |
2.
|
Creditors
to accept an arrangement outside of formal
bankruptcy/liquidation proceedings? |
|
|
3.
|
Priority
payment for employee creditors? |
|
|
4.
|
Priority
payment for taxation debts? |
|
|
5.
|
Automatic
disqualification of directors of failed companies
from managing other companies? |
|
|
6.
|
Recognition
of insolvency proceedings being conducted
in another jurisdiction? |
|
|
7.
|
A
government agency to undertake insolvency
administration work? |
|
|
8.
|
Some
form of licensing of private sector practitioners? |
|
|
9.
|
A
review of the remuneration claimed by an
insolvency practitioner by either a court
or other government regulator? |
|
|
10.
|
A
mandatory scale of fees applicable to insolvency
practitioner remuneration? |
|
|
11.
|
Surveillance
of the work of private sector practitioners
by a government regulator? |
|
|
12.
|
Collation
of insolvency statistics by a government
regulator? |
|
|
|
