An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005 (S.C. 2007, c. 36)
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Assented to 2007-12-14
R.S., c. B-3; 1992, c. 27, s. 2BANKRUPTCY AND INSOLVENCY ACT
28. (1) Subsection 66(1.1) of the Act, as enacted by section 45 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Assignments
(1.1) For the purposes of subsection (1), in deciding whether to make an order under subsection 84.1(1), the court is to consider, in addition to the factors referred to in subsection 84.1(3), whether the trustee approved the proposed assignment.
(2) Subsection 66(1.3) of the Act, as enacted by section 45 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Examination by official receiver
(1.3) For the purposes of subsection (1), the examination under oath by the official receiver under subsection 161(1) is to be held — on the attendance of the person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) — before the proposal is approved by the court or the person becomes bankrupt.
Marginal note:Division to be applied conjointly with other Acts
(1.4) The provisions of this Division may be applied together with the provisions of an Act of Parliament, or of the legislature of a province, that authorizes or provides for the sanction of compromises or arrangements between a corporation and its shareholders or any class of its shareholders.
29. Subsection 66.28(2.1) of the Act, as enacted by section 51 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:When consumer debtor is released from debt
(2.1) A consumer proposal accepted, or deemed accepted, by the creditors and approved, or deemed approved, by the court does not release the consumer debtor from any particular debt or liability referred to in subsection 178(1) unless the consumer proposal explicitly provides for the compromise of that debt or liability and the creditor in relation to that debt or liability voted for the acceptance of the consumer proposal.
30. Subsections 66.31(2) to (10) of the Act, as enacted by section 52 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
Marginal note:Deemed annulment — amendment withdrawn or refused
(2) If an amendment to a consumer proposal filed before the deemed annulment of the consumer proposal under subsection (1) is withdrawn or refused by the creditors or the court, the consumer proposal is deemed to be annulled at the time that the amendment is withdrawn or refused.
Marginal note:Duties of administrator in relation to deemed annulment
(3) Without delay after a consumer proposal is deemed to be annulled, the administrator shall
(a) file with the official receiver a report in the prescribed form in relation to the deemed annulment; and
(b) send a notice to the creditors informing them of the deemed annulment.
Marginal note:Effects of deemed annulment — consumer proposal made by a bankrupt
(4) If a consumer proposal made by a bankrupt is deemed to be annulled,
(a) the consumer debtor is deemed to have made an assignment on the day on which the consumer proposal is deemed to be annulled;
(b) the trustee who is the administrator of the consumer proposal shall, within five days after the day on which the consumer proposal is deemed to be annulled, send notice of the meeting of creditors under section 102, at which meeting the creditors may by ordinary resolution, despite section 14, affirm the appointment of the trustee or appoint another trustee in lieu of that trustee; and
(c) the trustee shall, without delay, file with the official receiver, in the prescribed form, a report of the deemed annulment and the official receiver shall, without delay, issue a certificate of assignment, in the prescribed form, which has the same effect for the purposes of this Act as an assignment filed under section 49.
Marginal note:Validity of things done before deemed annulment
(5) A deemed annulment of a consumer proposal does not prejudice the validity of any sale or disposition of property or payment duly made, or anything duly done under or in pursuance of the consumer proposal and, despite the deemed annulment, a guarantee given under the consumer proposal remains in full force and effect in accordance with its terms.
Marginal note:Notice of possibility of consumer proposal being automatically revived
(6) In the case of a deemed annulment of a consumer proposal made by a person other than a bankrupt, if the administrator considers it appropriate to do so in the circumstances, he or she may, with notice to the official receiver, send to the creditors — within 30 days, or any other number of days that is prescribed, after the day on which the consumer proposal was deemed to be annulled — a notice in the prescribed form informing them that the consumer proposal will be automatically revived 60 days, or any other number of days that is prescribed, after the day on which it was deemed to be annulled unless one of them files with the administrator, in the prescribed manner, a notice of objection to the revival.
Marginal note:Automatic revival
(7) If the notice is sent by the administrator and no notice of objection is filed during the period referred to in subsection (6), the consumer proposal is automatically revived on the expiry of that period.
Marginal note:Notice if no automatic revival
(8) If a notice of objection is filed during the period referred to in subsection (6), the administrator is to send, without delay, to the official receiver and to each creditor a notice in the prescribed form informing them that the consumer proposal is not going to be automatically revived on the expiry of that period.
Marginal note:Administrator may apply to court to revive consumer proposal
(9) The administrator may at any time apply to the court, with notice to the official receiver and the creditors, for an order reviving any consumer proposal of a consumer debtor who is not a bankrupt that was deemed to be annulled, and the court, if it considers it appropriate to do so in the circumstances, may make an order reviving the consumer proposal, on any terms that the court considers appropriate.
Marginal note:Duty of administrator if consumer proposal is revived
(10) Without delay after a consumer proposal is revived, the administrator shall
(a) file with the official receiver a report in the prescribed form in relation to the revival; and
(b) send a notice to the creditors informing them of the revival.
31. Section 66.34 of the Act is amended by adding the following after subsection (6):
Marginal note:Eligible financial contracts
(7) Subsection (1) does not apply in respect of an eligible financial contract.
Marginal note:Existing eligible financial contracts
(8) For greater certainty, if an eligible financial contract, entered into before a consumer proposal is filed, is terminated on or after the filing of the proposal, the setting off or compensation of obligations — between the consumer debtor and the other parties to the eligible financial contract, in accordance with its provisions — is permitted and, if net termination values determined in accordance with the eligible financial contract are owed by the consumer debtor to another party to the eligible financial contract, the other party is deemed, for the purposes of subsection 69.2(1), to be a creditor of the consumer debtor with a claim provable in bankruptcy in respect of the net termination values.
Marginal note:Definitions
(9) In this section, “eligible financial contract” and “net termination value” have the same meanings as in subsection 65.1(8).
32. (1) Paragraphs 67(1)(b) to (b.3) of the same statute, as enacted by subsection 57(1) of Chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
(b) any property that as against the bankrupt is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides;
(b.1) goods and services tax credit payments that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b);
(b.2) prescribed payments relating to the essential needs of an individual that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b); or
(b.3) without restricting the generality of paragraph (b), property in a registered retirement savings plan or a registered retirement income fund, as those expressions are defined in the Income Tax Act, or in any prescribed plan, other than property contributed to any such plan or fund in the 12 months before the date of bankruptcy,
(2) Paragraph 67(1)(c) of the Act, as enacted by subsection 57(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
(c) all property wherever situated of the bankrupt at the date of the bankruptcy or that may be acquired by or devolve on the bankrupt before their discharge, including any refund owing to the bankrupt under the Income Tax Act in respect of the calendar year — or the fiscal year of the bankrupt if it is different from the calendar year — in which the bankrupt became a bankrupt, except the portion that
(i) is not subject to the operation of this Act, or
(ii) in the case of a bankrupt who is the judgment debtor named in a garnishee summons served on Her Majesty under the Family Orders and Agreements Enforcement Assistance Act, is garnishable money that is payable to the bankrupt and is to be paid under the garnishee summons, and
33. (1) The portion of the definition “total income” in subsection 68(2) of the Act before paragraph (b), as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
“total income”
« revenu total »
“total income”
(a) includes, despite paragraphs 67(1)(b) and (b.3), a bankrupt’s revenues of whatever nature or from whatever source that are earned or received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, including those received as damages for wrongful dismissal, received as a pay equity settlement or received under an Act of Parliament, or of the legislature of a province, that relates to workers’ compensation; but
(2) The definition “surplus income” in subsection 68(2) of the English version of the Act, as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
“surplus income”
« revenu excédentaire »
“surplus income” means the portion of a bankrupt individual’s total income that exceeds that which is necessary to enable the bankrupt individual to maintain a reasonable standard of living, having regard to the applicable standards established under subsection (1).
(3) Subsection 68(4) of the French version of the Act, as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Obligations du syndic par suite de la décision
(4) Il avise, de la manière prescrite, le séquestre officiel et les créanciers qui en font la demande de sa conclusion et, s’il conclut que le failli a un revenu excédentaire, il fixe, conformément aux normes applicables, la somme que celui-ci doit verser à l’actif de la faillite et prend les mesures indiquées pour qu’il s’exécute.
(4) Subsection 68(7) of the English version of the Act, as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Creditor may request mediation
(7) On a creditor’s request made within 30 days after the day on which the trustee informed the creditor of the amount fixed under subsection (4) or (5.1), the trustee shall, within five days after the day on which the 30-day period ends, send to the official receiver a request, in the prescribed form, that the matter of the amount that the bankrupt is required to pay be determined by mediation and send a copy of the request to the bankrupt and the creditor.
(5) Subsections 68(14) and (15) of the Act, as enacted by subsection 58(4) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
Marginal note:Application is a proceeding
(14) For the purposes of section 38, an application referred to in subsection (10) is deemed to be a proceeding for the benefit of the estate.
Marginal note:Property included for enforcement purposes
(15) For the purpose of this section, a requirement that a bankrupt pay an amount to the estate is enforceable against the bankrupt’s total income.
Marginal note:When obligation to pay ceases
(16) If an opposition to the automatic discharge of a bankrupt individual who is required to pay an amount to the estate is filed, the bankrupt’s obligation under this section ceases on the day on which the bankrupt would have been automatically discharged had the opposition not been filed, but nothing in this subsection precludes the court from determining that the bankrupt is required to pay to the estate an amount that the court considers appropriate.
Marginal note:1992, c. 27, s. 36(1)
34. The portion of subsection 69(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Stay of proceedings — notice of intention
69. (1) Subject to subsections (2) and (3) and sections 69.4, 69.5 and 69.6, on the filing of a notice of intention under section 50.4 by an insolvent person,
Marginal note:1992, c. 27, s. 36(1); 1997, c. 12, s. 63(1)
35. The portion of subsection 69.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Stay of proceedings — Division I proposals
69.1 (1) Subject to subsections (2) to (6) and sections 69.4, 69.5 and 69.6, on the filing of a proposal under subsection 62(1) in respect of an insolvent person,
36. Subsection 69.3(1) of the French version of the Act, as enacted by subsection 62(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Suspension des procédures en cas de faillite
69.3 (1) Sous réserve des paragraphes (1.1) et (2) et des articles 69.4 et 69.5, à compter de la faillite du débiteur, ses créanciers n’ont aucun recours contre lui ou contre ses biens et ils ne peuvent intenter ou continuer aucune action, mesure d’exécution ou autre procédure en vue du recouvrement de réclamations prouvables en matière de faillite.
37. The Act is amended by adding the following after section 69.5:
Meaning of “regulatory body”
69.6 (1) In this section, “regulatory body” means a person or body that has powers, duties or functions relating to the enforcement or administration of an Act of Parliament or of the legislature of a province and includes a person or body that is prescribed to be a regulatory body for the purpose of this Act.
Marginal note:Regulatory bodies — sections 69 and 69.1
(2) Subject to subsection (3), no stay provided by section 69 or 69.1 affects a regulatory body’s investigation in respect of an insolvent person or an action, suit or proceeding that is taken in respect of the insolvent person by or before the regulatory body, other than the enforcement of a payment ordered by the regulatory body or the court.
Marginal note:Exception
(3) On application by the insolvent person and on notice to the regulatory body and to the persons who are likely to be affected by the order, the court may order that subsection (2) not apply in respect of one or more of the actions, suits or proceedings taken by or before the regulatory body if in the court’s opinion
(a) a viable proposal could not be made in respect of the insolvent person if that subsection were to apply; and
(b) it is not contrary to the public interest that the regulatory body be affected by the stay provided by section 69 or 69.1.
Marginal note:Declaration — enforcement of a payment
(4) If there is a dispute as to whether a regulatory body is seeking to enforce its rights as a creditor, the court may, on application by the insolvent person and on notice to the regulatory body, make an order declaring both that the regulatory body is seeking to enforce its rights as a creditor and that the enforcement of those rights is stayed.
38. Sections 81.3 and 81.4 of the Act, as enacted by section 67 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
Marginal note:Security for unpaid wages, etc. — bankruptcy
81.3 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a bankrupt for services rendered during the period beginning on the day that is six months before the date of the initial bankruptcy event and ending on the date of the bankruptcy is secured, as of the date of the bankruptcy, to the extent of $2,000 — less any amount paid for those services by the trustee or by a receiver — by security on the bankrupt’s current assets on the date of the bankruptcy.
Marginal note:Commissions
(2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for during the period referred to in that subsection, are deemed to have been earned in that period.
Marginal note:Security for disbursements
(3) The claim of a travelling salesperson who is owed money by a bankrupt for disbursements properly incurred in and about the bankrupt’s business during the period referred to in subsection (1) is secured, as of the date of the bankruptcy, to the extent of $1,000 — less any amount paid for those disbursements by the trustee or by a receiver — by security on the bankrupt’s current assets on that date.
Marginal note:Rank of security
(4) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s current assets — regardless of when that other claim, right, charge or security arose — except rights under sections 81.1 and 81.2 and amounts referred to in subsection 67(3) that have been deemed to be held in trust.
Marginal note:Liability of trustee
(5) If the trustee disposes of current assets covered by the security, the trustee is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker in respect of the amounts paid to that person by the trustee.
Marginal note:Claims of officers and directors
(6) No officer or director of the bankrupt is entitled to have a claim secured under this section.
Marginal note:Non-arm’s length
(7) A person who, in respect of a transaction, was not dealing at arm’s length with the bankrupt is not entitled to have a claim arising from that transaction secured by this section unless, in the opinion of the trustee, having regard to the circumstances — including the remuneration for, the terms and conditions of and the duration, nature and importance of the services rendered — it is reasonable to conclude that they would have entered into a substantially similar transaction if they had been dealing with each other at arm’s length.
Marginal note:Proof by delivery
(8) A claim referred to in this section is proved by delivering to the trustee a proof of claim in the prescribed form.
Marginal note:Definitions
(9) The following definitions apply in this section.
“compensation”
« rémunération »
“compensation” includes vacation pay but does not include termination or severance pay.
“receiver”
« séquestre »
“receiver” means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1).
Marginal note:Security for unpaid wages, etc. — receivership
81.4 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a person who is subject to a receivership for services rendered during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $2,000 — less any amount paid for those services by a receiver or trustee — by security on the person’s current assets that are in the possession or under the control of the receiver.
Marginal note:Commissions
(2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for during the six-month period referred to in that subsection, are deemed to have been earned in those six months.
Marginal note:Security for disbursements
(3) The claim of a travelling salesperson who is owed money by a person who is subject to a receivership for disbursements properly incurred in and about the person’s business during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $1,000 — less any amount paid for those disbursements by a receiver or trustee — by security on the person’s current assets that are in the possession or under the control of the receiver.
Marginal note:Rank of security
(4) A security under this section ranks above every other claim, right, charge or security against the person’s current assets — regardless of when that other claim, right, charge or security arose — except rights under sections 81.1 and 81.2.
Marginal note:Liability of receiver
(5) If the receiver takes possession or in any way disposes of current assets covered by the security, the receiver is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker in respect of the amounts paid to that person by the receiver.
Marginal note:Claims of officers and directors
(6) No officer or director of the person who is subject to a receivership is entitled to have a claim secured under this section.
Marginal note:Non-arm’s length
(7) A person who, in respect of a transaction, was not dealing at arm’s length with a person who is subject to a receivership is not entitled to have a claim arising from that transaction secured by this section unless, in the opinion of the receiver, having regard to the circumstances — including the remuneration for, the terms and conditions of and the duration, nature and importance of the services rendered — it is reasonable to conclude that they would have entered into a substantially similar transaction if they had been dealing with each other at arm’s length.
Marginal note:Proof by delivery
(8) A claim referred to in this section is proved by delivering to the receiver a proof of claim in the prescribed form.
Marginal note:Definitions
(9) The following definitions apply in this section.
“compensation”
« rémunération »
“compensation” includes vacation pay but does not include termination or severance pay.
“person who is subject to a receivership”
« personne faisant l’objet d’une mise sous séquestre »
“person who is subject to a receivership” means a person any of whose property is in the possession or under the control of a receiver.
“receiver”
« séquestre »
“receiver” means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1).
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