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
53. (1) The portion of subsection 172.1(1) of the French version of the Act before paragraph (a), as enacted by section 105 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Exception — failli ayant une dette fiscale
172.1 (1) Dans le cas d’un failli qui a une dette fiscale impayée d’un montant de deux cent mille dollars ou plus représentant soixante-quinze pour cent ou plus de la totalité des réclamations non garanties prouvées, l’audition de la demande de libération ne peut se tenir avant l’expiration :
(2) Subsection 172.1(8) of the Act, as enacted by section 105 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Meaning of “personal income tax debt”
(8) For the purpose of this section, “personal income tax debt” means the amount payable, within the meaning of subsection 223(1) of the Income Tax Act without reference to paragraphs (b) to (c), by an individual and the amount payable by an individual under any provincial legislation that imposes a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, including, for greater certainty, the amount of any interest, penalties or fines imposed under the Income Tax Act or the provincial legislation. It does not include an amount payable by the individual if the individual is or was a director of a corporation and the amount relates to an obligation of the corporation for which the director is liable in their capacity as director.
54. Paragraph 178(1)(e) of the Act, as enacted by subsection 107(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
(e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim;
Marginal note:1997, c. 12, s. 114
55. Section 216 of the Act is repealed.
56. Subsection 219(1) of the Act is replaced by the following:
Marginal note:Application for consolidation order
219. (1) A debtor who resides in a province in respect of which this Part applies may apply to the clerk of the court having jurisdiction where they reside for a consolidation order.
Marginal note:2002, c. 7, s. 85
57. Section 242 of the Act is replaced by the following:
Marginal note:Application of this Part
242. (1) The Governor in Council shall, at the request of the lieutenant governor in council of a province, declare, by order, that this Part applies or ceases to apply, as the case may be, in respect of the province.
Marginal note:Automatic application
(2) Subject to an order being made under subsection (1) declaring that this Part ceases to apply in respect of a province, if this Part is in force in the province immediately before that subsection comes into force, this Part applies in respect of the province.
58. (1) Subsections 243(1) and (2) of the Act, as enacted by subsection 115(1) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
Marginal note:Court may appoint receiver
243. (1) Subject to subsection (1.1), on application by a secured creditor, a court may appoint a receiver to do any or all of the following if it considers it to be just or convenient to do so:
(a) take possession of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt;
(b) exercise any control that the court considers advisable over that property and over the insolvent person’s or bankrupt’s business; or
(c) take any other action that the court considers advisable.
Marginal note:Restriction on appointment of receiver
(1.1) In the case of an insolvent person in respect of whose property a notice is to be sent under subsection 244(1), the court may not appoint a receiver under subsection (1) before the expiry of 10 days after the day on which the secured creditor sends the notice unless
(a) the insolvent person consents to an earlier enforcement under subsection 244(2); or
(b) the court considers it appropriate to appoint a receiver before then.
Definition of “receiver”
(2) Subject to subsections (3) and (4), in this Part, “receiver” means a person who
(a) is appointed under subsection (1); or
(b) is appointed to take or takes possession or control — of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt — under
(i) an agreement under which property becomes subject to a security (in this Part referred to as a “security agreement”), or
(ii) a court order made under another Act of Parliament, or an Act of a legislature of a province, that provides for or authorizes the appointment of a receiver or receiver-manager.
Marginal note:1992, c. 27, s. 89(1)
(2) Subsection 243(3) of the Act is replaced by the following:
Definition of “receiver” — subsection 248(2)
(3) For the purposes of subsection 248(2), the definition “receiver” in subsection (2) is to be read without reference to paragraph (a) or subparagraph (b)(ii).
(3) Subsection 243(4) of the Act, as enacted by subsection 115(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Trustee to be appointed
(4) Only a trustee may be appointed under subsection (1) or under an agreement or order referred to in paragraph (2)(b).
Marginal note:Place of filing
(5) The application is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor.
Marginal note:Orders respecting fees and disbursements
(6) If a receiver is appointed under subsection (1), the court may make any order respecting the payment of fees and disbursements of the receiver that it considers proper, including one that gives the receiver a charge, ranking ahead of any or all of the secured creditors, over all or part of the property of the insolvent person or bankrupt in respect of the receiver’s claim for fees or disbursements, but the court may not make the order unless it is satisfied that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations.
Meaning of “disbursements”
(7) In subsection (6), “disbursements” does not include payments made in the operation of a business of the insolvent person or bankrupt.
59. Section 275 of the Act, as enacted by section 122 of chapter 47 of the Statutes of Canada, 2005, is amended by adding the following after subsection (2):
Marginal note:Forms of cooperation
(3) For the purpose of this section, cooperation may be provided by any appropriate means, including
(a) the appointment of a person to act at the direction of the court;
(b) the communication of information by any means considered appropriate by the court;
(c) the coordination of the administration and supervision of the debtor’s assets and affairs;
(d) the approval or implementation by courts of agreements concerning the coordination of proceedings; and
(e) the coordination of concurrent proceedings regarding the same debtor.
60. Subsection 284(2) of the Act, as enacted by section 122 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Public policy exception
(2) Nothing in this Part prevents the court from refusing to do something that would be contrary to public policy.
R.S., c. C-36COMPANIES’ CREDITORS ARRANGEMENT ACT
61. (1) The definition “shareholder” in subsection 2(1) of the Companies’ Creditors Arrangement Act, as enacted by subsection 124(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
“shareholder”
« actionnaire »
“shareholder” includes a member of a company — and, in the case of an income trust, a holder of a unit in an income trust — to which this Act applies;
(2) The definitions “director” and “income trust” in subsection 2(1) of the Act, as enacted by subsection 124(3) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
“director”
« administrateur »
“director” means, in the case of a company other than an income trust, a person occupying the position of director by whatever name called and, in the case of an income trust, a person occupying the position of trustee by whatever named called;
“income trust”
« fiducie de revenu »
“income trust” means a trust that has assets in Canada if
(a) its units are listed on a prescribed stock exchange on the day on which proceedings commence under this Act, or
(b) the majority of its units are held by a trust whose units are listed on a prescribed stock exchange on the day on which proceedings commence under this Act;
(3) The definition agent négociateur in subsection 2(1) of the French version of the Act, as enacted by subsection 124(3) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
« agent négociateur »
“bargaining agent”
agent négociateur Syndicat ayant conclu une convention collective pour le compte des employés d’une compagnie.
(4) Subsection 2(2) of the Act, as enacted by subsection 124(5) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Meaning of “related” and “dealing at arm’s length”
(2) For the purpose of this Act, section 4 of the Bankruptcy and Insolvency Act applies for the purpose of determining whether a person is related to or dealing at arm’s length with a debtor company.
62. Paragraph 11.02(3)(b) of the French version of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
b) dans le cas de l’ordonnance visée au paragraphe (2), le demandeur le convainc en outre qu’il a agi et continue d’agir de bonne foi et avec la diligence voulue.
63. (1) Subsection 11.05(1) of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Eligible financial contracts
11.05 (1) No order may be made under this Act that has the effect of staying or restraining the exercise of a right to terminate or amend an eligible financial contract or claim an accelerated payment or a forfeiture of the term under it.
(2) The definition “eligible financial contract” in subsection 11.05(3) of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
“eligible financial contract”
« contrat financier admissible »
“eligible financial contract” means an agreement of a prescribed kind.
64. Section 11.06 of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following:
Marginal note:Member of the Canadian Payments Association
11.06 No order may be made under this Act that has the effect of preventing a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for a company in accordance with the Canadian Payments Act or the by-laws or rules of that Association.
65. Sections 11.1 to 11.4 of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following:
Meaning of “regulatory body”
11.1 (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 — order under section 11.02
(2) Subject to subsection (3), no order made under section 11.02 affects a regulatory body’s investigation in respect of the debtor company or an action, suit or proceeding that is taken in respect of the company 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 company 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 compromise or arrangement could not be made in respect of the company if that subsection were to apply; and
(b) it is not contrary to the public interest that the regulatory body be affected by the order made under section 11.02.
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 company 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.
Marginal note:Interim financing
11.2 (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, a court may make an order declaring that all or part of the company’s property is subject to a security or charge — in an amount that the court considers appropriate — in favour of a person specified in the order who agrees to lend to the company an amount approved by the court as being required by the company, having regard to its cash-flow statement. The security or charge may not secure an obligation that exists before the order is made.
Marginal note:Priority — secured creditors
(2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company.
Marginal note:Priority — other orders
(3) The court may order that the security or charge rank in priority over any security or charge arising from a previous order made under subsection (1) only with the consent of the person in whose favour the previous order was made.
Marginal note:Factors to be considered
(4) In deciding whether to make an order, the court is to consider, among other things,
(a) the period during which the company is expected to be subject to proceedings under this Act;
(b) how the company’s business and financial affairs are to be managed during the proceedings;
(c) whether the company’s management has the confidence of its major creditors;
(d) whether the loan would enhance the prospects of a viable compromise or arrangement being made in respect of the company;
(e) the nature and value of the company’s property;
(f) whether any creditor would be materially prejudiced as a result of the security or charge; and
(g) the monitor’s report referred to in paragraph 23(1)(b), if any.
Marginal note:Assignment of agreements
11.3 (1) On application by a debtor company and on notice to every party to an agreement and the monitor, the court may make an order assigning the rights and obligations of the company under the agreement to any person who is specified by the court and agrees to the assignment.
Marginal note:Exceptions
(2) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under
(a) an agreement entered into on or after the day on which proceedings commence under this Act;
(b) an eligible financial contract within the meaning of subsection 11.05(3); or
(c) a collective agreement.
Marginal note:Factors to be considered
(3) In deciding whether to make the order, the court is to consider, among other things,
(a) whether the monitor approved the proposed assignment;
(b) whether the person to whom the rights and obligations are to be assigned would be able to perform the obligations; and
(c) whether it would be appropriate to assign the rights and obligations to that person.
Marginal note:Restriction
(4) The court may not make the order unless it is satisfied that all monetary defaults in relation to the agreement — other than those arising by reason only of the company’s insolvency, the commencement of proceedings under this Act or the company’s failure to perform a non-monetary obligation — will be remedied on or before the day fixed by the court.
Marginal note:Copy of order
(5) The applicant is to send a copy of the order to every party to the agreement.
Marginal note:Critical supplier
11.4 (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring a person to be a critical supplier to the company if the court is satisfied that the person is a supplier of goods or services to the company and that the goods or services that are supplied are critical to the company’s continued operation.
Marginal note:Obligation to supply
(2) If the court declares a person to be a critical supplier, the court may make an order requiring the person to supply any goods or services specified by the court to the company on any terms and conditions that are consistent with the supply relationship or that the court considers appropriate.
Marginal note:Security or charge in favour of critical supplier
(3) If the court makes an order under subsection (2), the court shall, in the order, declare that all or part of the property of the company is subject to a security or charge in favour of the person declared to be a critical supplier, in an amount equal to the value of the goods or services supplied under the terms of the order.
Marginal note:Priority
(4) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company.
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