Bill C-55

1st Session, 38th Parliament,

53-54 Elizabeth II, 2004-2005

house of commons of canada

BILL C-55

An Act to establish the Wage Earner Protection Program Act, to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act and to make consequential amendments to other Acts

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

WAGE EARNER PROTECTION PROGRAM ACT

1. The Wage Earner Protection Program Act is enacted as follows:

An Act to establish a program for making payments to individuals in respect of wages owed to them by employers who are bankrupt or subject to a receivership

SHORT TITLE

1. This Act may be cited as the Wage Earner Protection Program Act.

INTERPRETATION

2. (1) In this Act, “wages” includes salaries, commissions, compensation for services rendered, vacation pay and any other amounts prescribed by regulation but does not include severance or termination pay.

(2) For the purposes of this Act, an employer is subject to a receivership when any property of the employer is under the possession or control of a receiver.

(3) In this Act, “receiver” means a receiver within the meaning of subsection 243(2) of the Bankruptcy and Insolvency Act.

(4) Unless otherwise provided, words and expressions used in this Act have the same meaning as in the Bankruptcy and Insolvency Act.

DESIGNATION OF MINISTER

3. The Governor in Council may designate a member of the Queen’s Privy Council for Canada to be the Minister for the purposes of this Act.

PROGRAM ESTABLISHED

4. The Wage Earner Protection Program is established to make payments to individuals in respect of wages owed to them by employers who are bankrupt or subject to a receivership.

ELIGIBILITY FOR PAYMENTS

5. An individual is eligible to receive a payment if

(a) the individual’s employment with an employer was terminated, within the meaning of the regulations;

(b) the former employer is bankrupt or subject to a receivership;

(c) the individual is owed wages by the former employer; and

(d) the wages that are owed were earned during the six months immediately before the date of the bankruptcy or the first day on which there was a receiver in relation to the former employer.

6. (1) An individual is ineligible to receive a payment if, at the date of his or her former employer’s bankruptcy, or the first day on which there was a receiver in relation to the former employer, the individual had been employed by the former employer for a period of three months or less or, in relation to any category of wage earners specified by the regulations, any shorter period specified in the regulations.

(2) An individual is ineligible to receive a payment in respect of any wages earned during a period in which the individual

(a) was an officer or a director of the former employer;

(b) had a controlling interest, within the meaning of the regulations, in the business of the former employer; or

(c) occupied a managerial position, within the meaning of the regulations, with the former employer.

AMOUNTS COVERED BY PROGRAM

7. (1) The amount that may be paid under this Act to an eligible individual is the amount of wages owing to the individual that were earned in the six months immediately before the date of bankruptcy or the first day on which there was a receiver in relation to the former employer less any deductions applicable to the payment under a federal or provincial law.

(2) The maximum amount that may be paid under this Act to an eligible individual in respect of any particular bankruptcy or receivership is the greater of

(a) $3,000, and

(b) an amount equal to four times the maximum weekly insurable earnings under the Employment Insurance Act;

less any deductions applicable under a federal or provincial law.

(3) Unless otherwise prescribed by regulation, payments made under this Act to an individual are to be allocated to vacation pay only after payments are first allocated to all other components of wages owing to the individual.

APPLICATION FOR PAYMENT

8. To receive a payment, an individual must apply to the Minister in the form and manner, and within the period, provided for in the regulations.

9. If the Minister determines that the applicant is eligible for a payment, the Minister must approve the making of the payment.

10. The Minister must inform the applicant of the Minister’s determination.

REVIEW AND APPEAL

11. An applicant who is the subject of a determination may, in accordance with the regulations, request a review of the determination.

12. After considering the request for a review, the Minister may confirm, vary or rescind the determination.

13. Subject to the right of appeal under section 14, the review decision is final and may not be questioned or reviewed in any court.

14. An applicant may appeal a review decision to an adjudicator only on a question of law or a question of jurisdiction. An appeal must be made in accordance with the regulations.

15. An appeal is to be heard by an adjudicator appointed by the Minister.

16. An appeal is an appeal on the record.

17. After considering an appeal, the adjudicator may confirm, vary or rescind the review decision.

18. The adjudicator must send a copy of his or her decision, and the reasons for it, to each party to the appeal.

19. The adjudicator’s decision is final and may not be questioned or reviewed in any court.

20. No order shall be made, process entered or proceeding taken in any court — whether by way of injunction, certiorari, prohibition, quo warranto or otherwise — to question, review, prohibit or restrain an adjudicator in any proceedings of the adjudicator.

ADMINISTRATION

Duties of Trustees and Receivers

21. (1) For the purposes of this Act, every trustee and receiver shall

(a) identify each individual who is owed wages by a bankrupt or insolvent employer, as the case may be, that were earned during the period of six months immediately before the date of the bankruptcy or the first day on which there was a receiver in relation to the employer;

(b) determine the amount of wages owing to each individual in respect of that six-month period;

(c) inform each individual of the existence of the program established by section 4 and the conditions under which payments may be made under this Act;

(d) provide the Minister and each individual, in accordance with the regulations, with information prescribed by the regulations in relation to the individual and the amount of wages owing to the individual in respect of the six-month period; and

(e) inform the Minister

(i) in the case of a trustee, when he or she is discharged, and

(ii) in the case of a receiver, when the receiver has completed his or her duties as receiver.

(2) A trustee or receiver must comply with any directions of the Minister relating to the administration of this Act.

22. (1) A trustee or receiver who performs duties for the purposes of this Act may charge reasonable fees and disbursements for the performance of those duties.

(2) The fees and disbursements are to be paid out of the property or estate of the bankrupt or insolvent employer.

Powers of Minister

23. (1) The Minister may give directions to trustees and receivers in respect of the perform­ance of their duties under this Act.

(2) A direction given by the Minister is not a statutory instrument within the meaning of the Statutory Instruments Act.

24. (1) For the purposes of the administration of this Act, the Minister may

(a) summon any person before him or her and require the person to give evidence, orally or in writing, and on oath or, if the person is entitled to affirm in civil matters, on solemn affirmation;

(b) require any person to provide the Minister with any information or document that the Minister considers necessary; and

(c) require any person to provide an affidavit or a statutory declaration attesting to the truth of any information provided by the person.

(2) Any person, if designated by the Minister for the purpose, may administer oaths and take and receive affidavits, statutory declarations and solemn affirmations for the purpose of or incidental to the administration of this Act. Every person so designated has, with respect to any such oath, affidavit, declaration or affirmation, all the powers of a commissioner for administering oaths or taking affidavits.

(3) The Minister may, for the purposes of administering this Act, accept any oath admin­istered or any affidavit, statutory declaration or solemn affirmation taken or received by any person who has the powers of a commissioner for taking affidavits and who is an officer or employee of

(a) a department or other portion of the federal public administration specified in any of Schedules I, IV and V to the Financial Administration Act; or

(b) a department of the government of a province.

25. (1) A person designated by the Minister for the purpose may, at any reasonable time, enter any place in which he or she reasonably believes there is any information or document relevant to the administration of this Act and may, in that place,

(a) inspect any books, records, electronic data or other documents that he or she reasonably believes may contain information that is relevant to the administration of this Act;

(b) use or cause to be used any computer system to examine any data contained in or available to the computer system;

(c) reproduce or cause to be reproduced any record from the data in the form of a print-out or other intelligible output;

(d) take any document or other thing from the place for examination or, in the case of a document, for copying; and

(e) use or cause to be used any copying equipment to make copies of any documents.

(2) If any place referred to in subsection (1) is a dwelling-house, the designated person may not enter the dwelling-house without the consent of the occupant, except under the authority of a warrant issued under subsection (3).

(3) A judge may issue a warrant authorizing the designated person to enter a dwelling-house subject to the conditions specified in the warrant if, on ex parte application, the judge is satisfied by information on oath that

(a) there are reasonable grounds to believe that the dwelling-house is a place referred to in subsection (1);

(b) entry into the dwelling-house is necessary for any purpose related to the administration of this Act; and

(c) entry into the dwelling-house has been, or there are reasonable grounds to believe that entry will be, refused.

(4) If the judge is not satisfied that entry into the dwelling-house is necessary for any purpose related to the administration of this Act, the judge may, to the extent that access was or may be expected to be refused and that information or documents are or may be expected to be kept in the dwelling-house,

(a) order the occupant of the dwelling-house to provide the Minister, or a person designated by the Minister for the purpose, with reasonable access to any information or document that is or should be kept in the dwelling-house; and

(b) make any other order that is appropriate in the circumstances to carry out the purposes of this Act.

26. The owner or person in charge of a place that is entered by the designated person and every person found there must

(a) give the designated person all reasonable assistance to enable him or her to exercise his or her powers and perform his or her duties; and

(b) provide the designated person with any information relevant to the administration of this Act that he or she requires.

27. Despite section 127 and subsection 139(5) of the Employment Insurance Act, personal information relating to an applicant that is collected or obtained by the Canada Employment Insurance Commission must, if requested by the Minister, be made available to the Minister to determine the applicant’s eli-gibility to receive a payment under this Act.

28. Personal information that has been collected or obtained by the Minister in the administration of this Act may be disclosed by the Minister to any person or body, to the extent that the disclosure is necessary in order for the Minister to obtain information required for the administration of this Act.

29. No person shall knowingly use, communicate or allow to be communicated the Social Insurance Number of an individual that was obtained for a purpose related to an application for a payment under this Act except for the purpose of the administration or enforcement of this Act or the Income Tax Act.

30. The Minister may delegate to any person the exercise of any power or the performance of any duty or function that may be exercised or performed by the Minister under this Act.

31. (1) Subject to subsections (2) to (4), the Minister may, on his or her initiative, conduct an audit of any application for payment under this Act.

(2) An audit of an application in respect of which a payment was made may be conducted at any time within three years after the day on which the payment was made.

(3) If the Minister has reasonable grounds to believe that a payment was made on the basis of any false or misleading information, an audit of the application in respect of which the payment was made may be conducted at any time within six years after the payment was made.

(4) An audit of an application in respect of which no payment was made may be conducted at any time within three years after the day on which the applicant was sent a notice informing the applicant that he or she was not eligible to receive a payment.

32. (1) If the Minister determines that an individual who received a payment was not eligible to receive the payment or has received a payment in an amount greater than the amount the individual was eligible to receive, the Minister shall send to the individual a notice

(a) informing the individual of the determination; and

(b) specifying the amount that the individual was not eligible to receive.

(2) The amount specified in the notice may be recovered from the individual as a debt due to Her Majesty in right of Canada.

(3) The amount of any debt referred to in subsection (2) that remains unpaid 30 days after the notice referred to in that subsection is sent may be certified by the Minister, and registration of the certificate in the Federal Court has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs.

33. If the Minister is of the opinion that a person is or is about to become liable to make a payment to a person who is liable to Her Majesty under section 32, the Minister may, by written notice, order the first person to pay to the Receiver General, on account of the second person’s liability, all or part of the money otherwise payable to the second person.

34. If the Minister determines that an individual has not received a payment that he or she is eligible to receive, or has not received the full amount that he or she is eligible to receive, the Minister shall approve a payment to the individual in an amount equal to the amount that the individual did not receive.

Financial Provisions

35. There may be paid out of the Consolidated Revenue Fund all payments authorized to be made under this Act.

36. (1) If a payment is made under this Act to an individual in respect of unpaid wages, Her Majesty in right of Canada is, to the extent of the amount of the payment, subrogated to any rights the individual may have in respect of those unpaid wages against

(a) the bankrupt or insolvent employer; and

(b) if the bankrupt or insolvent employer is a corporation, a director of the corporation.

(2) For the purposes of subsection (1), Her Majesty in right of Canada may maintain an action against a bankrupt or insolvent employer, or a director, either in the name of the individual referred to in that subsection or in the name of Her Majesty in right of Canada.

37. An amount that is payable under this Act is not capable of being assigned, charged, attached, anticipated or given as security and any transaction appearing to do so is void or, in the Province of Quebec, null.

Offences and Penalties

38. (1) Every person commits an offence who

(a) makes a false or deceptive entry, or omits to enter a material particular, in any record or book of account that contains information that supports an application under this Act;

(b) in relation to an application under this Act, makes a representation that the person knows to be false or misleading;

(c) in relation to an application under this Act, makes a declaration that the person knows is false or misleading because of the non-disclosure of facts;

(d) being required under this Act to provide information, provides information or makes a representation that the person knows to be false or misleading;

(e) obtains a payment under this Act by false pretence;

(f) being the payee of any cheque issued as a payment under this Act, knowingly negotiates or attempts to negotiate it knowing that the person is not entitled to the payment or any part of the payment; or

(g) participates in, assents to or acquiesces in an act or omission mentioned in any of paragraphs (a) to (f).

(2) Every person who fails to comply with any of the requirements of subsection 21(1) commits an offence.

(3) A prosecution for an offence under subsection (1) or (2) may be commenced at any time within six years after the time when the subject-matter of the prosecution arose.

39. (1) Every person commits an offence who delays or obstructs a person in the exercise of his or her powers or the performance of his or her duties under this Act.

(2) A prosecution for an offence under subsection (1) may be commenced at any time within two years after the time when the subject-matter of the prosecution arose.

40. Every person who is guilty of an offence under section 38 or 39 is liable on summary conviction to a fine of not more than $5,000 or to imprisonment for a term of not more than six months, or to both.

Regulations

41. (1) The Governor in Council may make regulations generally for carrying out the purposes of this Act, including regulations

(a) prescribing any amounts to be wages for the purposes of this Act;

(b) defining what constitutes a termination of employment for the purposes of paragraph 5(a);

(c) specifying categories of wage earners and periods of time for the purposes of subsection 6(1);

(d) defining the expressions “controlling interest” and “managerial position” for the purposes of subsection 6(2);

(e) respecting the period within which, and the manner and form in which, applications for payments are to be made;

(f) respecting the period within which and the manner in which payments are to be made;

(g) respecting the period within which, and the manner and form in which, a review of a determination may be requested or an appeal may be made from a review decision;

(h) prescribing the information that is to be provided by trustees and receivers to the Minister and to individuals for the purposes of paragraph 21(1)(d); and

(i) respecting the period within which, and the manner and form in which, trustees and receivers are to provide the information referred to in paragraph (h).

(2) The Governor in Council may make regulations respecting the allocation of payments under this Act to the different components of wages for the purposes of subsection 7(3).

REVIEW OF ACT

42. Within five years after the day on which this section comes into force, the Minister must cause a review of this Act and its administration and operation to be conducted, and cause a report on the review to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the review is completed.

AMENDMENTS TO THE BANKRUPTCY AND INSOLVENCY ACT

2. (1) The definition “settlement” in section 2 of the Bankruptcy and Insolvency Act is repealed.

(2) The definition “localité d’un débiteur” in section 2 of the French version of the Act is repealed.

(3) The definitions “court”, “creditor”, and “person” in section 2 of the Act are replaced by the following:

“court”, except in paragraphs 178(1)(a) and (a.1) and sections 204.1 to 204.3 , means a court referred to in subsections 183(1) and (1.1) or a judge of that court, and includes a registrar when exercising the powers of the court conferred on a registrar under this Act;

“creditor” means a person having a claim provable as a claim under this Act;

“person” includes a partnership, an unincorporated association, a corporation, a cooperative society, an organization or an income trust, the successors of a partnership, of an association, of a corporation, of a society, of an organization or of an income trust, and the heirs, executors, liquidators of the succession, administrators or other legal representative of a person;

(4) The definition “locality of a debtor” in section 2 of the English version of the Act is replaced by the following:

“locality of a debtor” means the principal place

(a) where the debtor has carried on business during the year immediately preceding the date of the initial bankruptcy event,

(b) where the debtor has resided during the year immediately preceding the date of the initial bankruptcy event, or

(c) in cases not coming within paragraph (a) or (b), where the greater portion of the property of the debtor is situated;

(5) Section 2 of the Act is amended by adding the following in alphabetical order:

“bargaining agent” means any trade union that has entered into a collective agreement on behalf of the employees of a person;

“collective agreement”, in relation to an insolvent person, means a collective agreement within the meaning of the jurisdiction governing collective bargaining between the insolvent person and a bargaining agent;

“current assets” means unrestricted cash, or any other asset that, in the normal course of operations, is expected to be converted into cash or consumed in the production of income within one year or within the normal operating cycle when it is longer than a year;

“date of the bankruptcy”, in respect of a person, means the date of

(a) the granting of a bankruptcy order against the person,

(b) the filing or making of an assignment by or in respect of the person, or

(c) the event that causes an assignment by the person to be deemed;

“director” includes any individual, however designated, acting in any capacity that is similar to that of a director of a corporation;

“income trust” means a trust

(a) that has assets in Canada, and

(b) the units of which are traded on a prescribed stock exchange;

“time of the bankruptcy”, in respect of a person, means the time of

(a) the granting of a bankruptcy order against the person,

(b) the filing of an assignment by or in respect of the person, or

(c) the event that causes an assignment by the person to be deemed;

“transfer at undervalue” means a transaction in which the consideration received by a person is conspicuously less than the fair market value of the property or services sold or disposed of by the person in the transaction;

(6) Section 2 of the French version of the Act is amended by adding the following in alphabetical order:

3. Section 2.1 of the Act is replaced by the following:

2.1 A change in the designation of a beneficiary in an insurance contract is deemed to be a disposition of property for the purpose of this Act.

4. Section 3 of the Act is repealed.

5. (1) Subsection 4(1) of the Act is amended by adding the following in alphabetical order:

“entity” means a person other than an individ-ual;

(2) Paragraphs 4(2)(b) and (c) of the Act are replaced by the following:

(b) an entity and

(i) a person who controls the entity, if it is controlled by one person,

(ii) a person who is a member of a related group that controls the entity, or

(iii) any person connected in the manner set out in paragraph (a) to a person described in subparagraph (i) or (ii); or

(c) two entities

(i) both controlled by the same person or group of persons,

(ii) each of which is controlled by one person and the person who controls one of the entities is related to the person who controls the other entity,

(iii) one of which is controlled by one person and that person is related to any member of a related group that controls the other entity,

(iv) one of which is controlled by one person and that person is related to each member of an unrelated group that controls the other entity,

(v) one of which is controlled by a related group a member of which is related to each member of an unrelated group that controls the other entity, or

(vi) one of which is controlled by an unrelated group each member of which is related to at least one member of an unrelated group that controls the other entity.

(3) Paragraphs 4(3)(a) to (d) of the Act are replaced by the following:

(a) if two entities are related to the same entity within the meaning of subsection (2), they are deemed to be related to each other;

(b) if a related group is in a position to control an entity, it is deemed to be a related group that controls the entity whether or not it is part of a larger group by whom the entity is in fact controlled;

(c) a person who has a right under a contract, in equity or otherwise, either immediately or in the future and either absolutely or contingently, to, or to acquire, ownership interests, however designated, in an entity, or to control the voting rights in an entity, is, except when the contract provides that the right is not exercisable until the death of an individual designated in the contract, deemed to have the same position in relation to the control of the entity as if the person owned the ownership interests;

(d) if a person has ownership interests in two or more entities, the person is, as holder of any ownership interest in one of the entities, deemed to be related to himself or herself as holder of any ownership interest in each of the other entities;

(4) Section 4 of the Act is amended by adding the following after subsection (3):

(4) It is a question of fact whether persons not related to one another were at a particular time dealing with each other at arm’s length.

(5) Persons related to each other are deemed not to deal with each other at arm’s length while so related.

6. (1) Subsection 5(1) of the Act is replaced by the following:

5. (1) The Governor in Council shall appoint a Superintendent of Bankruptcy to hold office during good behaviour for a term of not more than five years, but the Superintendent may be removed from office by the Governor in Council for cause. The Superintendent’s term may be renewed for one or more further terms.

(1.1) The Superintendent shall be paid the salary that the Governor in Council may fix.

(2) Subsection 5(3) of the Act is amended by adding the following after paragraph (a):

(b) monitor the conditions that led to a trustee being issued a licence to determine whether those conditions continue to exist after the licence has been issued and take the appropriate action if he or she determines that the conditions no longer exist;

(3) Paragraph 5(3)(e) of the Act is replaced by the following:

(e) from time to time, make or cause to be made any inquiry or investigation of estates or other matters to which this Act applies, including the conduct of a trustee or a trustee acting as a receiver, within the meaning of subsection 243(2), or as an interim receiver, that the Superintendent considers appropriate, and for the purpose of the inquiry or investigation the Superintendent or any person appointed by the Superintendent for the purpose shall have access to and the right to examine and make copies of all books, records, data, including data in electronic form, documents and papers, that are relevant to an inquiry or investigation pertaining or relating to any estate or other matter to which this Act applies;

(4) Subsection 5(4) of the Act is amended by striking out the word “and” at the end of paragraph (d) and by adding the following after paragraph (d):

(d.1) issue directives respecting the rules governing hearings for the purposes of section 14.02; and

7. Subsection 6(1) of the English version of the Act is replaced by the following:

6. (1) The Superintendent may engage any persons that the Superintendent considers advisable to conduct any inquiry or investigation or to take any other necessary action outside of the office of the Superintendent, and the cost and expenses of those persons shall, when certified by the Superintendent, be payable out of the appropriation for the office of the Superintendent.

8. (1) Subsection 10(1) of the Act is replaced by the following:

10. (1) If, on information supplied by an official receiver, trustee or other person, the Superintendent suspects, on reasonable grounds, that a person has, in connection with any estate or matter to which this Act applies, committed an offence under this or any other Act of Parliament, the Superintendent may, if it appears to the Superintendent that the alleged offence might not otherwise be investigated, make or cause to be made any inquiries or investigations that the Superintendent considers appropriate.

(2) Subsection 10(3) of the Act is replaced by the following:

(3) If, on the application of the Superintendent or the Superintendent’s authorized representative, a subpoena has been issued by the court, the Superintendent may, for the purpose of an inquiry or investigation under subsection (1), examine or cause to be examined under oath before the registrar of the court or other authorized person, the trustee, the debtor, any person who the Superintendent suspects, on reasonable grounds, has knowledge of the affairs of the debtor, or any person who is or has been an agent or a mandatary, or a clerk, a servant, an officer, a director or an employee of the debtor or the trustee, with respect to the conduct, dealings and transactions of the debtor, the causes of the bankruptcy or insolvency of the debtor, the disposition of the debtor’s property or the administration of the estate, and may order any person liable to be so examined to produce any books, records, data, including data in electronic form, documents or papers in the person’s possession or under the person’s control.

9. Subsection 13(3) of the Act is replaced by the following:

(3) The Superintendent may refuse to issue a licence to an applicant who is insolvent or has been found guilty of an indictable offence that, in the Superintendent’s opinion, is of a character that would impair the trustee’s capacity to perform his or her fiduciary duties.

10. Paragraph 13.2(5)(a) of the Act is replaced by the following:

(a) if the trustee has been found guilty of an indictable offence that, in the Superintend­ent’s opinion, is of a character that would impair the trustee’s capacity to perform his or her fiduciary duties;

11. (1) Section 13.3 of the Act is amended by adding the following after subsection (1):

(1.1) A trustee who applies for the permission of the court for the purposes of subsection (1) shall without delay send a copy of the application to the Superintendent.

(2) Paragraph 13.3(2)(b) of the Act is replaced by the following:

(b) the receiver, within the meaning of subsection 243(2), or the liquidator of the property of any person related to the debtor,

12. Subsection 13.4(1) of the Act is replaced by the following:

13.4 (1) No trustee shall, while acting as the trustee of an estate, act for or assist a secured creditor of the estate to assert any claim against the estate or to realize or otherwise deal with the security that the secured creditor holds, unless the trustee has obtained a written opinion of legal counsel who has not acted for the secured creditor in the previous two years and is not related to the trustee that the security is valid and enforceable as against the estate.

13. Sections 13.5 and 13.6 of the Act are replaced by the following:

13.5 A trustee shall comply with the prescribed Code of Ethics.

13.6 A trustee shall not engage the services of a person

(a) whose trustee licence has been cancelled under paragraph 13.2(5)(a) or subsection 14.01(1); or

(b) who is the subject of a direction made by the Superintendent under paragraph 14.03(1)(d).

14. Subsection 14.01(1) of the Act is amended by striking out the word “and” at the end of paragraph (e), by adding the word “and” at the end of paragraph (f) and by adding the following after paragraph (f):

(g) require the trustee to do anything that the Superintendent considers appropriate and that the trustee has agreed to.

15. Subsection 14.02(1) of the Act is replaced by the following:

14.02 (1) Before deciding whether to exercise any of the powers referred to in subsection 14.01(1), the Superintendent shall send the trustee written notice of the powers that the Superintendent may exercise and the reasons why they may be exercised and afford the trustee a reasonable opportunity for a hearing.

(1.1) The Superintendent may, for the purpose of the hearing, issue a subpoena or other request or summons, requiring and commanding any person named in it

(a) to appear at the time and place mentioned in it;

(b) to testify to all matters within his or her knowledge relative to the subject-matter of the investigation into the conduct of the trustee; and

(c) to bring and produce any books, records, data, including data in electronic form, documents or papers in the person’s possession or under the person’s control relative to the subject-matter of the investigation.

(1.2) A person may be summoned from any part of Canada by virtue of a subpoena, request or summons issued under subsection (1.1).

(1.3) Any person summoned under subsection (1.1) is entitled to receive the like fees and allowances for so doing as if summoned to attend before the Federal Court.

16. (1) The portion of subsection 14.03(1) of the Act before paragraph (a) is replaced by the following:

14.03 (1) Subject to subsection (2), the Superintendent may, for the protection of an estate, the rights of the creditors or the debtor,

(2) Paragraph 14.03(2)(b) of the Act is replaced by the following:

(b) the Superintendent makes or causes to be made any inquiry or investigation under paragraph 5(3)(e);

(3) Paragraph 14.03(2)(f) of the Act is replaced by the following:

(f) a trustee has been found guilty of an indictable offence that, in the Superintend­ent’s opinion, is of a character that would impair the trustee’s capacity to perform the trustee’s fiduciary duties, or has failed to comply with any of the conditions or limitations to which the trustee’s licence is subject; or

17. Subsections 14.06(1.1) and (1.2) of the Act are replaced by the following:

(1.1) In subsections (1.2) to (6), a reference to a trustee means a trustee in a bankruptcy or proposal and includes

(a) an interim receiver;

(b) a receiver within the meaning of subsection 243(2); and

(c) any other person who has been lawfully appointed to take, or has lawfully taken, possession or control of any property of an insolvent person or a bankrupt that was acquired for, or is used in relation to, a business carried on by the insolvent person or bankrupt.

(1.2) Despite anything in any federal or provincial law, if a trustee carries on in that position the business of the debtor or continues the employment of the debtor’s employees, the trustee is not by reason of that fact personally liable in respect of any claim against the debtor or related to a requirement imposed on the debtor to pay an amount if the claim is in relation to a debt or liability, present or future, to which the debtor is subject on the day on which the trustee is appointed.

18. Subsection 19(3) of the Act is repealed.

19. Section 21 of the Act is replaced by the following:

21. The trustee shall verify the bankrupt’s statement of affairs referred to in paragraph 158(d).

20. (1) Subsection 25(1) of the Act is replaced by the following:

25. (1) When acting under the authority of this Act, a trustee shall, without delay, deposit in a bank all funds received for an estate in a separate trust account for each estate.

(2) Subsections 25(1.1) to (1.3) of the English version of the Act are replaced by the following:

(1.1) The trustee may deposit the funds in a deposit-taking institution, other than a bank as defined in section 2, only if deposits held by that institution are insured or guaranteed under a provincial or federal enactment that provides depositors with protection against the loss of funds on deposit with that institution.

(1.2) If the funds are situated in a country other than Canada, the trustee may, if authorized by the Superintendent, deposit them in a financial institution in that country that is similar to a bank.

(1.3) The trustee shall not withdraw any funds from the trust account of an estate without the permission in writing of the inspectors or, on application, the court, except for the payment of dividends and charges incidental to the administration of the estate.

(3) Section 25 of the Act is amended by adding the following after subsection (1.3):

(1.4) A trustee may, with the permission of the court, invest the funds in short-term securities of the Government of Canada or the government of a province held in trust for the estate.

(4) Subsection 25(3) of the Act is replaced by the following:

(3) The trustee shall not deposit any funds received by the trustee when acting under the authority of this Act in any banking account kept by the trustee for the trustee’s personal use.

21. The portion of subsection 28(1) of the Act before paragraph (a) is replaced by the following:

28. (1) The trustee shall, without delay after their receipt or preparation, send to the Superintendent, in the prescribed manner, true copies of the documents referred to in section 155 and a true copy of

22. Subsection 29(2) of the Act is repealed.

23. Section 30 of the Act is amended by adding the following after subsection (2):

(3) If no inspectors are appointed, the trustee may do all or any of the things referred to in subsection (1).

(4) The trustee may sell or otherwise dispose of any of the bankrupt’s property to a person who is related to the bankrupt only with the court’s authorization.

(5) For the purpose of subsection (4), in the case of a bankrupt other than an individual, a person who is related to the bankrupt includes a person who controls the bankrupt, a director or an officer of the bankrupt and a person who is related to a director or an officer of the bankrupt.

(6) In deciding whether to grant the authorization, the court must consider, among other things,

(a) whether the process leading to the proposed sale or disposal of the property was reasonable in the circumstances;

(b) the extent to which the creditors were consulted in respect of the proposed sale or disposal;

(c) the effects of the proposed sale or disposal on creditors and other interested parties;

(d) whether the consideration to be received for the property is reasonable and fair, taking into account the market value of the property;

(e) whether good faith efforts were made to sell or dispose of the property to persons who are not related to the bankrupt; and

(f) whether the consideration to be received is superior to the consideration that would be received under all other offers actually received in respect of the property.

24. Subsections 31(1) and (2) of the Act are replaced by the following:

31. (1) With the permission of the court, an interim receiver, a receiver within the meaning of subsection 243(2) or a trustee may make necessary or advisable advances, incur obligations, borrow money and give security on the debtor’s property in any amount, on any terms and on any property that may be authorized by the court and those advances, obligations and money borrowed must be repaid out of the debtor’s property in priority to the creditors’ claims.

(2) For the purpose of giving security under section 427 of the Bank Act, the interim receiver, receiver or trustee, when carrying on the business of the bankrupt, is deemed to be a person engaged in the class of business previously carried on by the bankrupt.

25. Section 33 of the Act is replaced by the following:

33. The court may make an order providing for the sale of any or all of the assets of the estate of the bankrupt, either by tender, private sale or public auction, setting out the terms and conditions of the sale and directing that the proceeds from the sale are to be used for the purpose of reimbursing the trustee in respect of any costs that may be owing to the trustee or of any moneys the trustee may have advanced as disbursements for the benefit of the estate.

26. Section 34 of the Act is amended by adding the following after subsection (2):

(3) The trustee must send notice to the Superintendent’s division office of the day and time when any application for directions made under subsection (1) is to be heard and of the day and time when the trustee intends to report to the court as required by the Superintendent under subsection (2).

27. Subsection 35(3) of the Act is replaced by the following:

(3) If a bankrupt is an individual, a notice referred to in subsection (1) is operative only during the three-month period immediately after the date of the bankruptcy unless the court, on application, extends that period on any terms that it considers fit.

28. Subsection 36(1) of the Act is replaced by the following:

36. (1) On the appointment of a substituted trustee, the former trustee shall without delay pass his or her accounts before the court and deliver to the substituted trustee all the property of the estate, together with all books, records and documents of the bankrupt and of the administration of the estate, as well as a statement of receipts and disbursements that contains a complete account of all moneys received by the trustee out of the property of the bankrupt or otherwise, the amount of interest received by the trustee, all moneys disbursed and expenses incurred and the remuneration claimed by the trustee, together with full particulars, description and value of all the bankrupt’s property that has not been sold or realized, setting out the reason why the property has not been sold or realized and the disposition made of the property.

29. Subsection 40(1) of the Act is replaced by the following:

40. (1) Any property of a bankrupt that is listed in the statement of affairs referred to in paragraph 158(d) or otherwise disclosed to the trustee before the bankrupt’s discharge and that is found incapable of realization must be returned to the bankrupt before the trustee’s application for discharge, but if inspectors have been appointed, the trustee may do so only with their permission.

30. (1) Subsection 47(1) of the Act is replaced by the following:

47. (1) If the court is satisfied that a notice is about to be sent or has been sent under subsection 244(1), it may, subject to subsection (3), appoint a trustee as interim receiver of all or any part of the debtor’s property that is subject to the security to which the notice relates until the earliest of

(a) the appointment of a receiver within the meaning of subsection 243(2) in respect of any of the debtor’s property,

(b) the filing of or making of an assignment by or in respect of the debtor,

(c) the granting of a bankruptcy order against the debtor,

(d) the filing of or making of a proposal by or in respect of the debtor,

(e) the filing of a notice of intention by the debtor, and

(f) the expiry of 60 days after the appointment, or any period specified by the court.

(2) Subsection 47(2) of the Act is amended by adding the word “and” at the end of paragraph (a), by striking out the word “and” at the end of paragraph (b) and by repealing paragraph (c).

31. (1) The portion of subsection 47.1(1) of the Act before paragraph (a) is replaced by the following:

47.1 (1) If a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1), the court may at any time after the filing, subject to subsection (3), appoint as interim receiver of all or any part of the debtor’s property,

(2) Section 47.1 of the Act is amended by adding the following after subsection (1):

(1.1) The appointment expires on the earliest of

(a) the appointment of a receiver within the meaning of subsection 243(2) in respect of any of the debtor’s property,

(b) the filing of or making of an assignment by or in respect of the debtor,

(c) the event that causes an assignment by the debtor to be deemed,

(d) the granting of a bankruptcy order against the debtor, and

(e) the day on which the court approves the proposal.

(3) Subsection 47.1(2) of the Act is amended by adding the word “and” at the end of paragraph (b), by striking out the word “and” at the end of paragraph (c) and by repealing paragraph (d).

32. Paragraph 47.2(3)(a) of the Act is replaced by the following:

(a) the form and content of their accounts, including their final statement of receipts and disbursements,

33. Subsection 49(2) of the Act is replaced by the following:

(2) The assignment must be accompanied by a sworn statement in the prescribed form showing the debtor’s property that is divisible among his or her creditors, the names and addresses of all his or her creditors and the amounts of their respective claims.

34. (1) Subsection 50(2) of the Act is replaced by the following:

(2) Subject to section 50.4, proceedings for a proposal shall be commenced, in the case of an insolvent person, by filing with a licensed trustee, and in the case of a bankrupt, by filing with the trustee of the estate,

(a) a copy of the proposal in writing setting out the terms of the proposal and the particulars of any securities or sureties proposed, signed by the person making the proposal and the proposed sureties if any; and

(b) the prescribed statement of affairs.

(2.1) Copies of the documents referred to in subsection (2) must, at the time the proposal is filed under subsection 62(1), also be filed by the trustee with the official receiver in the locality of the debtor.

(2) Paragraph 50(6)(a) of the Act is replaced by the following:

(a) a statement indicating, on a weekly basis, the projected cash-flow of the insolvent person (in this section referred to as the “cash-flow statement”), or a revised cash-flow statement if a cash-flow statement had previously been filed under subsection 50.4(2) in respect of that insolvent person, prepared by the person making the proposal, reviewed for its reasonableness by the trustee and signed by the trustee and the person making the proposal;

(3) Subsection 50(10) of the Act is amended by striking out the word “and” at the end of paragraph (a) and by adding the following after paragraph (a):

(a.1) send a report about the material adverse change to the creditors without delay after ascertaining the change; and

(4) Section 50 of the Act is amended by adding the following after subsection (12):

(12.1) If the court declares that the proposal is deemed to have been refused by the creditors, paragraphs 57(a) to (c) apply.

35. (1) The portion of subsection 50.4(1) of the English version of the Act before paragraph (a) is replaced by the following:

50.4 (1) Before filing a copy of a proposal with a licensed trustee, an insolvent person may file a notice of intention, in the prescribed form, with the official receiver in the insolvent person’s locality, stating

(2) Paragraph 50.4(2)(a) of the Act is replaced by the following:

(a) a statement indicating, on a weekly basis, the projected cash-flow of the insolvent person (in this section referred to as the “cash-flow statement”), prepared by the insolvent person, reviewed for its reasonableness by the trustee under the notice of intention, and signed by the trustee and the insolvent person;

(3) Subsection 50.4(6) of the Act is replaced by the following:

(6) Within five days after the filing of a notice of intention under subsection (1), the trustee named in the notice shall send to every known creditor, in the prescribed manner, a copy of the notice including all of the information referred to in paragraphs (1) (a) to (c).

(4) Subsection 50.4(7) of the Act is amended by striking out the word “and” at the end of paragraph (a), by adding the word “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(c) shall send a report about the material adverse change to the creditors without delay after ascertaining the change.

(5) Paragraph 50.4(8)(b) of the Act is replaced by the following:

(b) the trustee shall, without delay, file with the official receiver, in the prescribed form, a report of the deemed assignment;

(b.1) the official receiver shall 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; and

(6) The portion of subsection 50.4(9) of the Act before paragraph (a) is replaced by the following:

(9) The insolvent person may, before the expiry of the 30-day period referred to in subsection (8) or of any extension granted under this subsection, apply to the court for an extension, or further extension, as the case may be, of that period, and the court, on notice to any interested persons that the court may direct, may grant the extensions, not exceeding 45 days for any individual extension and not exceeding in the aggregate five months after the expiry of the 30-day period referred to in subsection (8), if satisfied on each application that

36. The Act is amended by adding the following after section 50.5:

50.6 (1) A court may, on the application of a debtor, other than an individual, in respect of whom a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1), make an order, on any conditions that the court considers appropriate, declaring that the debtor’s property is subject to a security or charge in favour of any person specified in the order who agrees to lend to the debtor an amount that is approved by the court as being required by the debtor, having regard to the debtor’s cash-flow statement referred to in paragraph 50(6)(a) or 50.4(2)(a), as the case may be,

(a) for the period of 30 days after the filing of the notice of intention;

(b) for the period of 30 days after the filing of the proposal, if no notice of intention has been filed under section 50.4 in respect of the debtor; or

(c) for any period specified in the order, if notice of the application has been given to the secured creditors likely to be affected by the security or charge.

(2) The court may specify in the order that the security or charge ranks in priority over the claim of any secured creditor of the debtor.

(3) The court may, in the order, specify that the security or charge ranks 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.

(4) In deciding whether to make the order, the court must consider, among other things,

(a) the period the debtor is expected to be subject to proceedings under this Act;

(b) how the debtor’s business and financial affairs are to be governed during the proceedings;

(c) whether the debtor’s management has the confidence of its major creditors;

(d) whether the loan agreement will enhance the debtor’s prospects as a going concern if the proposal is approved;

(e) the nature and value of the debtor’s property;

(f) whether any creditor will be materially prejudiced as a result of the debtor’s continued operations; and

(g) if notice of the application was given to the secured creditors, whether the debtor has provided a cash-flow statement for the period ending 120 days after the making of the application for the order.

37. (1) Subparagraph 54(2)(a)(i) of the Act is replaced by the following:

(i) all unsecured creditors, other than a creditor having a claim against the debtor arising from the rescission of a purchase or sale of a share or unit of the debtor — or a claim for damages arising from the purchase or sale of a share or unit of the debtor, and

(2) Section 54 of the Act is amended by adding the following after subsection (4):

(5) Unless the court orders otherwise, a vote on a proposal may not be held until all disallowances of claims that could have an impact on the outcome of the vote have been dealt with by the court or until all appeal periods have elapsed.

(6) No person is entitled to vote on a claim acquired after the filing of a notice of intention in respect of a debtor or, if no such notice was filed, after the filing of a proposal in respect of the debtor, unless the entire claim is acquired.

38. Paragraph 57(b) of the Act is replaced by the following:

(b) the trustee shall, without delay, file with the official receiver, in the prescribed form, a report of the deemed assignment;

(b.1) the official receiver shall 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; and

39. (1) Paragraph 60(1.3)(a) of the Act is replaced by the following:

(a) it provides for payment to the employees and former employees, immediately after court approval of the proposal, of amounts at least equal to the amounts that they would be qualified to receive under paragraph 136(1)(d) if the employer became bankrupt on the date of the filing of the notice of intention, or proposal if no notice of intention was filed, as well as wages, salaries, commissions or compensation for services rendered after that date and before the court approval of the proposal, together with, in the case of travelling salespersons, disbursements properly incurred by them in and about the bankrupt’s business during the same period; and

(2) Section 60 of the Act is amended by adding the following after subsection (1.4):

(1.5) No proposal in respect of an employer who participates in a prescribed pension plan for the benefit of its employees shall be approved by the court unless

(a) the proposal provides for payment of the following amounts that are unpaid to the fund established for the purpose of the pension plan:

(i) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund,

(ii) if the prescribed pension plan is regulated by an Act of Parliament,

(A) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and

(B) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985; and

(iii) in the case of any other prescribed pension plan,

(A) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament, and

(B) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament; and

(b) the court is satisfied that the employer can and will make the payments as required under paragraph (a).

(1.6) Despite subsection (1.5), the court may approve a proposal that does not allow for the payment of the amounts referred to in that subsection if it is satisfied that the relevant parties have entered into an agreement, approved by the relevant pension regulator, respecting the payment of those amounts.

40. Paragraph 61(2)(b) of the Act is replaced by the following:

(b) the trustee shall, without delay, file with the official receiver, in the prescribed form, a report of the deemed assignment;

(b.1) the official receiver shall 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; and

41. (1) Subsection 62(1) of the Act is replaced by the following:

62. (1) If a proposal is made in respect of an insolvent person, the trustee shall file with the official receiver a copy of the proposal and the prescribed statement of affairs.

(2) Subsection 62(2) of the Act is replaced by the following:

(2) Subject to subsection (2.1), a proposal accepted by the creditors and approved by the court is binding on creditors in respect of

(a) all unsecured claims; and

(b) the secured claims in respect of which the proposal was made and that were in classes in which the secured creditors voted for the acceptance of the proposal by a majority in number and two thirds in value of the secured creditors present, or represented by a proxyholder, at the meeting and voting on the resolution to accept the proposal.

(2.1) A proposal accepted by the creditors and approved by the court does not release the insolvent person from any particular debt or liability referred to in subsection 178(1) unless the proposal explicitly provides for the compromise of that debt or liability and the creditor in relation to that debt or liability has assented to the proposal.

42. The Act is amended by adding the following after section 63:

64. (1) The court may, on the application of any person interested in the matter, make an order removing from office any director of a debtor in respect of whom a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1) if the court is satisfied that the director is unreasonably impairing or is likely to unreasonably impair the possibility of a viable proposal being made in respect of the debtor or is acting or is likely to act inappropriately as a director in the circumstances.

(2) The court may, by order, fill any vacancy created under subsection (1).

64.1 (1) The court may, on the application of a person in respect of whom a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1), make an order declaring that the assets of the person are subject to a security or charge, in an amount that the court considers appropriate, in favour of any director or officer of the person to indemnify the director or officer against obligations and liabilities that he or she may incur as a director or an officer of the person after the filing of the notice of intention or the proposal, as the case may be.

(2) The court may specify in the order that the security or charge ranks in priority over the claim of any secured creditor of the person.

(3) The court shall not make the order if in its opinion the person could obtain adequate indemnification insurance for the director or officer at a reasonable cost.

(4) The court shall make an order declaring that the security or charge does not apply in respect of a specific obligation or liability incurred by a director or an officer if it is of the opinion that the obligation or liability was incurred as a result of the director’s or officer’s gross negligence or wilful misconduct or, in the Province of Quebec, the director’s gross or intentional fault.

64.2 (1) The court may make an order declaring that property of a person, other than an individual, in respect of whom a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1) is subject to a security or charge, in an amount that the court considers appropriate, in respect of

(a) the costs of the interim receiver, the receiver-manager and the trustee, including their legal costs;

(b) the person’s costs incurred in relation to the remuneration and expenses of any financial, legal or other experts engaged by the person for the purpose of any proceedings under this Division; and

(c) the costs of any interested party incurred in relation to the remuneration and expenses of any financial, legal or other experts engaged by the party, if the court is satisfied that the incurring of those costs is necessary for the effective participation of the interested party in the proceedings under this Division in relation to the person.

(2) The court may specify in the order that the security or charge ranks in priority over the claim of any secured creditor of the person.

43. (1) The portion of subsection 65.1(1) of the Act before paragraph (a) is replaced by the following:

65.1 (1) If a notice of intention or a proposal has been filed in respect of an insolvent person, no person may terminate or amend any agreement, including a security agreement, with the insolvent person, or claim an accelerated payment, or a forfeiture of the term, under any agreement, including a security agreement, with the insolvent person, by reason only that

(2) Subsection 65.1(4) of the Act is amended by striking out the word “or” at the end of paragraph (a), by adding the word “or” at the end of paragraph (b) and by adding the following after paragraph (b):

(c) as preventing a lessor of aircraft objects under an agreement with the insolvent person from taking possession of the aircraft objects

(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the aircraft objects in accordance with the agreement,

(ii) 60 days after the commencement of proceedings under this Act unless, during that period, the insolvent person

(A) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the insolvent person’s financial condition,

(B) agreed to perform the obligations under the agreement, other than an obligation not to become insolvent or an obligation relating to the insolvent person’s financial condition, until the day on which proceedings under this Act end, and

(C) agreed to perform all the obligations arising under the agreement after the proceedings under this Act end, or

(iii) if, during the period that begins on the expiry of the 60-day period and ends on the day on which proceedings under this Act end, the insolvent person defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the insolvent person’s financial condition.

44. The Act is amended by adding the following after section 65.1:

65.11 (1) A debtor, other than an individual, in respect of whom a notice of intention has been filed under section 50.4 or a proposal has been filed under subsection 62(1) may, subject to subsection (3), disclaim or resiliate any agreement to which the debtor is a party on the date the notice of intention or the proposal was filed by giving 30 days notice to the other parties to the agreement in the prescribed manner.

(2) Subsection (1) does not apply in respect of

(a) an eligible financial contract within the meaning of subsection 65.1(8);

(b) a lease referred to in subsection 65.2(1);

(c) a collective agreement;

(d) a financing agreement if the debtor is the borrower; and

(e) a lease of real property or an immovable if the debtor is the lessor.

(3) Within 15 days after being given notice of the disclaimer or resiliation, a party to the agreement may apply to the court for a declaration that subsection (1) does not apply in respect of the agreement, and the court, on notice to any parties that it may direct, shall, subject to subsection (4), make that declaration.

(4) No declaration under subsection (3) shall be made if the court is satisfied that a viable proposal could not be made in respect of the debtor without the disclaimer or resiliation of the agreement and all other agreements that the debtor has disclaimed or resiliated under subsection (1) or 65.2(1).

(5) If the debtor has, in any agreement, granted the use of any intellectual property to a party to the agreement, the disclaimer or resiliation of the agreement does not affect the party’s right to use the intellectual property so long as that party continues to perform its obligations in relation to the use of the intellectual property.

(6) If an agreement is disclaimed or resil­iated, every other party to the agreement is deemed to have a claim for damages as an unsecured creditor.

65.12 (1) An insolvent person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) who is a party to a collective agreement and who is unable to reach a voluntary agreement with the bargaining agent to revise any of its provisions may, on giving five days notice to the bargaining agent, apply to the court for an order authorizing the insolvent person to serve a notice to bargain under the laws of the jurisdiction governing collective bargaining between the insolvent person and the bargaining agent.

(2) The court may issue the order only if it is satisfied that

(a) the insolvent person would not be able to make a viable proposal, taking into account the terms of the collective agreement;

(b) the insolvent person has made good faith efforts to renegotiate the provisions of the collective agreement; and

(c) the failure to issue the order is likely to result in irreparable damage to the insolvent person.

(3) The vote of the creditors in respect of a proposal may not be delayed solely because the period provided in the laws of the jurisdiction governing collective bargaining between the insolvent person and the bargaining agent has not expired.

(4) If the parties to the collective agreement agree to revise the collective agreement after proceedings have been commenced under this Act in respect of the insolvent person, the bargaining agent that is a party to the agreement has a claim, as an unsecured creditor, for an amount equal to the value of concessions granted by the bargaining agent with respect to the remaining term of the collective agreement.

(5) On the application of the bargaining agent and on notice to the person to whom the application relates, the court may, subject to any terms and conditions it specifies, make an order requiring the person to make available to the bargaining agent any information specified by the court in the person’s possession or control that relates to the insolvent person’s business or financial affairs and that is relevant to the collective bargaining between the insolvent person and the bargaining agent. The court may make the order only after the insolvent person has been authorized to serve a notice to bargain under subsection (1).

(6) For greater certainty, any collective agreement that the insolvent person and the bargaining agent have not agreed to revise remains in force.

(7) For the purpose of this section, the parties to a collective agreement are the insolvent person and the bargaining agent who are bound by the collective agreement.

65.13 (1) An insolvent person, other than an individual, in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) may not sell or otherwise dispose of assets outside the ordinary course of business unless authorized to do so by a court.

(2) An insolvent person who applies to the court for the authorization must give notice of the application to all secured creditors who are likely to be affected by the proposed sale or disposal of the assets to which the application relates.

(3) In deciding whether to grant the authorization, the court must consider, among other things,

(a) whether the process leading to the proposed sale or disposal of the assets was reasonable in the circumstances;

(b) whether the trustee approved the process leading to the proposed sale or disposal of the assets;

(c) whether the trustee has filed with the court a report stating that in his or her opinion the sale or disposal of the assets is necessary for a viable proposal that will provide a better result for creditors than if the assets were sold or disposed of under a bankruptcy;

(d) the extent to which the creditors were consulted in respect of the proposed sale or disposal;

(e) the effects of the proposed sale or disposal on creditors and other interested parties; and

(f) whether the consideration to be received for the assets is reasonable and fair, taking into account the market value of the assets.

(4) In addition to taking the factors referred to in subsection (3) into account, if the proposed sale or disposal is to a person who is related to the insolvent person, the court may grant the authorization only if it is satisfied that

(a) good faith efforts were made to sell or dispose of the assets to persons who are not related to the person proposing to sell or dispose of them; and

(b) the consideration to be received is supe­rior to the consideration that would be received under all other offers actually received in respect of the assets.

(5) For the purpose of subsection (4), a person who is related to the insolvent person includes a person who controls the insolvent person, a director or an officer of the insolvent person and a person who is related to a director or an officer of the insolvent person.

(6) In granting an authorization for the sale or disposal of assets, the court may order that the assets may be sold or disposed of free and clear of any security, charge or other restriction, but if it so orders, it shall also order that the proceeds realized from the sale or disposal of the assets are subject to a security, charge or other restriction in favour of the creditors whose security, charges or other restrictions are affected by the order.

45. Section 66 of the Act is amended by adding the following after subsection (1):

(1.1) For the purposes of subsection (1), in deciding whether to make an assignment under subsection 84.1(1), the court must, in addition to the factors referred to in subsection 84.1(4), also consider whether the insolvent person would not be able to make a viable proposal without the assignment.

(1.2) For the purposes of subsection (1), the trustee is to prepare the final statement of receipts and disbursements referred to in section 151 without delay after

(a) the debtor files or is deemed to have filed an assignment;

(b) the trustee informs the creditors and the official receiver of a default made in the performance of any provision in a proposal; or

(c) the trustee gives the certificate referred to in section 65.3 in respect of the proposal.

(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 who has filed a notice of intention under section 50.4 or a proposal, before the proposal is approved by the court or the person becomes bankrupt.

46. The definition “consumer debtor” in section 66.11 of the Act is replaced by the following:

“consumer debtor” means an individual who is bankrupt or insolvent and whose aggregate debts, excluding any debts secured by the individual’s principal residence, are not more than $250,000 or any other prescribed amount;

47. Subsection 66.12(2) of the English version of the Act is replaced by the following:

(2) A consumer debtor who has filed a notice of intention or a proposal under Division I may not make a consumer proposal until the trustee appointed in respect of the notice of intention or proposal under Division I has been discharged.

48. Paragraph 66.13(2)(d) of the Act is replaced by the following:

(d) subject to subsection (3), file with the official receiver a copy of the consumer proposal, signed by the consumer debtor, and the prescribed statement of affairs.

49. (1) Paragraph 66.14(a) of the Act is amended by adding the word “and” at the end of subparagraph (ii) and by repealing subparagraph (iii).

(2) Subparagraph 66.14(b)(i) of the Act is replaced by the following:

(i) a copy of the consumer proposal and a copy of the statement of affairs referred to in paragraph 66.13(2)(d),

50. Subsection 66.17(2) of the Act is replaced by the following:

(2) Unless it is rescinded, any assent or dissent received by the administrator at or before a meeting of creditors has effect as if the creditor had been present and had voted at the meeting.

51. Subsection 66.28(2) of the Act is replaced by the following:

(2) Subject to subsection (2.1), a consumer proposal accepted, or deemed accepted, by the creditors and approved, or deemed approved, by the court is binding on creditors in respect of

(a) all unsecured claims; and

(b) secured claims for which proofs of claim have been filed in the manner provided for in sections 124 to 134.

(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 has assented to the consumer proposal.

52. Section 66.31 of the Act is replaced by the following:

66.31 (1) Unless the court has previously ordered otherwise or unless an amendment to the consumer proposal has previously been filed, a consumer proposal is deemed to be annulled on

(a) in the case when payments under the consumer proposal are to be made monthly or more frequently, the day on which the consumer debtor is in default for an amount that is equal to or more than the amount of three payments; or

(b) in the case when payments under the consumer proposal are to be made less frequently than monthly, the day that is three months after the day on which the consumer debtor is in default in respect of any payment.

(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 on the day on which the amendment is withdrawn or refused.

(3) Without delay after a consumer proposal is deemed to be annulled, the administrator shall

(a) file with the official receiver, in the prescribed form, a report in relation to the deemed annulment; and

(b) send a notice to the creditors informing them of the deemed annulment.

(4) When 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 date of the deemed annulment;

(b) the trustee who is the administrator of the consumer proposal shall, within five days after the deemed annulment, 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.

(5) A deemed annulment of a consumer proposal does not prejudice the validity of any sale, 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.

(6) If the administrator, in the case of a deemed annulment of a consumer proposal made by a person other than a bankrupt, considers it appropriate to do so in the circumstances, he or she may, with notice to the official receiver, send to the creditors, within 10 days 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 45 days after the day on which it was deemed to be annulled unless one of them files with the administrator a notice of objection, in the prescribed manner, to the revival.

(7) If the notice is sent by the administrator and no notice of objection is filed during the 45-day period, the consumer proposal is automat­ically revived on the expiry of those 45 days.

(8) If a notice of objection is filed with the administrator during the 45-day period, the administrator must, without delay, send 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 the 45-day period.

(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 has been 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.

(10) Without delay after a consumer proposal is revived, the administrator shall

(a) file with the official receiver, in the prescribed form, a report in relation to the revival; and

(b) send a notice to the creditors informing them of the revival.

(11) The revival of a consumer proposal does not prejudice the validity of anything duly done — between the day on which the consumer proposal is deemed to be annulled and the day on which it is revived — by a creditor in the exercise of any rights revived by subsection 66.32(2).

53. Subsection 66.32(2) of the French version of the Act is replaced by the following:

54. Section 66.33 of the Act is repealed.

55. The portion of subsection 66.34(1) of the Act before paragraph (a) is replaced by the following:

66.34 (1) If a consumer proposal has been filed in respect of a consumer debtor, no person may terminate or amend any agreement, including a security agreement, with the consumer debtor, or claim an accelerated payment, or the forfeiture of the term, under any agreement, including a security agreement, with the consumer debtor, by reason only that

56. Sections 66.37 and 66.38 of the Act are replaced by the following:

66.37 If an administrator files an amendment to a consumer proposal before the withdrawal, refusal, approval or deemed approval by the court of the consumer proposal, or after the approval or deemed approval by the court of the consumer proposal and before it has been fully performed or annulled or deemed annulled, the provisions of this Division apply to the consumer proposal and the amended consumer proposal, with any modifications that the circumstances require, and, for that purpose, the definition “consumer debtor” in section 66.11 is to be read as follows:

“consumer debtor” means an individual who is insolvent;

66.38 (1) If a consumer proposal is fully performed, the administrator shall issue a certificate to that effect, in the prescribed form, to the consumer debtor and to the official receiver.

(2) Subsection (1) does not apply in respect of a consumer debtor who has refused or neglected to receive counselling provided under paragraph 66.13(2)(b).

57. (1) Paragraphs 67(1)(b) and (b.1) of the Act are replaced by the following:

(b) any property, other than 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, 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),

(b.3) subject to any prescribed conditions and limitations, property in a registered retirement savings plan or a registered retirement income fund, as those expressions are defined in the Income Tax Act, other than property contributed to any such plan or fund in the 12 months, or in any longer period that the court may specify, before the date of bankruptcy,

(2) Paragraph 67(1)(c) of the Act 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 his or her 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 of any such refund that is not subject to the operation of this Act, and

58. (1) Subsections 68(1) to (7) of the Act are replaced by the following:

68. (1) The Superintendent shall, by directive, establish in respect of the provinces or one or more bankruptcy districts or parts of bankruptcy districts, the standards for determining the surplus income of an individual bankrupt and the amount that a bankrupt who has surplus income is required to pay to the estate of the bankrupt.

(2) The following definitions apply in this section.

“surplus income” means the portion of the total income of an individual bankrupt that exceeds that which is necessary to enable the bankrupt to maintain a reasonable standard of living, having regard to the applicable standards established under subsection (1).

“total income”, for the purposes of the definition “surplus income”,

(a) includes, despite paragraphs 67(1)(b) and (b.1), all of a bankrupt’s revenues from whatever nature or source that are received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, including any amounts received as damages for wrongful dismissal, as a pay equity settlement or under any Act of Parliament or Act of the legislature of a province that relates to workers’ or workmen’s compensation; but

(b) does not include any amounts received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, as a gift, a legacy or an inheritance or as any other windfall.

(3) The trustee shall, having regard to the applicable standards and to the personal and family situation of the bankrupt, determine whether the bankrupt has surplus income. The determination must also be made

(a) whenever the trustee becomes aware of a material change in the bankrupt’s financial situation; and

(b) whenever the trustee is required to prepare a report referred to in subsection 170(1).

(4) Whenever the trustee is required to determine whether the bankrupt has surplus income, the trustee shall

(a) if the trustee determines that there is surplus income,

(i) fix, having regard to the applicable standards, the amount that the bankrupt is required to pay to the estate of the bankrupt,

(ii) inform, in the prescribed manner, the official receiver, and every creditor who has requested such information, of the amount fixed under subparagraph (i), and

(iii) take reasonable measures to ensure that the bankrupt complies with the requirement to pay; and

(b) if the trustee determines that there is no surplus income, inform, in the prescribed manner, the official receiver, and every creditor who has requested such information, of that determination.

(5) If the official receiver determines that the amount required to be paid by the bankrupt is substantially not in accordance with the appli­cable standards, the official receiver shall recommend to the trustee and to the bankrupt an amount required to be paid that the official receiver determines is in accordance with the applicable standards.

(5.1) On receipt of the official receiver’s recommendation, the trustee may fix, having regard to the applicable standards, another amount as the amount that the bankrupt is required to pay to the estate of the bankrupt, and if the trustee does so, the trustee shall

(a) inform the official receiver and every creditor, in the prescribed manner, of the amount fixed under this subsection; and

(b) take reasonable measures to ensure that the bankrupt complies with the requirement to pay.

(6) If the trustee and the bankrupt are not in agreement with the amount that the bankrupt is required to pay under subsection (4) or (5.1), the trustee shall, without delay, in the prescribed form, send to the official receiver a request that the matter be determined by mediation and send a copy of the request to the bankrupt.

(7) On a creditor’s request made within 30 days after the trustee has informed the creditor of the amount fixed under subsection (4) or (5.1), the trustee shall, within five days after the 30-day period, 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.

(2) Subsection 68(10) of the Act is replaced by the following:

(10) The trustee may, in any of the following circumstances — and shall apply if requested to do so by the official receiver in the circumstances referred to in paragraph (a) — apply to the court to fix, by order, in accordance with the applicable standards, and having regard to the personal and family situation of the bankrupt, the amount that the bankrupt is required to pay to the estate of the bankrupt:

(a) if the trustee has not implemented a recommendation made by the official receiver under subsection (5);

(b) if the matter submitted to mediation has not been resolved by the mediation; or

(c) if the bankrupt has failed to comply with the requirement to pay as determined under this section.

(3) Subsection 68(12) of the Act is replaced by the following:

(12) On the application of any interested person, the court may, at any time, amend an order made under this section to take into account material changes that have occurred in the financial situation of the bankrupt.

(4) Subsection 68(14) of the Act is replaced by the following:

(14) For the purpose of this section, a requirement that a bankrupt pay an amount to the estate of the bankrupt is enforceable against all the bankrupt’s property, including property referred to in paragraphs 67(1)(b) and (b.1).

(15) If an opposition to the automatic discharge of an individual bankrupt who is required to pay an amount to the estate of the bankrupt 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 an amount that the court considers appropriate to the estate of the bankrupt.

59. Subsection 68.1(2) of the Act is replaced by the following:

(2) An assignment of existing or future amounts receivable as payment for or commission or professional fees in respect of services rendered by a debtor who is an individual before the debtor became bankrupt is of no effect in respect of such amounts earned or generated after the bankruptcy.

60. (1) The portion of paragraph 69(2)(d) of the Act before subparagraph (i) is replaced by the following:

(d) to prevent a creditor who holds security on aircraft objects under an agreement with the insolvent person from taking possession of the aircraft objects

(2) Subparagraph 69(2)(d)(i) of the English version of the Act is replaced by the following:

(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the aircraft objects in accordance with the agreement,

61. (1) The portion of paragraph 69.1(2)(d) of the Act before subparagraph (i) is replaced by the following:

(d) to prevent a creditor who holds security on aircraft objects under an agreement with the insolvent person from taking possession of the aircraft objects

(2) Subparagraph 69.1(2)(d)(i) of the English version of the Act is replaced by the following:

(i) if, after the commencement of proceedings under this Act, the insolvent person defaults in protecting or maintaining the aircraft objects in accordance with the agreement,

62. (1) Subsection 69.3(1) of the Act is replaced by the following:

69.3 (1) Subject to subsections (1.1) and (2) and sections 69.4 and 69.5, on the bankruptcy of any debtor, no creditor has any remedy against the debtor or the debtor’s property, or shall commence or continue any action, execution or other proceedings, for the recovery of a claim provable in bankruptcy.

(1.1) Subsection (1) ceases to apply in respect of a creditor on the day on which the trustee is discharged.

(2) The portion of subsection 69.3(2) of the Act before paragraph (a) is replaced by the following:

(2) Subject to subsection (3), sections 79 and 127 to 135 and subsection 248(1), the bankruptcy of a debtor does not prevent a secured creditor from realizing or otherwise dealing with his or her security in the same manner as he or she would have been entitled to realize or deal with it if this section had not been passed, unless the court otherwise orders, but in so ordering the court shall not postpone the right of the secured creditor to realize or otherwise deal with his or her security, except as follows:

(3) Subsection 69.3(3) of the Act is replaced by the following:

(3) If a secured creditor who holds security on aircraft objects under an agreement with the bankrupt is postponed from realizing or otherwise dealing with that security, the order under which the postponement is made is terminated

(a) if, after the order is made, the trustee defaults in protecting or maintaining the aircraft objects in accordance with the agreement;

(b) 60 days after the day on which the order is made unless, during that period, the trustee

(i) remedied the default of every other obligation under the agreement, other than a default constituted by the commencement of proceedings under this Act or the breach of a provision in the agreement relating to the bankrupt’s financial condition, and

(ii) agreed to perform the obligations under the agreement, other than the bankrupt’s obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition, until the day on which the secured creditor is able to realize or otherwise deal with his or her security; or

(c) if, during the period that begins 60 days after the day on which the order is made and ends on the day on which the secured creditor is able to realize or otherwise deal with his or her security, the trustee defaults in performing an obligation under the agreement, other than the bankrupt’s obligation not to become insolvent or an obligation relating to the bankrupt’s financial condition.

63. Subsection 70(2) of the English version of the Act is replaced by the following:

(2) Despite subsection (1), one bill of costs of a barrister or solicitor or, in the Province of Quebec, an advocate, including the executing officer’s fees and land registration fees, shall be payable to the creditor who has first attached by way of garnishment or filed with the executing officer an attachment, execution or other process against the property of the bankrupt.

64. Subsection 74(3) of the English version of the Act is replaced by the following:

(3) If a bankrupt owns any real property or immovable or holds any charge registered in a land registry office or has or is believed to have any interest, estate or right in any of them, and for any reason a copy of the bankruptcy order or assignment has not been registered as provided in subsection (1), a caveat or caution may be filed with the official in charge of the land registry by the trustee, and any registration made after the filing of the caveat or caution in respect of the real property, immovable or charge is subject to the caveat or caution unless it has been removed or cancelled under the provisions of the Act under which the real property, immovable, charge, interest, estate or right is registered.

65. (1) Subsection 81(2) of the Act is replaced by the following:

(2) The trustee with whom a proof of claim is filed under subsection (1) shall within 15 days after the filing of the claim or within 15 days after the first meeting of creditors, whichever is the later, either admit the claim and deliver possession of the property to the claimant or send notice in the prescribed manner to the claimant that the claim is disputed, with the trustee’s reasons for disputing it, and, unless the claimant appeals the trustee’ decision to the court within 15 days after the sending of the notice of dispute, the claimant is deemed to have abandoned or relinquished all his or her right to or interest in the property to the trustee who may then sell or dispose of the property free of any right, title or interest of the claimant.

(2) Subsection 81(4) of the Act is replaced by the following:

(4) The trustee may send notice in the prescribed manner to any person to prove his or her claim to or in property under this section, and, unless that person files with the trustee a proof of claim, in the prescribed form, within 15 days after the sending of the notice, the trustee may then, with the leave of the court, sell or dispose of the property free of any right, title or interest of that person.

66. (1) The portion of subsection 81.1(1) of the Act before paragraph (c) is replaced by the following:

81.1 (1) Subject to this section, if a person (in this section referred to as the “supplier”) has sold to another person (in this section referred to as the “purchaser”) goods for use in relation to the purchaser’s business and delivered the goods to the purchaser or to the purchaser’s agent or mandatary, and the purchaser has not fully paid for the goods, the supplier may have access to and repossess the goods at the supplier’s own expense, and the purchaser, trustee or receiver, or the purchaser’s agent or mandatary, as the case may be, shall release the goods, if

(a) the supplier presents a written demand for repossession to the purchaser, trustee or receiver, in the prescribed form and containing the details of the transaction, within a period of 15 days after the day on which the purchaser became bankrupt or became a person who is subject to a receivership;

(b) the goods were delivered within 30 days before the day on which the purchaser became bankrupt or became a person who is subject to a receivership;

(2) Subsections 81.1(4) and (5) of the Act are replaced by the following:

(4) If a notice of intention under section 50.4 or a proposal was filed in respect of the purchaser after the delivery of the goods to the purchaser and before the purchaser became bankrupt or became a person who is subject to a receivership, the 30-day period referred to in paragraph (1)(b) is the 30-day period before the filing of the notice of intention or, if there was no notice of intention, the filing of the proposal.

(5) A supplier’s right to repossess goods under this section expires if not exercised within the 15-day period referred to in paragraph (1)(a), unless the period is extended before its expiry by the trustee or receiver, or by the court.

(3) Section 81.1 of the Act is amended by adding the following after subsection (11):

(12) The following definitions apply in this section.

“person who is subject to a receivership” means a person in respect of whom any property is under the possession or control of a receiver.

“receiver” means a receiver within the meaning of subsection 243(2).

67. The Act is amended by adding the following after section 81.2:

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 six months immediately before the date of bankruptcy is secured, as of that date, to the extent of $2,000, by security on all the current assets of the bankrupt on that date.

(2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for within the six month period referred to in that subsection, are deemed to have been earned in those six months.

(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 six months immediately before the date of bankruptcy is secured, as of that date, to the extent of $1,000, by security on all the bankrupt’s current assets on that date.

(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.

(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 of the amounts paid to that person by the trustee.

(6) For the purpose of this section and section 81.4, “compensation” includes vacation pay but does not include termination or severance pay.

(7) A claim referred to in this section is proved by delivering to the trustee a proof of claim in the prescribed form.

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 immediately 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, by security on all the person’s current assets that are in the possession or under the control of the receiver.

(2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for within the six-month period referred to in that subsection, are deemed to have been earned in those six months.

(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 immediately 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, by security on all the person’s current assets that are in the possession or under the control of the receiver.

(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.

(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 of the amounts paid to that person by the receiver.

(6) A claim referred to in this section is proved by delivering to the receiver a proof of claim in the prescribed form.

(7) The following definitions apply in this section.

“person who is subject to a receivership” means a person in respect of whom any property is under the possession or control of a receiver.

“receiver” means a receiver within the meaning of subsection 243(2).

81.5 (1) If the bankrupt is an employer who participated or participates in a prescribed pension plan for the benefit of the bankrupt’s employees, the following amounts that are unpaid on the date of bankruptcy to the fund established for the purpose of the pension plan are secured by security on all the assets of the bankrupt:

(a) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund;

(b) if the prescribed pension plan is regulated by an Act of Parliament,

(i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and

(ii) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985; and

(c) in the case of any other prescribed pension plan,

(i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament, and

(ii) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament.

(2) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s assets, regardless of when that other claim, right, charge or security arose, except

(a) rights under sections 81.1 and 81.2;

(b) amounts referred to in subsection 67(3) that have been deemed to be held in trust; and

(c) securities under sections 81.3 and 81.4.

(3) If the trustee disposes of assets covered by the security, the trustee is liable for the amounts referred to in subsection (1) to the extent of the amount realized on the disposition of the assets, and is subrogated in and to all rights of the fund established for the purpose of the pension plan in respect of those amounts.

81.6 (1) If a person who is subject to a receivership is an employer who participated or participates in a prescribed pension plan for the benefit of the person’s employees, the following amounts that are unpaid immediately before the first day on which there was a receiver in relation to the person are secured by security on all the person’s assets:

(a) an amount equal to the sum of all amounts that were deducted from the employees’ remuneration for payment to the fund;

(b) if the prescribed pension plan is regulated by an Act of Parliament,

(i) an amount equal to the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that was required to be paid by the employer to the fund, and

(ii) an amount equal to the sum of all amounts that were required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985; and

(c) in the case of any other prescribed pension plan,

(i) an amount equal to the amount that would be the normal cost, within the meaning of subsection 2(1) of the Pension Benefits Standards Regulations, 1985, that the employer would be required to pay to the fund if the prescribed plan were regulated by an Act of Parliament, and

(ii) an amount equal to the sum of all amounts that would have been required to be paid by the employer to the fund under a defined contribution provision, within the meaning of subsection 2(1) of the Pension Benefits Standards Act, 1985, if the prescribed plan were regulated by an Act of Parliament.

(2) A security under this section ranks above every other claim, right, charge or security against the person’s assets, regardless of when that other claim, right, charge or security arose, except rights under sections 81.1 and 81.2 and securities under sections 81.3 and 81.4.

(3) If the receiver disposes of assets covered by the security, the receiver is liable for the amounts referred to in subsection (1) to the extent of the amount realized on the disposition of the assets, and is subrogated in and to all rights of the fund established for the purpose of the pension plan in respect of those amounts.

(4) The following definitions apply in this section.

“person who is subject to a receivership” means a person in respect of whom any property is under the possession or control of a receiver.

“receiver” means a receiver within the meaning of subsection 243(2).

68. The Act is amended by adding the following after section 84:

84.1 (1) The court may, on application by an insolvent person or a trustee, make an order assigning the rights and obligations of the insolvent person under any agreement to any person, specified by the court, who has agreed to the assignment.

(2) The applicant must give notice of the assignment, in the prescribed manner, to every party to the agreement.

(3) Subsection (1) does not apply in respect of rights and obligations

(a) under an eligible financial contract within the meaning of subsection 65.1(8);

(b) under a lease referred to in subsection 65.2(1);

(c) under a collective agreement; and

(d) that are not assignable by reason of their nature.

(4) In deciding whether to make an assignment, the court must consider, among other things,

(a) whether the person to whom the rights and obligations are to be assigned would be able to perform the obligations; and

(b) whether it would be appropriate to assign the rights and obligations to that person.

(5) The court may not make the assignment if the court is satisfied that the insolvent person is in default under the agreement.

84.2 (1) No person may terminate or amend any agreement, including a security agreement, with an individual bankrupt, or claim an accelerated payment, or a forfeiture of the term, under any agreement, including a security agreement, with the bankrupt, by reason only of the bankruptcy.

(2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend the lease by reason only of the bankruptcy or that the bankrupt has not paid rent in respect of any period before the date of bankruptcy.

(3) No public utility may discontinue service to an individual bankrupt by reason only of the bankruptcy or that the bankrupt has not paid for services rendered, or material provided, before the date of bankruptcy.

(4) Nothing in this section is to be construed as

(a) prohibiting a person from requiring payments to be made in cash for goods, services, use of leased property or other valuable consideration provided after the date of bankruptcy; or

(b) requiring the further advance of money or credit.

(5) Any provision in an agreement that has the effect of providing for, or permitting, anything that, in substance, is contrary to this section is of no force or effect.

(6) The court may, on application by a party to an agreement, declare that this section does not apply, or applies only to the extent declared by the court, if the applicant satisfies the court that the operation of this section would likely cause the applicant significant financial hardship.

69. The portion of paragraph 86(2)(a) of the Act before subparagraph (i) is replaced by the following:

(a) to claims that are secured by a security or charge of a kind that can be obtained by persons other than Her Majesty or a workers’ compensation body

70. Subsection 87(1) of the Act is replaced by the following:

87. (1) A security provided for in federal or provincial legislation for the sole or principal purpose of securing a claim of Her Majesty in right of Canada or of a province or of a workers’ compensation body is valid in relation to a bankruptcy or proposal only if the security is registered under a prescribed system of registration before the date of the initial bankruptcy event.

71. Section 91 of the Act and the heading before it are replaced by the following: