Bill C-62: An Act to amend the Bankruptcy and Insolvency Act, the Companies' Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005

C-62 First Session, Thirty-ninth Parliament, 55-56 Elizabeth II, 2006-2007 HOUSE OF COMMONS OF CANADA BILL C-62 An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005 AS PASSED BY THE HOUSE OF COMMONSJUNE 14, 2007 90388 RECOMMENDATION Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005”. SUMMARY This enactment amends the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005 to ensure the effective operation of that chapter 47. Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca TABLE OF PROVISIONS AN ACT TO AMEND THE BANKRUPTCY AND INSOLVENCY ACT, THE COMPANIES’ CREDITORS ARRANGEMENT ACT, THE WAGE EARNER PROTECTION PROGRAM ACT AND CHAPTER 47 OF THE STATUTES OF CANADA, 2005 BANKRUPTCY AND INSOLVENCY ACT 1-60.       Amendments COMPANIES’ CREDITORS ARRANGEMENT ACT 61-82.       Amendments WAGE EARNER PROTECTION PROGRAM ACT 83-94.       Amendments CHAPTER 47 OF THE STATUTES OF CANADA, 2005 95-109.       Amendments TRANSITIONAL PROVISIONS 110.       Bankruptcy and Insolvency Act 111.       Companies’ Creditors Arrangement Act COORDINATING AMENDMENTS 112.       Bill C-52 COMING INTO FORCE 113.       Order in council .vis1 {position: absolute;display:block;} .vis2 {position: static;} 1st Session, 39th Parliament, 55-56 Elizabeth II, 2006-2007 house of commons of canada BILL C-62 An Act to amend the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act, the Wage Earner Protection Program Act and chapter 47 of the Statutes of Canada, 2005 Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: R.S., c. B-3; 1992, c. 27, s. 2 BANKRUPTCY AND INSOLVENCY ACT 1999, c. 28, s. 146(2) 1. (1) The definition “corporation” in section 2 of the Bankruptcy and Insolvency Act is replaced by the following: “corporation”« personne morale » “corporation” means a company or legal person that is incorporated by or under an Act of Parliament or of the legislature of a province, an incorporated company, wherever incorporated, that is authorized to carry on business in Canada or has an office or property in Canada or an income trust, but does not include banks, authorized foreign banks within the meaning of section 2 of the Bank Act, insurance companies, trust companies, loan companies or railway companies; (2) The definitions “court” and “person” in section 2 of the Act, as enacted by subsection 2(3) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: “court”« tribunal » “court”, except in paragraphs 178(1)(a) and (a.1) and sections 204.1 to 204.3, means a court referred to in subsection 183(1) or (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; “person”« personne » “person” includes a partnership, an unincorporated association, a corporation, a cooperative society or a cooperative organization, the successors of a partnership, of an association, of a corporation, of a society or of an organization and the heirs, executors, liquidators of the succession, administrators or other legal representatives of a person; (3) The definitions “current assets”, “director”, “income trust” and “transfer at undervalue” in section 2 of the Act, as enacted by subsection 2(5) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: “current assets”« actif à court terme » “current assets” means cash, cash equivalents — including negotiable instruments and demand deposits — inventory or accounts receivable, or the proceeds from any dealing with those assets; “director”« administrateur » “director” in respect of a corporation other than an income trust, means a person occupying the position of director by whatever name called and, in the case of an income trust, a person occupying the position of trustee by whatever name called; “income trust”« fiducie de revenu » “income trust” means a trust that has assets in Canada if (a) its units are listed on a prescribed stock exchange on the date of the initial bankruptcy event, or (b) the majority of its units are held by a trust whose units are listed on a prescribed stock exchange on the date of the initial bankruptcy event; “transfer at undervalue”« opération sous-évaluée » “transfer at undervalue” means a disposition of property or provision of services for which no consideration is received by the debtor or for which the consideration received by the debtor is conspicuously less than the fair market value of the consideration given by the debtor; (4) Paragraph (b) of the definition “date of the bankruptcy” in section 2 of the English version of the Act, as enacted by subsection 2(5) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (b) the filing of an assignment in respect of the person, or 1997, c. 12, s. 1(5) (5) The portion of the definition “date of the initial bankruptcy event” in section 2 of the English version of the Act before paragraph (a) is replaced by the following: “date of the initial bankruptcy event”« ouverture de la faillite » “date of the initial bankruptcy event”, in respect of a person, means the earliest of the day on which any one of the following is made, filed or commenced, as the case may be: (6) The definition “date of the initial bankruptcy event” in section 2 of the Act is amended by striking out the word “or” at the end of paragraph (d), by adding the word “or” at the end of paragraph (e) and by adding the following after paragraph (e): (f) proceedings under the Companies’ Creditors Arrangement Act; (7) Section 2 of the Act is amended by adding the following in alphabetical order: “equity claim”« réclamation relative à des capitaux propres » “equity claim” means a claim that is in respect of an equity interest, including a claim for, among others, (a) a dividend or similar payment, (b) a return of capital, (c) a redemption or retraction obligation, (d) a monetary loss resulting from the ownership, purchase or sale of an equity interest or from the rescission, or, in Quebec, the annulment, of a purchase or sale of an equity interest, or (e) contribution or indemnity in respect of a claim referred to in any of paragraphs (a) to (d); “equity interest”« intérêt relatif à des capitaux propres » “equity interest” means (a) in the case of a corporation other than an income trust, a share in the corporation — or a warrant or option or another right to acquire a share in the corporation — other than one that is derived from a convertible debt, and (b) in the case of an income trust, a unit in the income trust — or a warrant or option or another right to acquire a unit in the income trust — other than one that is derived from a convertible debt; “shareholder”« actionnaire » “shareholder” includes a member of a corporation — and, in the case of an income trust, a holder of a unit in an income trust — to which this Act applies; 2. Subsection 4(5) of the Act, as enacted by subsection 5(4) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Presumptions (5) Persons who are related to each other are deemed not to deal with each other at arm’s length while so related. For the purpose of paragraph 95(1)(b) or 96(1)(b), the persons are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length. 3. Section 11.1 of the Act is amended by adding the following after subsection (2): Agreement to provide compilation (3) The Superintendent may enter into an agreement to provide a compilation of all or part of the information that is contained in the public record. 4. Subsection 13.3(1.1) of the French version of the Act, as enacted by subsection 11(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Avis au surintendant (1.1) S’il demande l’autorisation visée au paragraphe (1), le syndic envoie sans délai une copie de sa demande au surintendant. 5. Subsection 13.4(1) of the Act, as enacted by section 12 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Trustee may act for secured creditor 13.4 (1) No trustee may, while acting as the trustee of an estate, act for or assist a secured creditor to assert a claim against the estate or to realize or otherwise deal with a security that the secured creditor holds, unless the trustee has obtained a written opinion from independent legal counsel that the security is valid and enforceable against the estate. 1997, c. 12, s. 12 6. The portion of subsection 14.01(1) of the Act before paragraph (a) is replaced by the following: Decision affecting licence 14.01 (1) If, after making or causing to be made an inquiry or investigation into the conduct of a trustee, it appears to the Superintendent that 7. Subsections 14.02(1.1) and (1.2) of the Act, as enacted by section 15 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Summons (1.1) The Superintendent may, for the purpose of the hearing, issue a 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 their knowledge relative to the subject matter of the inquiry or investigation into the conduct of the trustee; and (c) to bring and produce any books, records, data, documents or papers — including those in electronic form — in their possession or under their control relative to the subject matter of the inquiry or investigation. Effect throughout Canada (1.2) A person may be summoned from any part of Canada by virtue of a summons issued under subsection (1.1). 8. Paragraph 14.03(2)(b) of the French version of the Act, as enacted by subsection 16(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: b) la tenue des investigations ou des enquêtes prévues à l’alinéa 5(3)e); 9. (1) Paragraph 14.06(1.1)(c) of the French version of the Act, as enacted by section 17 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: c) les autres personnes qui sont nommément habilitées à prendre — ou ont pris légalement — la possession ou la responsabilité d’un bien acquis ou utilisé par une personne insolvable ou un failli dans le cadre de ses affaires. (2) Subsection 14.06(1.2) of the Act, as enacted by section 17 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: No personal liability in respect of matters before appointment (1.2) Despite anything in federal or provincial law, if a trustee, in that position, carries on the business of a debtor or continues the employment of a debtor’s employees, the trustee is not by reason of that fact personally liable in respect of a liability, including one as a successor employer, (a) that is in respect of the employees or former employees of the debtor or a predecessor of the debtor or in respect of a pension plan for the benefit of those employees; and (b) that exists before the trustee is appointed or that is calculated by reference to a period before the appointment. 1997, c. 12, s. 15(1) (3) Subsection 14.06(1.3) of the Act is replaced by the following: Status of liability (1.3) A liability referred to in subsection (1.2) is not to rank as costs of administration. Liability of other successor employers (1.4) Subsection (1.2) does not affect the liability of a successor employer other than the trustee. 10. Subsections 30(5) and (6) of the Act, as enacted by section 23 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Related persons (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) a director or officer of the bankrupt; (b) a person who has or has had, directly or indirectly, control in fact of the bankrupt; and (c) a person who is related to a person described in paragraph (a) or (b). Factors to be considered (6) In deciding whether to grant the authorization, the court is to consider, among other things, (a) whether the process leading to the proposed sale or disposition of the property was reasonable in the circumstances; (b) the extent to which the creditors were consulted; (c) the effects of the proposed sale or disposition 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 otherwise 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 any other offer made in accordance with the process leading to the proposed sale or disposition of the property. 11. Subsection 36(1) of the French version of the Act, as enacted by section 28 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Devoirs de l’ancien syndic en cas de substitution 36. (1) À la nomination d’un syndic substitué, le syndic qui l’a précédé soumet immédiatement ses comptes au tribunal et remet au syndic substitué tous les biens de l’actif, avec tous les livres, registres et documents du failli et ceux qui sont relatifs à l’administration de l’actif. Il lui remet également un état complet des recettes provenant des biens du failli ou d’autres sources, intérêts y compris, et de ses débours et dépenses, ainsi que de la rémunération qu’il réclame. L’état est accompagné d’un document contenant la description détaillée de tous les biens du failli qui n’ont pas été vendus ou réalisés, où sont indiqués, en plus de leur valeur, le motif pour lequel ils ne l’ont pas été, ainsi que la façon dont il en a été disposé. 1997, c. 12, s. 25(2) 12. Subsection 41(8.1) of the Act is replaced by the following: Investigation not precluded (8.1) Nothing in subsection (8) is to be construed as preventing an inquiry, investigation or proceeding in respect of a trustee under subsection 14.01(1). 13. Section 46 of the Act is amended by adding the following after subsection (2): Place of filing (3) An application under subsection (1) is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor. 14. (1) Subsection 47(1) of the Act, as enacted by subsection 30(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Appointment of interim receiver 47. (1) If the court is satisfied that a notice is about to be sent or was 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 taking of possession by a receiver, within the meaning of subsection 243(2), of the debtor’s property over which the interim receiver was appointed, (b) the taking of possession by a trustee of the debtor’s property over which the interim receiver was appointed, and (c) the expiry of 30 days after the day on which the interim receiver was appointed or of any period specified by the court. 1992, c. 27, s. 16(1) (2) Subsection 47(2) of the Act is amended by striking out the word “and” at the end of paragraph (b) and by replacing paragraph (c) with the following: (c) take conservatory measures; and (d) summarily dispose of property that is perishable or likely to depreciate rapidly in value. (3) Section 47 of the Act is amended by adding the following after subsection (3): Place of filing (4) An application under subsection (1) is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor. 15. (1) Subsection 47.1(1.1) of the Act, as enacted by subsection 31(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Duration of appointment (1.1) The appointment expires on the earliest of (a) the taking of possession by a receiver, within the meaning of subsection 243(2), of the debtor’s property over which the interim receiver was appointed, (b) the taking of possession by a trustee of the debtor’s property over which the interim receiver was appointed, and (c) court approval of the proposal. 1992, c. 27, s. 16(1) (2) Subsection 47.1(2) of the Act is amended by striking out the word “and” at the end of paragraph (c) and by replacing paragraph (d) with the following: (d) take conservatory measures; and (e) summarily dispose of property that is perishable or likely to depreciate rapidly in value. (3) Section 47.1 of the Act is amended by adding the following after subsection (3): Place of filing (4) An application under subsection (1) is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor. 16. (1) Paragraph 50(6)(a) of the Act, as enacted by subsection 34(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (a) a 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 — (in this section referred to as a “cash-flow statement”) indicating the projected cash-flow of the insolvent person on at least a monthly basis, 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; 1992, c. 27, s. 18(4) (2) Paragraph 50(10)(a) of the Act is replaced by the following: (a) file a report on the state of the insolvent person’s business and financial affairs — containing the prescribed information, if any — (i) with the official receiver without delay after ascertaining a material adverse change in the insolvent person’s projected cash-flow or financial circumstances, and (ii) with the court at any time that the court may order; and 1992, c. 27, s. 18(4) (3) Paragraph 50(10)(b) of the Act is replaced by the following: (b) send, in the prescribed manner, a report on the state of the insolvent person’s business and financial affairs — containing the trustee’s opinion as to the reasonableness of a decision, if any, to include in a proposal a provision that sections 95 to 101 do not apply in respect of the proposal and containing the prescribed information, if any — to the creditors and the official receiver at least 10 days before the day on which the meeting of creditors referred to in subsection 51(1) is to be held. 17. (1) Paragraph 50.4(2)(a) of the Act, as enacted by subsection 35(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (a) a statement (in this section referred to as a “cash-flow statement”) indicating the projected cash-flow of the insolvent person on at least a monthly basis, 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; 1992, c. 27, s. 19 (2) Paragraph 50.4(7)(b) of the English version of the Act is replaced by the following: (b) shall file a report on the state of the insolvent person’s business and financial affairs — containing the prescribed information, if any — (i) with the official receiver without delay after ascertaining a material adverse change in the insolvent person’s projected cash-flow or financial circumstances, and (ii) with the court at or before the hearing by the court of any application under subsection (9) and at any other time that the court may order; and 18. Section 50.6 of the Act, as enacted by section 36 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Order — interim financing 50.6 (1) On application by a debtor in respect of whom a notice of intention was filed under section 50.4 or a proposal was filed under subsection 62(1) and on notice to the secured creditors who are likely to be affected by the security or charge, a court may make an order declaring that all or part of the debtor’s property is subject to a security or charge — in an amount that the court considers appropriate — in favour of a person specified in the order who agrees to lend to the debtor an amount 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. The security or charge may not secure an obligation that exists before the order is made. Individuals (2) In the case of an individual, (a) they may not make an application under subsection (1) unless they are carrying on a business; and (b) only property acquired for or used in relation to the business may be subject to a security or charge. Priority (3) The court may order that the security or charge rank in priority over the claim of any secured creditor of the debtor. Priority — previous orders (4) The court may order that the security or charge rank in priority over any security or charge arising from a previous order made under subsection (1) only with the consent of the person in whose favour the previous order was made. Factors to be considered (5) In deciding whether to make an order, the court is to consider, among other things, (a) the period during which the debtor is expected to be subject to proceedings under this Act; (b) how the debtor’s business and financial affairs are to be managed during the proceedings; (c) whether the debtor’s management has the confidence of its major creditors; (d) whether the loan would enhance the prospects of a viable proposal being made in respect of the debtor; (e) the nature and value of the debtor’s property; (f) whether any creditor would be materially prejudiced as a result of the security or charge; and (g) the trustee’s report referred to in paragraph 50(6)(b) or 50.4(2)(b), as the case may be. 1992, c. 27, s. 22 19. Paragraph 54(2)(d) of the Act is replaced by the following: (d) the proposal is deemed to be accepted by the creditors if, and only if, all classes of unsecured creditors — other than, unless the court orders otherwise, a class of creditors having equity claims — vote for the acceptance of the proposal by a majority in number and two thirds in value of the unsecured creditors of each class present, personally or by proxy, at the meeting and voting on the resolution. 20. The Act is amended by adding the following after section 54: Class — creditors having equity claims 54.1 Despite paragraphs 54(2)(a) and (b), creditors having equity claims are to be in the same class of creditors in relation to those claims unless the court orders otherwise and may not, as members of that class, vote at any meeting unless the court orders otherwise. 21. Section 59 of the Act is amended by adding the following after subsection (3): Court may order amendment (4) If a court approves a proposal, it may order that the debtor’s constating instrument be amended in accordance with the proposal to reflect any change that may lawfully be made under federal or provincial law. 1992, c. 27, s. 24(2) 22. Subsection 60(5) of the Act is replaced by the following: Power of court (5) Subject to subsections (1) to (1.7), the court may either approve or refuse to approve the proposal. 23. Subsection 62(2.1) of the Act, as enacted by subsection 41(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: When insolvent person is released from debt (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 voted for the acceptance of the proposal. 24. Sections 64.1 and 64.2 of the Act, as enacted by section 42 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Security or charge relating to director’s indemnification 64.1 (1) On application by a person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) and on notice to the secured creditors who are likely to be affected by the security or charge, a court may make an order declaring that all or part of the property of the person is 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 they may incur as a director or officer after the filing of the notice of intention or the proposal, as the case may be. Priority (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the person. Restriction — indemnification insurance (3) The court may not make the order if in its opinion the person could obtain adequate indemnification insurance for the director or officer at a reasonable cost. Negligence, misconduct or fault (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 officer if in its opinion the obligation or liability was incurred as a result of the director’s or officer’s gross negligence or wilful misconduct or, in Quebec, the director’s or officer’s gross or intentional fault. Court may order security or charge to cover certain costs 64.2 (1) On notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of a person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) is subject to a security or charge, in an amount that the court considers appropriate, in respect of the fees and expenses of (a) the trustee, including the fees and expenses of any financial, legal or other experts engaged by the trustee in the performance of the trustee’s duties; (b) any financial, legal or other experts engaged by the person for the purpose of proceedings under this Division; and (c) any financial, legal or other experts engaged by any other interested person if the court is satisfied that the security or charge is necessary for the effective participation of that person in proceedings under this Division. Priority (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the person. Individual (3) In the case of an individual, (a) the court may not make the order unless the individual is carrying on a business; and (b) only property acquired for or used in relation to the business may be subject to a security or charge. 1992, c. 27, s. 30; 1997, c. 12, s. 41(2) 25. The definition “eligible financial contract” in subsection 65.1(8) of the Act is replaced by the following: “eligible financial contract”« contrat financier admissible » “eligible financial contract” means an agreement of a prescribed kind; 26. Section 65.11 of the Act, as enacted by section 44 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Disclaimer or resiliation of agreements 65.11 (1) Subject to subsections (3) and (4), a debtor in respect of whom a notice of intention was filed under section 50.4 or a proposal was filed under subsection 62(1) may — on notice given in the prescribed form and manner to the other parties to the agreement and the trustee — disclaim or resiliate any agreement to which the debtor is a party on the day on which the notice of intention or proposal was filed. The debtor may not give notice unless the trustee approves the proposed disclaimer or resiliation. Individuals (2) In the case of an individual, (a) they may not disclaim or resiliate an agreement under subsection (1) unless they are carrying on a business; and (b) only an agreement in relation to the business may be disclaimed or resiliated. Court may prohibit disclaimer or resiliation (3) Within 15 days after the day on which the debtor gives notice under subsection (1), a party to the agreement may, on notice to the other parties to the agreement and the trustee, apply to a court for an order that the agreement is not to be disclaimed or resiliated. Court ordered disclaimer or resiliation (4) If the trustee does not approve the proposed disclaimer or resiliation, the debtor may, on notice to the other parties to the agreement and the trustee, apply to a court for an order that the agreement be disclaimed or resiliated. Factors to be considered (5) In deciding whether to make the order, the court is to consider, among other things, (a) whether the trustee approved the proposed disclaimer or resiliation; (b) whether the disclaimer or resiliation would enhance the prospects of a viable proposal being made in respect of the debtor; and (c) whether the disclaimer or resiliation would likely cause significant financial hardship to a party to the agreement. Date of disclaimer or resiliation (6) An agreement is disclaimed or resiliated (a) if no application is made under subsection (3), on the day that is 30 days after the day on which the debtor gives notice under subsection (1); (b) if the court dismisses the application made under subsection (3), on the day that is 30 days after the day on which the debtor gives notice under subsection (1) or any later day fixed by the court; or (c) if the court orders that the agreement is disclaimed or resiliated under subsection (4), on the day that is 30 days after the day on which the debtor gives notice or any later day fixed by the court. Intellectual property (7) If the debtor has granted a right to use intellectual property to a party to an agreement, the disclaimer or resiliation does not affect the party’s right to use the intellectual property — including the party’s right to enforce an exclusive use — during the term of the agreement, including any period for which the party extends the agreement as of right, as long as the party continues to perform its obligations under the agreement in relation to the use of the intellectual property. Loss related to disclaimer or resiliation (8) If an agreement is disclaimed or resiliated, a party to the agreement who suffers a loss in relation to the disclaimer or resiliation is considered to have a provable claim. Reasons for disclaimer or resiliation (9) A debtor shall, on request by a party to the agreement, provide in writing the reasons for the proposed disclaimer or resiliation within five days after the day on which the party requests them. Exceptions (10) This section 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; or (e) a lease of real property or of an immovable if the debtor is the lessor. 27. Section 65.13 of the Act, as enacted by section 44 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Restriction on disposition of assets 65.13 (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) may not sell or otherwise dispose of assets outside the ordinary course of business unless authorized to do so by a court. Despite any requirement for shareholder approval, including one under federal or provincial law, the court may authorize the sale or disposition even if shareholder approval was not obtained. Individuals (2) In the case of an individual who is carrying on a business, the court may authorize the sale or disposition only if the assets were acquired for or used in relation to the business. Notice to secured creditors (3) An insolvent person who applies to the court for an authorization shall give notice of the application to the secured creditors who are likely to be affected by the proposed sale or disposition. Factors to be considered (4) In deciding whether to grant the authorization, the court is to consider, among other things, (a) whether the process leading to the proposed sale or disposition was reasonable in the circumstances; (b) whether the trustee approved the process leading to the proposed sale or disposition; (c) whether the trustee filed with the court a report stating that in their opinion the sale or disposition would be more beneficial to the creditors than a sale or disposition under a bankruptcy; (d) the extent to which the creditors were consulted; (e) the effects of the proposed sale or disposition on the creditors and other interested parties; and (f) whether the consideration to be received for the assets is reasonable and fair, taking into account their market value. Additional factors — related persons (5) If the proposed sale or disposition is to a person who is related to the insolvent person, the court may, after considering the factors referred to in subsection (4), grant the authorization only if it is satisfied that (a) good faith efforts were made to sell or otherwise dispose of the assets to persons who are not related to the insolvent person; and (b) the consideration to be received is superior to the consideration that would be received under any other offer made in accordance with the process leading to the proposed sale or disposition. Related persons (6) For the purpose of subsection (5), a person who is related to the insolvent person includes (a) a director or officer of the insolvent person; (b) a person who has or has had, directly or indirectly, control in fact of the insolvent person; and (c) a person who is related to a person described in paragraph (a) or (b). Assets may be disposed of free and clear (7) The court may authorize a sale or disposition free and clear of any security, charge or other restriction and, if it does, it shall also order that other assets of the insolvent person or the proceeds of the sale or disposition be subject to a security, charge or other restriction in favour of the creditor whose security, charge or other restriction is to be affected by the order. Restriction — employers (8) The court may grant the authorization only if the court is satisfied that the insolvent person can and will make the payments that would have been required under paragraphs 60(1.3)(a) and (1.5)(a) if the court had approved the proposal. 28. (1) Subsection 66(1.1) of the Act, as enacted by section 45 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Assignments (1.1) For the purposes of subsection (1), in deciding whether to make an order under subsection 84.1(1), the court is to consider, in addition to the factors referred to in subsection 84.1(3), whether the trustee approved the proposed assignment. (2) Subsection 66(1.3) of the Act, as enacted by section 45 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Examination by official receiver (1.3) For the purposes of subsection (1), the examination under oath by the official receiver under subsection 161(1) is to be held — on the attendance of the person in respect of whom a notice of intention is filed under section 50.4 or a proposal is filed under subsection 62(1) — before the proposal is approved by the court or the person becomes bankrupt. Division to be applied conjointly with other Acts (1.4) The provisions of this Division may be applied together with the provisions of an Act of Parliament, or of the legislature of a province, that authorizes or provides for the sanction of compromises or arrangements between a corporation and its shareholders or any class of its shareholders. 29. Subsection 66.28(2.1) of the Act, as enacted by section 51 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: When consumer debtor is released from debt (2.1) A consumer proposal accepted, or deemed accepted, by the creditors and approved, or deemed approved, by the court does not release the consumer debtor from any particular debt or liability referred to in subsection 178(1) unless the consumer proposal explicitly provides for the compromise of that debt or liability and the creditor in relation to that debt or liability voted for the acceptance of the consumer proposal. 30. Subsections 66.31(2) to (10) of the Act, as enacted by section 52 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Deemed annulment — amendment withdrawn or refused (2) If an amendment to a consumer proposal filed before the deemed annulment of the consumer proposal under subsection (1) is withdrawn or refused by the creditors or the court, the consumer proposal is deemed to be annulled at the time that the amendment is withdrawn or refused. Duties of administrator in relation to deemed annulment (3) Without delay after a consumer proposal is deemed to be annulled, the administrator shall (a) file with the official receiver a report in the prescribed form in relation to the deemed annulment; and (b) send a notice to the creditors informing them of the deemed annulment. Effects of deemed annulment — consumer proposal made by a bankrupt (4) If a consumer proposal made by a bankrupt is deemed to be annulled, (a) the consumer debtor is deemed to have made an assignment on the day on which the consumer proposal is deemed to be annulled; (b) the trustee who is the administrator of the consumer proposal shall, within five days after the day on which the consumer proposal is deemed to be annulled, send notice of the meeting of creditors under section 102, at which meeting the creditors may by ordinary resolution, despite section 14, affirm the appointment of the trustee or appoint another trustee in lieu of that trustee; and (c) the trustee shall, without delay, file with the official receiver, in the prescribed form, a report of the deemed annulment and the official receiver shall, without delay, issue a certificate of assignment, in the prescribed form, which has the same effect for the purposes of this Act as an assignment filed under section 49. Validity of things done before deemed annulment (5) A deemed annulment of a consumer proposal does not prejudice the validity of any sale or disposition of property or payment duly made, or anything duly done under or in pursuance of the consumer proposal and, despite the deemed annulment, a guarantee given under the consumer proposal remains in full force and effect in accordance with its terms. Notice of possibility of consumer proposal being automatically revived (6) In the case of a deemed annulment of a consumer proposal made by a person other than a bankrupt, if the administrator considers it appropriate to do so in the circumstances, he or she may, with notice to the official receiver, send to the creditors — within 30 days, or any other number of days that is prescribed, after the day on which the consumer proposal was deemed to be annulled — a notice in the prescribed form informing them that the consumer proposal will be automatically revived 60 days, or any other number of days that is prescribed, after the day on which it was deemed to be annulled unless one of them files with the administrator, in the prescribed manner, a notice of objection to the revival. Automatic revival (7) If the notice is sent by the administrator and no notice of objection is filed during the period referred to in subsection (6), the consumer proposal is automatically revived on the expiry of that period. Notice if no automatic revival (8) If a notice of objection is filed during the period referred to in subsection (6), the administrator is to send, without delay, to the official receiver and to each creditor a notice in the prescribed form informing them that the consumer proposal is not going to be automatically revived on the expiry of that period. Administrator may apply to court to revive consumer proposal (9) The administrator may at any time apply to the court, with notice to the official receiver and the creditors, for an order reviving any consumer proposal of a consumer debtor who is not a bankrupt that was deemed to be annulled, and the court, if it considers it appropriate to do so in the circumstances, may make an order reviving the consumer proposal, on any terms that the court considers appropriate. Duty of administrator if consumer proposal is revived (10) Without delay after a consumer proposal is revived, the administrator shall (a) file with the official receiver a report in the prescribed form in relation to the revival; and (b) send a notice to the creditors informing them of the revival. 31. Section 66.34 of the Act is amended by adding the following after subsection (6): Eligible financial contracts (7) Subsection (1) does not apply in respect of an eligible financial contract. Existing eligible financial contracts (8) For greater certainty, if an eligible financial contract, entered into before a consumer proposal is filed, is terminated on or after the filing of the proposal, the setting off or compensation of obligations — between the consumer debtor and the other parties to the eligible financial contract, in accordance with its provisions — is permitted and, if net termination values determined in accordance with the eligible financial contract are owed by the consumer debtor to another party to the eligible financial contract, the other party is deemed, for the purposes of subsection 69.2(1), to be a creditor of the consumer debtor with a claim provable in bankruptcy in respect of the net termination values. Definitions (9) In this section, “eligible financial contract” and “net termination value” have the same meanings as in subsection 65.1(8). 32. (1) Paragraphs 67(1)(b) to (b.3) of the same statute, as enacted by subsection 57(1) of Chapter 47 of the Statutes of Canada, 2005, are replaced by the following: (b) any property that as against the bankrupt is exempt from execution or seizure under any laws applicable in the province within which the property is situated and within which the bankrupt resides; (b.1) goods and services tax credit payments that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b); (b.2) prescribed payments relating to the essential needs of an individual that are made in prescribed circumstances to the bankrupt and that are not property referred to in paragraph (a) or (b); or (b.3) without restricting the generality of paragraph (b), property in a registered retirement savings plan or a registered retirement income fund, as those expressions are defined in the Income Tax Act, or in any prescribed plan, other than property contributed to any such plan or fund in the 12 months before the date of bankruptcy, (2) Paragraph 67(1)(c) of the Act, as enacted by subsection 57(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (c) all property wherever situated of the bankrupt at the date of the bankruptcy or that may be acquired by or devolve on the bankrupt before their discharge, including any refund owing to the bankrupt under the Income Tax Act in respect of the calendar year — or the fiscal year of the bankrupt if it is different from the calendar year — in which the bankrupt became a bankrupt, except the portion that (i) is not subject to the operation of this Act, or (ii) in the case of a bankrupt who is the judgment debtor named in a garnishee summons served on Her Majesty under the Family Orders and Agreements Enforcement Assistance Act, is garnishable money that is payable to the bankrupt and is to be paid under the garnishee summons, and 33. (1) The portion of the definition “total income” in subsection 68(2) of the Act before paragraph (b), as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: “total income”« revenu total » “total income” (a) includes, despite paragraphs 67(1)(b) and (b.3), a bankrupt’s revenues of whatever nature or from whatever source that are earned or received by the bankrupt between the date of the bankruptcy and the date of the bankrupt’s discharge, including those received as damages for wrongful dismissal, received as a pay equity settlement or received under an Act of Parliament, or of the legislature of a province, that relates to workers’ compensation; but (2) The definition “surplus income” in subsection 68(2) of the English version of the Act, as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: “surplus income”« revenu excédentaire » “surplus income” means the portion of a bankrupt individual’s total income that exceeds that which is necessary to enable the bankrupt individual to maintain a reasonable standard of living, having regard to the applicable standards established under subsection (1). (3) Subsection 68(4) of the French version of the Act, as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Obligations du syndic par suite de la décision (4) Il avise, de la manière prescrite, le séquestre officiel et les créanciers qui en font la demande de sa conclusion et, s’il conclut que le failli a un revenu excédentaire, il fixe, conformément aux normes applicables, la somme que celui-ci doit verser à l’actif de la faillite et prend les mesures indiquées pour qu’il s’exécute. (4) Subsection 68(7) of the English version of the Act, as enacted by subsection 58(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Creditor may request mediation (7) On a creditor’s request made within 30 days after the day on which the trustee informed the creditor of the amount fixed under subsection (4) or (5.1), the trustee shall, within five days after the day on which the 30-day period ends, send to the official receiver a request, in the prescribed form, that the matter of the amount that the bankrupt is required to pay be determined by mediation and send a copy of the request to the bankrupt and the creditor. (5) Subsections 68(14) and (15) of the Act, as enacted by subsection 58(4) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Application is a proceeding (14) For the purposes of section 38, an application referred to in subsection (10) is deemed to be a proceeding for the benefit of the estate. Property included for enforcement purposes (15) For the purpose of this section, a requirement that a bankrupt pay an amount to the estate is enforceable against the bankrupt’s total income. When obligation to pay ceases (16) If an opposition to the automatic discharge of a bankrupt individual who is required to pay an amount to the estate is filed, the bankrupt’s obligation under this section ceases on the day on which the bankrupt would have been automatically discharged had the opposition not been filed, but nothing in this subsection precludes the court from determining that the bankrupt is required to pay to the estate an amount that the court considers appropriate. 1992, c. 27, s. 36(1) 34. The portion of subsection 69(1) of the Act before paragraph (a) is replaced by the following: Stay of proceedings — notice of intention 69. (1) Subject to subsections (2) and (3) and sections 69.4, 69.5 and 69.6, on the filing of a notice of intention under section 50.4 by an insolvent person, 1992, c. 27, s. 36(1); 1997, c. 12, s. 63(1) 35. The portion of subsection 69.1(1) of the Act before paragraph (a) is replaced by the following: Stay of proceedings — Division I proposals 69.1 (1) Subject to subsections (2) to (6) and sections 69.4, 69.5 and 69.6, on the filing of a proposal under subsection 62(1) in respect of an insolvent person, 36. Subsection 69.3(1) of the French version of the Act, as enacted by subsection 62(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Suspension des procédures en cas de faillite 69.3 (1) Sous réserve des paragraphes (1.1) et (2) et des articles 69.4 et 69.5, à compter de la faillite du débiteur, ses créanciers n’ont aucun recours contre lui ou contre ses biens et ils ne peuvent intenter ou continuer aucune action, mesure d’exécution ou autre procédure en vue du recouvrement de réclamations prouvables en matière de faillite. 37. The Act is amended by adding the following after section 69.5: Meaning of “regulatory body” 69.6 (1) In this section, “regulatory body” means a person or body that has powers, duties or functions relating to the enforcement or administration of an Act of Parliament or of the legislature of a province and includes a person or body that is prescribed to be a regulatory body for the purpose of this Act. Regulatory bodies — sections 69 and 69.1 (2) Subject to subsection (3), no stay provided by section 69 or 69.1 affects a regulatory body’s investigation in respect of an insolvent person or an action, suit or proceeding that is taken in respect of the insolvent person by or before the regulatory body, other than the enforcement of a payment ordered by the regulatory body or the court. Exception (3) On application by the insolvent person and on notice to the regulatory body and to the persons who are likely to be affected by the order, the court may order that subsection (2) not apply in respect of one or more of the actions, suits or proceedings taken by or before the regulatory body if in the court’s opinion (a) a viable proposal could not be made in respect of the insolvent person if that subsection were to apply; and (b) it is not contrary to the public interest that the regulatory body be affected by the stay provided by section 69 or 69.1. Declaration — enforcement of a payment (4) If there is a dispute as to whether a regulatory body is seeking to enforce its rights as a creditor, the court may, on application by the insolvent person and on notice to the regulatory body, make an order declaring both that the regulatory body is seeking to enforce its rights as a creditor and that the enforcement of those rights is stayed. 38. Sections 81.3 and 81.4 of the Act, as enacted by section 67 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Security for unpaid wages, etc. — bankruptcy 81.3 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a bankrupt for services rendered during the period beginning on the day that is six months before the date of the initial bankruptcy event and ending on the date of the bankruptcy is secured, as of the date of the bankruptcy, to the extent of $2,000 — less any amount paid for those services by the trustee or by a receiver — by security on the bankrupt’s current assets on the date of the bankruptcy. Commissions (2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for during the period referred to in that subsection, are deemed to have been earned in that period. Security for disbursements (3) The claim of a travelling salesperson who is owed money by a bankrupt for disbursements properly incurred in and about the bankrupt’s business during the period referred to in subsection (1) is secured, as of the date of the bankruptcy, to the extent of $1,000 — less any amount paid for those disbursements by the trustee or by a receiver — by security on the bankrupt’s current assets on that date. Rank of security (4) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s current assets — regardless of when that other claim, right, charge or security arose — except rights under sections 81.1 and 81.2 and amounts referred to in subsection 67(3) that have been deemed to be held in trust. Liability of trustee (5) If the trustee disposes of current assets covered by the security, the trustee is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker in respect of the amounts paid to that person by the trustee. Claims of officers and directors (6) No officer or director of the bankrupt is entitled to have a claim secured under this section. Non-arm’s length (7) A person who, in respect of a transaction, was not dealing at arm’s length with the bankrupt is not entitled to have a claim arising from that transaction secured by this section unless, in the opinion of the trustee, having regard to the circumstances — including the remuneration for, the terms and conditions of and the duration, nature and importance of the services rendered — it is reasonable to conclude that they would have entered into a substantially similar transaction if they had been dealing with each other at arm’s length. Proof by delivery (8) A claim referred to in this section is proved by delivering to the trustee a proof of claim in the prescribed form. Definitions (9) The following definitions apply in this section. “compensation”« rémunération » “compensation” includes vacation pay but does not include termination or severance pay. “receiver”« séquestre » “receiver” means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1). Security for unpaid wages, etc. — receivership 81.4 (1) The claim of a clerk, servant, travelling salesperson, labourer or worker who is owed wages, salaries, commissions or compensation by a person who is subject to a receivership for services rendered during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $2,000 — less any amount paid for those services by a receiver or trustee — by security on the person’s current assets that are in the possession or under the control of the receiver. Commissions (2) For the purposes of subsection (1), commissions payable when goods are shipped, delivered or paid for, if shipped, delivered or paid for during the six-month period referred to in that subsection, are deemed to have been earned in those six months. Security for disbursements (3) The claim of a travelling salesperson who is owed money by a person who is subject to a receivership for disbursements properly incurred in and about the person’s business during the six months before the first day on which there was a receiver in relation to the person is secured, as of that day, to the extent of $1,000 — less any amount paid for those disbursements by a receiver or trustee — by security on the person’s current assets that are in the possession or under the control of the receiver. Rank of security (4) A security under this section ranks above every other claim, right, charge or security against the person’s current assets — regardless of when that other claim, right, charge or security arose — except rights under sections 81.1 and 81.2. Liability of receiver (5) If the receiver takes possession or in any way disposes of current assets covered by the security, the receiver is liable for the claim of the clerk, servant, travelling salesperson, labourer or worker to the extent of the amount realized on the disposition of the current assets and is subrogated in and to all rights of the clerk, servant, travelling salesperson, labourer or worker in respect of the amounts paid to that person by the receiver. Claims of officers and directors (6) No officer or director of the person who is subject to a receivership is entitled to have a claim secured under this section. Non-arm’s length (7) A person who, in respect of a transaction, was not dealing at arm’s length with a person who is subject to a receivership is not entitled to have a claim arising from that transaction secured by this section unless, in the opinion of the receiver, having regard to the circumstances — including the remuneration for, the terms and conditions of and the duration, nature and importance of the services rendered — it is reasonable to conclude that they would have entered into a substantially similar transaction if they had been dealing with each other at arm’s length. Proof by delivery (8) A claim referred to in this section is proved by delivering to the receiver a proof of claim in the prescribed form. Definitions (9) The following definitions apply in this section. “compensation”« rémunération » “compensation” includes vacation pay but does not include termination or severance pay. “person who is subject to a receivership”« personne faisant l’objet d’une mise sous séquestre » “person who is subject to a receivership” means a person any of whose property is in the possession or under the control of a receiver. “receiver”« séquestre » “receiver” means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1). 39. (1) The definition “receiver” in subsection 81.6(4) of the Act, as enacted by section 67 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: “receiver”« séquestre » “receiver” means a receiver within the meaning of subsection 243(2) or an interim receiver appointed under subsection 46(1), 47(1) or 47.1(1). (2) The definition “person who is subject to a receivership” in subsection 81.6(4) of the English version of the Act, as enacted by section 67 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: “person who is subject to a receivership”« personne faisant l’objet d’une mise sous séquestre » “person who is subject to a receivership” means a person any of whose property is in the possession or under the control of a receiver. 40. Sections 84.1 and 84.2 of the Act, as enacted by section 68 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Assignment of agreements 84.1 (1) On application by a trustee and on notice to every party to an agreement, a court may make an order assigning the rights and obligations of a bankrupt under the agreement to any person who is specified by the court and agrees to the assignment. Individuals (2) In the case of an individual, (a) they may not make an application under subsection (1) unless they are carrying on a business; and (b) only rights and obligations in relation to the business may be assigned. Exceptions (3) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under (a) an agreement entered into on or after the date of the bankruptcy; (b) an eligible financial contract within the meaning of subsection 65.1(8); or (c) a collective agreement. Factors to be considered (4) In deciding whether to make the order, the court is to consider, among other things, (a) whether the person to whom the rights and obligations are to be assigned is able to perform the obligations; and (b) whether it is appropriate to assign the rights and obligations to that person. Restriction (5) The court may not make the order unless it is satisfied that all monetary defaults in relation to the agreement — other than those arising by reason only of the person’s bankruptcy, insolvency or failure to perform a non-monetary obligation — will be remedied on or before the day fixed by the court. Copy of order (6) The applicant is to send a copy of the order to every party to the agreement. Certain rights limited 84.2 (1) No person may terminate or amend — or claim an accelerated payment or forfeiture of the term under — any agreement, including a security agreement, with a bankrupt individual by reason only of the individual’s bankruptcy or insolvency. Lease (2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend, or claim an accelerated payment or forfeiture of the term under, the lease by reason only of the bankruptcy or insolvency or of the fact that the bankrupt has not paid rent in respect of any period before the time of the bankruptcy. Public utilities (3) No public utility may discontinue service to a bankrupt individual by reason only of the individual’s bankruptcy or insolvency or of the fact that the bankrupt individual has not paid for services rendered or material provided before the time of the bankruptcy. Certain acts not prevented (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 time of the bankruptcy; or (b) requiring the further advance of money or credit. Provisions of section override agreement (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. Powers of court (6) On application by a party to an agreement or by a public utility, the court may 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. Eligible financial contracts (7) Subsection (1) (a) does not apply in respect of an eligible financial contract within the meaning of subsection 65.1(8); and (b) does not prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for an insolvent person in accordance with the Canadian Payments Act and the by-laws and rules of that Association. 41. The heading “Preferences” of the Act, as enacted by section 71 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Preferences and Transfers at Undervalue 1997, c. 12, s. 78(2); 2004, c. 25, s. 56 42. Subsections 95(1) to (2.1) of the Act are replaced by the following: Preferences 95. (1) A transfer of property made, a provision of services made, a charge on property made, a payment made, an obligation incurred or a judicial proceeding taken or suffered by an insolvent person (a) in favour of a creditor who is dealing at arm’s length with the insolvent person, or a person in trust for that creditor, with a view to giving that creditor a preference over another creditor is void as against — or, in Quebec, may not be set up against — the trustee if it is made, incurred, taken or suffered, as the case may be, during the period beginning on the day that is three months before the date of the initial bankruptcy event and ending on the date of the bankruptcy; and (b) in favour of a creditor who is not dealing at arm’s length with the insolvent person, or a person in trust for that creditor, that has the effect of giving that creditor a preference over another creditor is void as against — or, in Quebec, may not be set up against — the trustee if it is made, incurred, taken or suffered, as the case may be, during the period beginning on the day that is 12 months before the date of the initial bankruptcy event and ending on the date of the bankruptcy. Preference presumed (2) If the transfer, charge, payment, obligation or judicial proceeding referred to in paragraph (1)(a) has the effect of giving the creditor a preference, it is, in the absence of evidence to the contrary, presumed to have been made, incurred, taken or suffered with a view to giving the creditor the preference — even if it was made, incurred, taken or suffered, as the case may be, under pressure — and evidence of pressure is not admissible to support the transaction. Exception — margin deposits (2.1) In the case of a margin deposit made by a clearing member with a clearing house, the clearing member and the clearing house are deemed to be dealing with each other at arm’s length and subsection (2) does not apply. 43. Sections 96 and 96.1 of the Act, as enacted by section 73 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Transfer at undervalue 96. (1) On application by the trustee, a court may declare that a transfer at undervalue is void as against, or, in Quebec, may not be set up against, the trustee — or order that a party to the transfer or any other person who is privy to the transfer, or all of those persons, pay to the estate the difference between the value of the consideration received by the debtor and the value of the consideration given by the debtor — if (a) the party was dealing at arm’s length with the debtor and (i) the transfer occurred during the period that begins on the day that is one year before the date of the initial bankruptcy event and that ends on the date of the bankruptcy, (ii) the debtor was insolvent at the time of the transfer or was rendered insolvent by it, and (iii) the debtor intended to defraud, defeat or delay a creditor; or (b) the party was not dealing at arm’s length with the debtor and (i) the transfer occurred during the period that begins on the day that is one year before the date of the initial bankruptcy event and ends on the date of the bankruptcy, or (ii) the transfer occurred during the period that begins on the day that is five years before the date of the initial bankruptcy event and ends on the day before the day on which the period referred to in subparagraph (i) begins and (A) the debtor was insolvent at the time of the transfer or was rendered insolvent by it, or (B) the debtor intended to defraud, defeat or delay a creditor. Establishing values (2) In making the application referred to in this section, the trustee shall state what, in the trustee’s opinion, was the fair market value of the property or services and what, in the trustee’s opinion, was the value of the actual consideration given or received by the debtor, and the values on which the court makes any finding under this section are, in the absence of evidence to the contrary, the values stated by the trustee. Meaning of “person who is privy” (3) In this section, a “person who is privy” means a person who is not dealing at arm’s length with a party to a transfer and, by reason of the transfer, directly or indirectly, receives a benefit or causes a benefit to be received by another person. 1992, c. 27, s. 42(1); 2004, c. 25, s. 62 44. Sections 101.1 and 101.2 of the Act are replaced by the following: Application of sections 95 to 101 101.1 (1) Sections 95 to 101 apply, with any modifications that the circumstances require, to a proposal made under Division I of Part III unless the proposal provides otherwise. Interpretation (2) For the purposes of subsection (1), a reference in sections 95 to 101 (a) to “date of the bankruptcy” is to be read as a reference to “day on which a notice of intention is filed” or, if a notice of intention is not filed, as a reference to “day on which a proposal is filed”; and (b) to “bankrupt”, “insolvent person” or “debtor” is to be read as a reference to “debtor in respect of whom the proposal is filed”. Application of sections 95 to 101 if proposal annulled (3) If the proposal is annulled by the court under subsection 63(1) or as a result of a bankruptcy order or assignment, sections 95 to 101 apply as though the debtor became bankrupt on the date of the initial bankruptcy event. 45. Subsection 109(6) of the Act, as enacted by subsection 80(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Vote of creditors not dealing at arm’s length (6) If the chair is of the opinion that the outcome of a vote was determined by the vote of a creditor who did not deal with the debtor at arm’s length at any time during the period that begins on the day that is one year before the date of the initial bankruptcy event and that ends on the date of the bankruptcy, the chair shall redetermine the outcome by excluding the creditor’s vote. The redetermined outcome is the outcome of the vote unless a court, on application within 10 days after the day on which the chair redetermined the outcome of the vote, considers it appropriate to include the creditor’s vote and determines another outcome. 46. The Act is amended by adding the following after section 115: Court order — interlocutory or permanent 115.1 In an application to revoke or vary a decision that affects or could affect the outcome of a vote, the court may make any order that it considers appropriate, including one that suspends the effect of the vote until the application is determined and one that redetermines the outcome of the vote. 2000, c. 12, s. 15 47. Subsection 137(2) of the Act is repealed. 2000, c. 12, s. 16 48. Section 138 of the Act is repealed. 49. Section 140.1 of the Act, as enacted by section 90 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Postponement of equity claims 140.1 A creditor is not entitled to a dividend in respect of an equity claim until all claims that are not equity claims have been satisfied. 2004, c. 25, s. 72(E) 50. Section 146 of the Act is replaced by the following: Application of provincial law to lessors’ rights 146. Subject to priority of ranking as provided by section 136 and subject to subsection 73(4) and section 84.1, the rights of lessors are to be determined according to the law of the province in which the leased premises are situated. 1997, c. 12, s. 91 51. (1) Subsection 149(3) of the Act is repealed. (2) Subsections 149(4) and (5) of the Act, as enacted by subsection 92(2) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Certain federal claims (3) Despite subsection (2), a claim may be filed for an amount payable under the following Acts or provisions within the time limit referred to in subsection (2) — or within three months after the return of income or other evidence of the facts on which the claim is based is filed or comes to the attention of the Minister of National Revenue or, in the case of an amount payable under legislation referred to in paragraph (c), the minister in that province responsible for the legislation: (a) the Income Tax Act; (b) any provision of the Canada Pension Plan or Employment Insurance Act that refers to the Income Tax Act and provides for the collection of a contribution as defined in the Canada Pension Plan or an employee’s premium, or employer’s premium, as defined in the Employment Insurance Act, and of any related interest, penalties or other amounts; (c) any provincial legislation that has a purpose similar to the Income Tax Act, or that refers to that Act, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, if the sum (i) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or (ii) is of the same nature as a contribution under the Canada Pension Plan if the province is a “province providing a comprehensive pension plan” as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a “provincial pension plan” as defined in that subsection; (d) the Excise Tax Act; (e) the Excise Act, 2001; (f) the Customs Act; and (g) the Air Travellers Security Charge Act. No dividend allowed (4) Unless the trustee retains sufficient funds to provide for payment of any claims that may be filed under legislation referred to in subsection (3), no dividend is to be declared until the expiry of three months after the trustee has filed all returns that the trustee is required to file. 52. The portion of subsection 172(2) of the Act before paragraph (a), as enacted by subsection 104(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Powers of court to refuse or suspend discharge or grant conditional discharge (2) The court shall, on proof of any of the facts referred to in section 173, which proof may be given orally under oath, by affidavit or otherwise, 53. (1) The portion of subsection 172.1(1) of the French version of the Act before paragraph (a), as enacted by section 105 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Exception — failli ayant une dette fiscale 172.1 (1) Dans le cas d’un failli qui a une dette fiscale impayée d’un montant de deux cent mille dollars ou plus représentant soixante-quinze pour cent ou plus de la totalité des réclamations non garanties prouvées, l’audition de la demande de libération ne peut se tenir avant l’expiration : (2) Subsection 172.1(8) of the Act, as enacted by section 105 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Meaning of “personal income tax debt” (8) For the purpose of this section, “personal income tax debt” means the amount payable, within the meaning of subsection 223(1) of the Income Tax Act without reference to paragraphs (b) to (c), by an individual and the amount payable by an individual under any provincial legislation that imposes a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, including, for greater certainty, the amount of any interest, penalties or fines imposed under the Income Tax Act or the provincial legislation. It does not include an amount payable by the individual if the individual is or was a director of a corporation and the amount relates to an obligation of the corporation for which the director is liable in their capacity as director. 54. Paragraph 178(1)(e) of the Act, as enacted by subsection 107(1) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (e) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability that arises from an equity claim; 1997, c. 12, s. 114 55. Section 216 of the Act is repealed. 56. Subsection 219(1) of the Act is replaced by the following: Application for consolidation order 219. (1) A debtor who resides in a province in respect of which this Part applies may apply to the clerk of the court having jurisdiction where they reside for a consolidation order. 2002, c. 7, s. 85 57. Section 242 of the Act is replaced by the following: Application of this Part 242. (1) The Governor in Council shall, at the request of the lieutenant governor in council of a province, declare, by order, that this Part applies or ceases to apply, as the case may be, in respect of the province. Automatic application (2) Subject to an order being made under subsection (1) declaring that this Part ceases to apply in respect of a province, if this Part is in force in the province immediately before that subsection comes into force, this Part applies in respect of the province. 58. (1) Subsections 243(1) and (2) of the Act, as enacted by subsection 115(1) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Court may appoint receiver 243. (1) Subject to subsection (1.1), on application by a secured creditor, a court may appoint a receiver to do any or all of the following if it considers it to be just or convenient to do so: (a) take possession of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt; (b) exercise any control that the court considers advisable over that property and over the insolvent person’s or bankrupt’s business; or (c) take any other action that the court considers advisable. Restriction on appointment of receiver (1.1) In the case of an insolvent person in respect of whose property a notice is to be sent under subsection 244(1), the court may not appoint a receiver under subsection (1) before the expiry of 10 days after the day on which the secured creditor sends the notice unless (a) the insolvent person consents to an earlier enforcement under subsection 244(2); or (b) the court considers it appropriate to appoint a receiver before then. Definition of “receiver” (2) Subject to subsections (3) and (4), in this Part, “receiver” means a person who (a) is appointed under subsection (1); or (b) is appointed to take or takes possession or control — of all or substantially all of the inventory, accounts receivable or other property of an insolvent person or bankrupt that was acquired for or used in relation to a business carried on by the insolvent person or bankrupt — under (i) an agreement under which property becomes subject to a security (in this Part referred to as a “security agreement”), or (ii) a court order made under another Act of Parliament, or an Act of a legislature of a province, that provides for or authorizes the appointment of a receiver or receiver-manager. 1992, c. 27, s. 89(1) (2) Subsection 243(3) of the Act is replaced by the following: Definition of “receiver” — subsection 248(2) (3) For the purposes of subsection 248(2), the definition “receiver” in subsection (2) is to be read without reference to paragraph (a) or subparagraph (b)(ii). (3) Subsection 243(4) of the Act, as enacted by subsection 115(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Trustee to be appointed (4) Only a trustee may be appointed under subsection (1) or under an agreement or order referred to in paragraph (2)(b). Place of filing (5) The application is to be filed in a court having jurisdiction in the judicial district of the locality of the debtor. Orders respecting fees and disbursements (6) If a receiver is appointed under subsection (1), the court may make any order respecting the payment of fees and disbursements of the receiver that it considers proper, including one that gives the receiver a charge, ranking ahead of any or all of the secured creditors, over all or part of the property of the insolvent person or bankrupt in respect of the receiver’s claim for fees or disbursements, but the court may not make the order unless it is satisfied that the secured creditors who would be materially affected by the order were given reasonable notice and an opportunity to make representations. Meaning of “disbursements” (7) In subsection (6), “disbursements” does not include payments made in the operation of a business of the insolvent person or bankrupt. 59. Section 275 of the Act, as enacted by section 122 of chapter 47 of the Statutes of Canada, 2005, is amended by adding the following after subsection (2): Forms of cooperation (3) For the purpose of this section, cooperation may be provided by any appropriate means, including (a) the appointment of a person to act at the direction of the court; (b) the communication of information by any means considered appropriate by the court; (c) the coordination of the administration and supervision of the debtor’s assets and affairs; (d) the approval or implementation by courts of agreements concerning the coordination of proceedings; and (e) the coordination of concurrent proceedings regarding the same debtor. 60. Subsection 284(2) of the Act, as enacted by section 122 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Public policy exception (2) Nothing in this Part prevents the court from refusing to do something that would be contrary to public policy. R.S., c. C-36 COMPANIES’ CREDITORS ARRANGEMENT ACT 61. (1) The definition “shareholder” in subsection 2(1) of the Companies’ Creditors Arrangement Act, as enacted by subsection 124(2) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: “shareholder”« actionnaire » “shareholder” includes a member of a company — and, in the case of an income trust, a holder of a unit in an income trust — to which this Act applies; (2) The definitions “director” and “income trust” in subsection 2(1) of the Act, as enacted by subsection 124(3) of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: “director”« administrateur » “director” means, in the case of a company other than an income trust, a person occupying the position of director by whatever name called and, in the case of an income trust, a person occupying the position of trustee by whatever named called; “income trust”« fiducie de revenu » “income trust” means a trust that has assets in Canada if (a) its units are listed on a prescribed stock exchange on the day on which proceedings commence under this Act, or (b) the majority of its units are held by a trust whose units are listed on a prescribed stock exchange on the day on which proceedings commence under this Act; (3) The definition “agent négociateur” in subsection 2(1) of the French version of the Act, as enacted by subsection 124(3) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: « agent négociateur »“bargaining agent” « agent négociateur » Syndicat ayant conclu une convention collective pour le compte des employés d’une compagnie. (4) Subsection 2(2) of the Act, as enacted by subsection 124(5) of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Meaning of “related” and “dealing at arm’s length” (2) For the purpose of this Act, section 4 of the Bankruptcy and Insolvency Act applies for the purpose of determining whether a person is related to or dealing at arm’s length with a debtor company. 62. Paragraph 11.02(3)(b) of the French version of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: b) dans le cas de l’ordonnance visée au paragraphe (2), le demandeur le convainc en outre qu’il a agi et continue d’agir de bonne foi et avec la diligence voulue. 63. (1) Subsection 11.05(1) of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Eligible financial contracts 11.05 (1) No order may be made under this Act that has the effect of staying or restraining the exercise of a right to terminate or amend an eligible financial contract or claim an accelerated payment or a forfeiture of the term under it. (2) The definition “eligible financial contract” in subsection 11.05(3) of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: “eligible financial contract”« contrat financier admissible » “eligible financial contract” means an agreement of a prescribed kind. 64. Section 11.06 of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Member of the Canadian Payments Association 11.06 No order may be made under this Act that has the effect of preventing a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for a company in accordance with the Canadian Payments Act or the by-laws or rules of that Association. 65. Sections 11.1 to 11.4 of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Meaning of “regulatory body” 11.1 (1) In this section, “regulatory body” means a person or body that has powers, duties or functions relating to the enforcement or administration of an Act of Parliament or of the legislature of a province and includes a person or body that is prescribed to be a regulatory body for the purpose of this Act. Regulatory bodies — order under section 11.02 (2) Subject to subsection (3), no order made under section 11.02 affects a regulatory body’s investigation in respect of the debtor company or an action, suit or proceeding that is taken in respect of the company by or before the regulatory body, other than the enforcement of a payment ordered by the regulatory body or the court. Exception (3) On application by the company and on notice to the regulatory body and to the persons who are likely to be affected by the order, the court may order that subsection (2) not apply in respect of one or more of the actions, suits or proceedings taken by or before the regulatory body if in the court’s opinion (a) a viable compromise or arrangement could not be made in respect of the company if that subsection were to apply; and (b) it is not contrary to the public interest that the regulatory body be affected by the order made under section 11.02. Declaration — enforcement of a payment (4) If there is a dispute as to whether a regulatory body is seeking to enforce its rights as a creditor, the court may, on application by the company and on notice to the regulatory body, make an order declaring both that the regulatory body is seeking to enforce its rights as a creditor and that the enforcement of those rights is stayed. Interim financing 11.2 (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, a court may make an order declaring that all or part of the company’s property is subject to a security or charge — in an amount that the court considers appropriate — in favour of a person specified in the order who agrees to lend to the company an amount approved by the court as being required by the company, having regard to its cash-flow statement. The security or charge may not secure an obligation that exists before the order is made. Priority — secured creditors (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. Priority — other orders (3) The court may order that the security or charge rank in priority over any security or charge arising from a previous order made under subsection (1) only with the consent of the person in whose favour the previous order was made. Factors to be considered (4) In deciding whether to make an order, the court is to consider, among other things, (a) the period during which the company is expected to be subject to proceedings under this Act; (b) how the company’s business and financial affairs are to be managed during the proceedings; (c) whether the company’s management has the confidence of its major creditors; (d) whether the loan would enhance the prospects of a viable compromise or arrangement being made in respect of the company; (e) the nature and value of the company’s property; (f) whether any creditor would be materially prejudiced as a result of the security or charge; and (g) the monitor’s report referred to in paragraph 23(1)(b), if any. Assignment of agreements 11.3 (1) On application by a debtor company and on notice to every party to an agreement and the monitor, the court may make an order assigning the rights and obligations of the company under the agreement to any person who is specified by the court and agrees to the assignment. Exceptions (2) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under (a) an agreement entered into on or after the day on which proceedings commence under this Act; (b) an eligible financial contract within the meaning of subsection 11.05(3); or (c) a collective agreement. Factors to be considered (3) In deciding whether to make the order, the court is to consider, among other things, (a) whether the monitor approved the proposed assignment; (b) whether the person to whom the rights and obligations are to be assigned would be able to perform the obligations; and (c) whether it would be appropriate to assign the rights and obligations to that person. Restriction (4) The court may not make the order unless it is satisfied that all monetary defaults in relation to the agreement — other than those arising by reason only of the company’s insolvency, the commencement of proceedings under this Act or the company’s failure to perform a non-monetary obligation — will be remedied on or before the day fixed by the court. Copy of order (5) The applicant is to send a copy of the order to every party to the agreement. Critical supplier 11.4 (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring a person to be a critical supplier to the company if the court is satisfied that the person is a supplier of goods or services to the company and that the goods or services that are supplied are critical to the company’s continued operation. Obligation to supply (2) If the court declares a person to be a critical supplier, the court may make an order requiring the person to supply any goods or services specified by the court to the company on any terms and conditions that are consistent with the supply relationship or that the court considers appropriate. Security or charge in favour of critical supplier (3) If the court makes an order under subsection (2), the court shall, in the order, declare that all or part of the property of the company is subject to a security or charge in favour of the person declared to be a critical supplier, in an amount equal to the value of the goods or services supplied under the terms of the order. Priority (4) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. 66. Sections 11.51 and 11.52 of the Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: Security or charge relating to director’s indemnification 11.51 (1) On application by a debtor company and on notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of the company is subject to a security or charge — in an amount that the court considers appropriate — in favour of any director or officer of the company to indemnify the director or officer against obligations and liabilities that they may incur as a director or officer of the company after the commencement of proceedings under this Act. Priority (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. Restriction — indemnification insurance (3) The court may not make the order if in its opinion the company could obtain adequate indemnification insurance for the director or officer at a reasonable cost. Negligence, misconduct or fault (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 officer if in its opinion the obligation or liability was incurred as a result of the director’s or officer’s gross negligence or wilful misconduct or, in Quebec, the director’s or officer’s gross or intentional fault. Court may order security or charge to cover certain costs 11.52 (1) On notice to the secured creditors who are likely to be affected by the security or charge, the court may make an order declaring that all or part of the property of a debtor company is subject to a security or charge — in an amount that the court considers appropriate — in respect of the fees and expenses of (a) the monitor, including the fees and expenses of any financial, legal or other experts engaged by the monitor in the performance of the monitor’s duties; (b) any financial, legal or other experts engaged by the company for the purpose of proceedings under this Act; and (c) any financial, legal or other experts engaged by any other interested person if the court is satisfied that the security or charge is necessary for their effective participation in proceedings under this Act. Priority (2) The court may order that the security or charge rank in priority over the claim of any secured creditor of the company. 1997, c. 12, s. 124 67. Subsections 11.8(1) and (2) of the Act are replaced by the following: No personal liability in respect of matters before appointment 11.8 (1) Despite anything in federal or provincial law, if a monitor, in that position, carries on the business of a debtor company or continues the employment of a debtor company’s employees, the monitor is not by reason of that fact personally liable in respect of a liability, including one as a successor employer, (a) that is in respect of the employees or former employees of the company or a predecessor of the company or in respect of a pension plan for the benefit of those employees; and (b) that exists before the monitor is appointed or that is calculated by reference to a period before the appointment. Status of liability (2) A liability referred to in subsection (1) shall not rank as costs of administration. Liability of other successor employers (2.1) Subsection (1) does not affect the liability of a successor employer other than the monitor. 68. Section 12 of the Act, as enacted by section 130 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Fixing deadlines 12. The court may fix deadlines for the purposes of voting and for the purposes of distributions under a compromise or arrangement. 69. Section 19 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Claims that may be dealt with by a compromise or arrangement 19. (1) Subject to subsection (2), the only claims that may be dealt with by a compromise or arrangement in respect of a debtor company are (a) claims that relate to debts or liabilities, present or future, to which the company is subject on the earlier of (i) the day on which proceedings commenced under this Act, and (ii) if the company filed a notice of intention under section 50.4 of the Bankruptcy and Insolvency Act or commenced proceedings under this Act with the consent of inspectors referred to in section 116 of the Bankruptcy and Insolvency Act, the date of the initial bankruptcy event within the meaning of section 2 of that Act; and (b) claims that relate to debts or liabilities, present or future, to which the company may become subject before the compromise or arrangement is sanctioned by reason of any obligation incurred by the company before the earlier of the days referred to in subparagraphs (a)(i) and (ii). Exception (2) A compromise or arrangement in respect of a debtor company may not deal with any claim that relates to any of the following debts or liabilities unless the compromise or arrangement explicitly provides for the claim’s compromise and the creditor in relation to that debt has voted for the acceptance of the compromise or arrangement: (a) any fine, penalty, restitution order or other order similar in nature to a fine, penalty or restitution order, imposed by a court in respect of an offence; (b) any award of damages by a court in civil proceedings in respect of (i) bodily harm intentionally inflicted, or sexual assault, or (ii) wrongful death resulting from an act referred to in subparagraph (i); (c) any debt or liability arising out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity or, in Quebec, as a trustee or an administrator of the property of others; (d) any debt or liability resulting from obtaining property or services by false pretences or fraudulent misrepresentation, other than a debt or liability of the company that arises from an equity claim; or (e) any debt for interest owed in relation to an amount referred to in any of paragraphs (a) to (d). 70. Subsection 20(3) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is repealed. 71. Section 22 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Company may establish classes 22. (1) A debtor company may divide its creditors into classes for the purpose of a meeting to be held under section 4 or 5 in respect of a compromise or arrangement relating to the company and, if it does so, it is to apply to the court for approval of the division before the meeting is held. Factors (2) For the purpose of subsection (1), creditors may be included in the same class if their interests or rights are sufficiently similar to give them a commonality of interest, taking into account (a) the nature of the debts, liabilities or obligations giving rise to their claims; (b) the nature and rank of any security in respect of their claims; (c) the remedies available to the creditors in the absence of the compromise or arrangement being sanctioned, and the extent to which the creditors would recover their claims by exercising those remedies; and (d) any further criteria, consistent with those set out in paragraphs (a) to (c), that are prescribed. Related creditors (3) A creditor who is related to the company may vote against, but not for, a compromise or arrangement relating to the company. Class — creditors having equity claims 22.1 Despite subsection 22(1), creditors having equity claims are to be in the same class of creditors in relation to those claims unless the court orders otherwise and may not, as members of that class, vote at any meeting unless the court orders otherwise. 72. (1) Subparagraph 23(1)(a)(ii) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (ii) within five days after the day on which the order is made, (A) make the order publicly available in the prescribed manner, (B) send, in the prescribed manner, a notice to every known creditor who has a claim against the company of more than $1,000 advising them that the order is publicly available, and (C) prepare a list, showing the names and addresses of those creditors and the estimated amounts of those claims, and make it publicly available in the prescribed manner; (2) Paragraphs 23(1)(d) to (f) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, are replaced by the following: (d) file a report with the court on the state of the company’s business and financial affairs — containing the prescribed information, if any — (i) without delay after ascertaining a material adverse change in the company’s projected cash-flow or financial circumstances, (ii) not later than 45 days, or any longer period that the court may specify, after the day on which each of the company’s fiscal quarters ends, and (iii) at any other time that the court may order; (d.1) file a report with the court on the state of the company’s business and financial affairs — containing the monitor’s opinion as to the reasonableness of a decision, if any, to include in a compromise or arrangement a provision that sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act do not apply in respect of the compromise or arrangement and containing the prescribed information, if any — at least seven days before the day on which the meeting of creditors referred to in section 4 or 5 is to be held; (e) advise the company’s creditors of the filing of the report referred to in any of paragraphs (b) to (d.1); (f) file with the Superintendent of Bankruptcy, in the prescribed manner and at the prescribed time, a copy of the documents specified in the regulations; (f.1) for the purpose of defraying the expenses of the Superintendent of Bankruptcy incurred in performing his or her functions under this Act, pay the prescribed levy at the prescribed time to the Superintendent for deposit with the Receiver General; (3) Paragraph 23(1)(j) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: (j) make the prescribed documents publicly available in the prescribed manner and at the prescribed time and provide the company’s creditors with information as to how they may access those documents; and (4) Subsection 23(2) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Monitor not liable (2) If the monitor acts in good faith and takes reasonable care in preparing the report referred to in any of paragraphs (1)(b) to (d.1), the monitor is not liable for loss or damage to any person resulting from that person’s reliance on the report. 73. Section 26 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is amended by adding the following after subsection (2): Agreement to provide compilation (3) The Superintendent of Bankruptcy may enter into an agreement to provide a compilation of all or part of the information that is contained in the public record. 74. (1) Subsection 29(2) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Rights (2) For the purpose of the inquiry or investigation, the Superintendent of Bankruptcy or any person whom he or she appoints for the purpose (a) shall have access to and the right to examine and make copies of the books, records, data, documents or papers — including those in electronic form — in the possession or under the control of a monitor under this Act; and (b) may, with the leave of the court granted on an ex parte application, examine the books, records, data, documents or papers — including those in electronic form — relating to any compromise or arrangement in respect of which this Act applies that are in the possession or under the control of any other person designated in the order granting the leave, and for that purpose may under a warrant from the court enter and search any premises. (2) Subsection 29(3) of the French version of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Personnel (3) Le surintendant des faillites peut retenir les services des experts ou autres personnes et du personnel administratif dont il estime le concours utile à l’investigation ou l’enquête et fixer leurs fonctions et leurs conditions d’emploi. La rémunération et les indemnités dues à ces personnes sont, une fois certifiées par le surintendant, imputables sur les crédits affectés à son bureau. 75. (1) Subsection 30(3) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Summons (3) The Superintendent of Bankruptcy may, for the purpose of the hearing, issue a summons requiring the person named in it (a) to appear at the time and place mentioned in it; (b) to testify to all matters within their knowledge relative to the subject matter of the inquiry or investigation into the conduct of the monitor; and (c) to bring and produce any books, records, data, documents or papers — including those in electronic form — in their possession or under their control relative to the subject matter of the inquiry or investigation. (2) Subsection 30(4) of the English version of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Effect throughout Canada (4) A person may be summoned from any part of Canada by virtue of a summons issued under subsection (3). 76. Section 32 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Disclaimer or resiliation of agreements 32. (1) Subject to subsections (2) and (3), a debtor company may — on notice given in the prescribed form and manner to the other parties to the agreement and the monitor — disclaim or resiliate any agreement to which the company is a party on the day on which proceedings commence under this Act. The company may not give notice unless the monitor approves the proposed disclaimer or resiliation. Court may prohibit disclaimer or resiliation (2) Within 15 days after the day on which the company gives notice under subsection (1), a party to the agreement may, on notice to the other parties to the agreement and the monitor, apply to a court for an order that the agreement is not to be disclaimed or resiliated. Court-ordered disclaimer or resiliation (3) If the monitor does not approve the proposed disclaimer or resiliation, the company may, on notice to the other parties to the agreement and the monitor, apply to a court for an order that the agreement be disclaimed or resiliated. Factors to be considered (4) In deciding whether to make the order, the court is to consider, among other things, (a) whether the monitor approved the proposed disclaimer or resiliation; (b) whether the disclaimer or resiliation would enhance the prospects of a viable compromise or arrangement being made in respect of the company; and (c) whether the disclaimer or resiliation would likely cause significant financial hardship to a party to the agreement. Date of disclaimer or resiliation (5) An agreement is disclaimed or resiliated (a) if no application is made under subsection (2), on the day that is 30 days after the day on which the company gives notice under subsection (1); (b) if the court dismisses the application made under subsection (2), on the day that is 30 days after the day on which the company gives notice under subsection (1) or on any later day fixed by the court; or (c) if the court orders that the agreement is disclaimed or resiliated under subsection (3), on the day that is 30 days after the day on which the company gives notice or on any later day fixed by the court. Intellectual property (6) If the company has granted a right to use intellectual property to a party to an agreement, the disclaimer or resiliation does not affect the party’s right to use the intellectual property — including the party’s right to enforce an exclusive use — during the term of the agreement, including any period for which the party extends the agreement as of right, as long as the party continues to perform its obligations under the agreement in relation to the use of the intellectual property. Loss related to disclaimer or resiliation (7) If an agreement is disclaimed or resiliated, a party to the agreement who suffers a loss in relation to the disclaimer or resiliation is considered to have a provable claim. Reasons for disclaimer or resiliation (8) A company shall, on request by a party to the agreement, provide in writing the reasons for the proposed disclaimer or resiliation within five days after the day on which the party requests them. Exceptions (9) This section does not apply in respect of (a) an eligible financial contract within the meaning of subsection 11.05(3); (b) a collective agreement; (c) a financing agreement if the company is the borrower; or (d) a lease of real property or of an immovable if the company is the lessor. 77. Section 34 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Certain rights limited 34. (1) No person may terminate or amend, or claim an accelerated payment or forfeiture of the term under, any agreement, including a security agreement, with a debtor company by reason only that proceedings commenced under this Act or that the company is insolvent. Lease (2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend the lease by reason only that proceedings commenced under this Act, that the company is insolvent or that the company has not paid rent in respect of any period before the commencement of those proceedings. Public utilities (3) No public utility may discontinue service to a company by reason only that proceedings commenced under this Act, that the company is insolvent or that the company has not paid for services rendered or goods provided before the commencement of those proceedings. Certain acts not prevented (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 commencement of proceedings under this Act; (b) requiring the further advance of money or credit; or (c) preventing a lessor of aircraft objects under an agreement with the company from taking possession of the aircraft objects (i) if, after proceedings commence under this Act, the company defaults in protecting or maintaining the aircraft objects in accordance with the agreement, (ii) 60 days after the day on which proceedings commence under this Act unless, during that period, the company (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 company’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 company’s financial condition, until the proceedings under this Act end, and (C) agreed to perform all of 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 company defaults in performing an obligation under the agreement, other than an obligation not to become insolvent or an obligation relating to the company’s financial condition. Provisions of section override agreement (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. Powers of court (6) On application by a party to an agreement or by a public utility, the court may 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. Eligible financial contracts (7) Subsection (1) (a) does not apply in respect of an eligible financial contract within the meaning of subsection 11.05(3); and (b) does not prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for an insolvent person in accordance with the Canadian Payments Act or the by-laws or rules of that Association. 78. Section 36 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Restriction on disposition of business assets 36. (1) A debtor company in respect of which an order has been made under this Act may not sell or otherwise dispose of assets outside the ordinary course of business unless authorized to do so by a court. Despite any requirement for shareholder approval, including one under federal or provincial law, the court may authorize the sale or disposition even if shareholder approval was not obtained. Notice to creditors (2) A company that applies to the court for an authorization is to give notice of the application to the secured creditors who are likely to be affected by the proposed sale or disposition. Factors to be considered (3) In deciding whether to grant the authorization, the court is to consider, among other things, (a) whether the process leading to the proposed sale or disposition was reasonable in the circumstances; (b) whether the monitor approved the process leading to the proposed sale or disposition; (c) whether the monitor filed with the court a report stating that in their opinion the sale or disposition would be more beneficial to the creditors than a sale or disposition under a bankruptcy; (d) the extent to which the creditors were consulted; (e) the effects of the proposed sale or disposition on the creditors and other interested parties; and (f) whether the consideration to be received for the assets is reasonable and fair, taking into account their market value. Additional factors — related persons (4) If the proposed sale or disposition is to a person who is related to the company, the court may, after considering the factors referred to in subsection (3), grant the authorization only if it is satisfied that (a) good faith efforts were made to sell or otherwise dispose of the assets to persons who are not related to the company; and (b) the consideration to be received is superior to the consideration that would be received under any other offer made in accordance with the process leading to the proposed sale or disposition. Related persons (5) For the purpose of subsection (4), a person who is related to the company includes (a) a director or officer of the company; (b) a person who has or has had, directly or indirectly, control in fact of the company; and (c) a person who is related to a person described in paragraph (a) or (b). Assets may be disposed of free and clear (6) The court may authorize a sale or disposition free and clear of any security, charge or other restriction and, if it does, it shall also order that other assets of the company or the proceeds of the sale or disposition be subject to a security, charge or other restriction in favour of the creditor whose security, charge or other restriction is to be affected by the order. Restriction — employers (7) The court may grant the authorization only if the court is satisfied that the company can and will make the payments that would have been required under paragraphs 6(4)(a) and (5)(a) if the court had sanctioned the compromise or arrangement. Preferences and Transfers at Undervalue Application of sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act 36.1 (1) Sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act apply, with any modifications that the circumstances require, in respect of a compromise or arrangement unless the compromise or arrangement provides otherwise. Interpretation (2) For the purposes of subsection (1), a reference in sections 38 and 95 to 101 of the Bankruptcy and Insolvency Act (a) to “date of the bankruptcy” is to be read as a reference to “day on which proceedings commence under this Act”; (b) to “trustee” is to be read as a reference to “monitor”; and (c) to “bankrupt”, “insolvent person” or “debtor” is to be read as a reference to “debtor company”. 79. Subsection 39(1) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Statutory Crown securities 39. (1) In relation to proceedings under this Act in respect of a debtor company, 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 a province or a workers’ compensation body is valid in relation to claims against the company only if, before the day on which proceedings commence, the security is registered under a system of registration of securities that is available not only to Her Majesty in right of Canada or a province or a workers’ compensation body, but also to any other creditor who holds a security, and that is open to the public for information or the making of searches. 80. Section 52 of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is amended by adding the following after subsection (2): Forms of cooperation (3) For the purpose of this section, cooperation may be provided by any appropriate means, including (a) the appointment of a person to act at the direction of the court; (b) the communication of information by any means considered appropriate by the court; (c) the coordination of the administration and supervision of the debtor company’s assets and affairs; (d) the approval or implementation by courts of agreements concerning the coordination of proceedings; and (e) the coordination of concurrent proceedings regarding the same debtor company. 81. Subsection 61(2) of the Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Public policy exception (2) Nothing in this Part prevents the court from refusing to do something that would be contrary to public policy. 82. The portion of section 62 of the Act before paragraph (a), as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, is replaced by the following: Regulations 62. The Governor in Council may make regulations for carrying out the purposes and provisions of this Act, including regulations 2005, c. 47, s. 1 WAGE EARNER PROTECTION PROGRAM ACT 83. Section 2 of the Wage Earner Protection Program Act is amended by adding the following after subsection (4): Related persons (5) Despite subsection 4(5) of the Bankruptcy and Insolvency Act, (a) for the purposes of paragraph 6(d), an individual is considered to deal at arm’s length with a related person if the Minister is satisfied that, having regard to the circumstances — including the terms and conditions of the individual’s employment with the former employer, their remuneration and the duration, nature and importance of the work performed for the former employer — it is reasonable to conclude that the individual would have entered into a substantially similar contract of employment with the former employer if they had been dealing with each other at arm’s length; and (b) for the purposes of subsection 21(4), individuals who are related to each other are, in the absence of evidence to the contrary, deemed not to deal with each other at arm’s length while so related. 84. Paragraph 5(a) of the Act is replaced by the following: (a) the individual’s employment terminated in the circumstances prescribed by regulation; 85. Section 6 of the Act is replaced by the following: Exceptions 6. An individual is not eligible to receive a payment in respect of any wages earned during a period in which the individual (a) was an officer or director of the former employer; (b) had a controlling interest within the meaning of the regulations in the business of the former employer; (c) occupied a managerial position within the meaning of the regulations with the former employer; or (d) was not dealing at arm’s length with (i) an officer or director of the former employer, (ii) a person who had a controlling interest within the meaning of the regulations in the business of the former employer, or (iii) an individual who occupied a managerial position within the meaning of the regulations with the former employer. 86. (1) Subsection 7(1) of the Act is replaced by the following: Amount of payment 7. (1) The amount that may be paid under this Act to an individual is the amount owing to the individual for wages 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, as the case may be, less any amount prescribed by regulation. In the case of a former employer who is both bankrupt and subject to a receivership, the amount owing is the greater of the amount determined in respect of the bankruptcy and the amount determined in respect of the receivership. (2) The portion of subsection 7(2) of the Act before paragraph (a) is replaced by the following: Maximum (2) The maximum amount that may be paid to an individual is the greater of the following amounts, less any amount prescribed by regulation: (3) The portion of subsection 7(2) of the English version of the Act after paragraph (b) is repealed. (4) Subsection 7(3) of the French version of the Act is replaced by the following : Affectation des prestations (3) Sauf disposition réglementaire contraire, les prestations versées au titre de la présente loi ne sont affectées à l’indemnité de vacances qu’après affectation à tous les autres éléments du salaire. 87. Sections 8 to 14 of the Act are replaced by the following: Application 8. To receive a payment, an individual is to apply to the Minister in the manner and during the period provided for in the regulations. Minister’s determination of eligibility 9. If the Minister determines that the applicant is eligible to receive a payment, the Minister shall make the payment. Notification 10. The Minister is to inform the applicant of their eligibility or ineligibility to receive a payment. REVIEW BY MINISTER Request for review 11. An applicant who is informed under section 10 may request a review of their eligibility or ineligibility, as the case may be. Review 12. The Minister may confirm, vary or rescind a determination of eligibility made under section 9. If the Minister varies the determination, the Minister shall make any payment resulting from the variation. Review is final 13. Subject to the right of appeal under section 14, the Minister’s confirmation, variation or rescission, as the case may be, is final and may not be questioned or reviewed in any court. APPEAL TO ADJUDICATOR Appeal on question of law or jurisdiction 14. The applicant may appeal the decision made by the Minister under section 12 to an adjudicator only on a question of law or jurisdiction. 88. Sections 16 and 17 of the Act are replaced by the following: Appeal on the record 16. The appeal is to be an appeal on the record and no new evidence is admissible. Adjudicator’s decision 17. The adjudicator may confirm, vary or rescind the decision made by the Minister under section 12. If the adjudicator varies the decision, the Minister shall make any payment resulting from the variation. 89. Sections 19 to 22 of the Act are replaced by the following: No review by certiorari, etc. 19. No order may be made to review, prohibit or restrain and no process entered or proceeding taken to question, review, prohibit or restrain in any court — whether by way of injunction, certiorari, prohibition, quo warranto or otherwise — an action of an adjudicator under this Act. Decision is final 20. The adjudicator’s decision is final and may not be questioned or reviewed in any court. ADMINISTRATION Duties of Trustees and Receivers General duties 21. (1) For the purposes of this Act, a trustee or a receiver, as the case may be, shall (a) identify each individual who is owed wages that 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 individual’s employer, as the case may be; (b) determine the amount of wages owing to each individual in respect of those six months; (c) inform each individual other than one who is in a class prescribed by regulation of the existence of the program established by section 4 and of the conditions under which payments may be made under this Act; (d) provide the Minister and each individual other than one who is in a class prescribed by regulation with the information prescribed by regulation in relation to the individual and with the amount of wages owing to the individual in respect of those six months; and (e) inform the Minister of when the trustee is discharged or the receiver completes their duties, as the case may be. Compliance with directions (2) A trustee or receiver shall comply with any directions of the Minister relating to the administration of this Act. Duty to assist (3) A person, other than one described in subsection (4), who has or has access to information described in paragraph (1)(d) shall, on request, provide it to the trustee or the receiver, as the case may be. Duty to assist — payroll contractors (4) In the case of a person who is dealing at arm’s length with and providing payroll services to a bankrupt or insolvent person, they shall provide a description of the information that they do not have access to, an estimate of the cost of providing the information that they have and an estimate of the cost of providing the information that they only have access to. Fees and expenses 22. (1) The trustee’s or receiver’s fees and expenses, in relation to the performance of their duties under this Act, are to be paid out of the estate of the bankrupt employer or the property of the insolvent employer, as the case may be. Minister to pay fees and expenses (2) The Minister shall, in the circumstances prescribed by regulation, pay the fees or expenses that are prescribed by regulation. 90. Section 29 of the Act is replaced by the following: Social Insurance Number 29. No person may knowingly use, communicate or allow to be communicated a Social Insurance Number 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. 91. Sections 32 and 33 of the Act are replaced by the following: Determination of overpayment 32. (1) If the Minister determines that an individual received a payment in an amount greater than the amount that they were eligible to receive, the Minister shall send them a notice (a) informing them of the determination; and (b) specifying the amount that they were not eligible to receive. Debt due to Her Majesty (2) The amount specified in the notice constitutes a debt due to Her Majesty in right of Canada and may be recovered by the Minister of National Revenue. Certificate of default (3) The amount of any debt referred to in subsection (2) that remains unpaid 30 days after the day on which the notice 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 the amount specified in the certificate and all related registration costs. Garnishment 33. If the Minister is of the opinion that a person is or is about to become liable to pay an amount to an individual who is indebted to Her Majesty under section 32, the Minister may, by written notice, order the person to pay to the Receiver General on account of the individual’s liability all or part of the amount otherwise payable to the individual. 92. Section 34 of the English version of the Act is replaced by the following: No payment or partial payment 34. If the Minister determines that an individual did not receive all or part of a payment that they were eligible to receive, the Minister shall make a payment to them in an amount equal to the amount that they did not receive. 93. Sections 36 to 39 of the Act are replaced by the following: Subrogation 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 the 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. Maintaining an action (2) For the purposes of subsection (1), Her Majesty in right of Canada may maintain an action in the name of the individual or Her Majesty in right of Canada. Amount not assignable 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 Quebec, null. Offences and Penalties Offences 38. (1) Every person commits an offence who (a) makes a false or misleading 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 to be false or misleading because of the nondisclosure of facts; (d) being required under this Act to provide information, does not provide it 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, consents to or acquiesces in an act or omission mentioned in any of paragraphs (a) to (f). Trustees and receivers (2) Every person who fails to comply with any of the requirements of subsection 21(1), (3) or (4) commits an offence. Limitation of prosecutions (3) A prosecution for an offence under subsection (1) or (2) may be commenced at any time within six years after the day on which the subject matter of the prosecution arose. Due diligence (4) No person may be convicted of an offence under subsection (2) if the person establishes that they exercised due diligence to prevent the commission of the offence. Obstruction 39. (1) Every person commits an offence who delays or obstructs a person in the exercise of their powers or the performance of their duties under this Act. Limitation of prosecutions (2) A prosecution for an offence under subsection (1) may be commenced at any time within two years after the day on which the subject matter of the prosecution arose. 94. Section 41 of the Act is replaced by the following: Regulations 41. The Governor in Council may make regulations generally for carrying out the purposes of this Act, including regulations (a) prescribing amounts for the purposes of subsection 2(1); (b) prescribing the circumstances in which employment terminated for the purposes of paragraph 5(a); (c) defining “controlling interest” and “managerial position” for the purposes of section 6; (d) prescribing amounts for the purposes of subsections 7(1) and (2); (e) respecting the allocation of payments to the different components of wages for the purposes of subsection 7(3); (f) respecting the period during which and the manner in which applications for payments are to be made under section 8; (g) respecting the period during which and the manner in which a review may be requested under section 11 or an appeal may be made under section 14; (h) prescribing the classes of individuals that the trustee or receiver is not required to inform under paragraph 21(1)(c) or to whom they are not required to provide information under paragraph 21(1)(d); (i) 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 the period during which and the manner in which that information is to be provided; (j) respecting the period during which and the manner in which the information referred to in paragraph 21(1)(c) and subsections 21(3) and (4) is to be provided; and (k) prescribing fees and expenses for the purposes of subsection 22(2) and the circumstances in which they are to be paid. 2005, c. 47 CHAPTER 47 OF THE STATUTES OF CANADA, 2005 95. Subsection 20(3) of chapter 47 of the Statutes of Canada, 2005 is repealed. 96. Subsection 30(2) of the Act is repealed. 97. Subsection 31(3) of the Act is repealed. 98. Section 37 of the Act is repealed. 99. Subsection 39(2) of the Act is amended by adding the following after the enacted subsection (1.6): Payment — equity claims (1.7) No proposal that provides for the payment of an equity claim is to be approved by the court unless the proposal provides that all claims that are not equity claims are to be paid in full before the equity claim is to be paid. 100. Section 103 of the Act is replaced by the following: 103. Section 170.1 of the Act is replaced by the following: Mediation required — paragraphs 173(1)(m) and (n) 170.1 (1) If the discharge of a bankrupt individual is opposed by a creditor or the trustee solely on grounds referred to in either one or both of paragraphs 173(1)(m) and (n), the trustee shall send an application for mediation, in the prescribed form, to the official receiver within five days after the day on which the bankrupt would have been automatically discharged had the opposition not been filed or within any further time after that day that the official receiver may allow. Mediation procedure (2) A mediation is to be in accordance with prescribed procedures. Court hearing (3) If the issues submitted to mediation are not resolved by the mediation or the bankrupt failed to comply with conditions that were established as a result of the mediation, the trustee shall without delay apply to the court for an appointment for the hearing of the matter — and the provisions of this Part relating to applications to the court in relation to the discharge of a bankrupt apply, with any modifications that the circumstances require, in respect of an application to the court under this subsection — which hearing is to be held (a) within 30 days after the day on which the appointment is made; or (b) at a later time that is fixed by the court. Certificate of discharge (4) If the bankrupt complies with the conditions that were established as a result of the mediation, the trustee shall without delay (a) issue to the bankrupt a certificate of discharge in the prescribed form releasing the bankrupt from their debts other than those referred to in subsection 178(1); and (b) send a copy of the certificate of discharge to the Superintendent. File (5) Documents contained in a file on the mediation of a matter form part of the records referred to in subsection 11.1(2). 101. Subsection 104(3) of the Act is repealed. 102. Section 106 of the Act is repealed. 103. Section 116 of the Act is repealed. 104. Subsection 120(2) of the Act is repealed. 105. Subsection 124(3) of the Act is amended by adding the following in alphabetical order to the enacted definitions: “equity claim”« réclamation relative à des capitaux propres » “equity claim” means a claim that is in respect of an equity interest, including a claim for, among others, (a) a dividend or similar payment, (b) a return of capital, (c) a redemption or retraction obligation, (d) a monetary loss resulting from the ownership, purchase or sale of an equity interest or from the rescission, or, in Quebec, the annulment, of a purchase or sale of an equity interest, or (e) contribution or indemnity in respect of a claim referred to in any of paragraphs (a) to (d); “equity interest”« intérêt relatif à des capitaux propres » “equity interest” means (a) in the case of a company other than an income trust, a share in the company — or a warrant or option or another right to acquire a share in the company — other than one that is derived from a convertible debt, and (b) in the case of an income trust, a unit in the income trust — or a warrant or option or another right to acquire a unit in the income trust — other than one that is derived from a convertible debt; 106. Section 126 of the Act is replaced by the following: 126. Section 6 of the Act is replaced by the following: Compromises to be sanctioned by court 6. (1) If a majority in number representing two thirds in value of the creditors, or the class of creditors, as the case may be — other than, unless the court orders otherwise, a class of creditors having equity claims, — present and voting either in person or by proxy at the meeting or meetings of creditors respectively held under sections 4 and 5, or either of those sections, agree to any compromise or arrangement either as proposed or as altered or modified at the meeting or meetings, the compromise or arrangement may be sanctioned by the court and, if so sanctioned, is binding (a) on all the creditors or the class of creditors, as the case may be, and on any trustee for that class of creditors, whether secured or unsecured, as the case may be, and on the company; and (b) in the case of a company that has made an authorized assignment or against which a bankruptcy order has been made under the Bankruptcy and Insolvency Act or is in the course of being wound up under the Winding-up and Restructuring Act, on the trustee in bankruptcy or liquidator and contributories of the company. Court may order amendment (2) If a court sanctions a compromise or arrangement, it may order that the debtor’s constating instrument be amended in accord- ance with the compromise or arrangement to reflect any change that may lawfully be made under federal or provincial law. Restriction — certain Crown claims (3) Unless Her Majesty agrees otherwise, the court may sanction a compromise or arrangement only if the compromise or arrangement provides for the payment in full to Her Majesty in right of Canada or a province, within six months after court sanction of the compromise or arrangement, of all amounts that were outstanding at the time of the application for an order under section 11 or 11.02 and that are of a kind that could be subject to a demand under (a) subsection 224(1.2) of the Income Tax Act; (b) any provision of the Canada Pension Plan or the Employment Insurance Act that refers to subsection 224(1.2) of the Income Tax Act and provides for the collection of a contribution, as defined in the Canada Pension Plan, or an employee’s premium, or employer’s premium, as defined in the Employment Insurance Act, and of any related interest, penalties or other amounts; or (c) any provision of provincial legislation that has a purpose similar to subsection 224(1.2) of the Income Tax Act, or that refers to that subsection, to the extent that it provides for the collection of a sum, and of any related interest, penalties or other amounts, and the sum (i) has been withheld or deducted by a person from a payment to another person and is in respect of a tax similar in nature to the income tax imposed on individuals under the Income Tax Act, or (ii) is of the same nature as a contribution under the Canada Pension Plan if the province is a “province providing a comprehensive pension plan” as defined in subsection 3(1) of the Canada Pension Plan and the provincial legislation establishes a “provincial pension plan” as defined in that subsection. Restriction — default of remittance to Crown (4) If an order contains a provision authorized by section 11.09, no compromise or arrangement is to be sanctioned by the court if, at the time the court hears the application for sanction, Her Majesty in right of Canada or a province satisfies the court that the company is in default on any remittance of an amount referred to in subsection (3) that became due after the time of the application for an order under section 11.02. Restriction — employees, etc. (5) The court may sanction a compromise or an arrangement only if (a) the compromise or arrangement provides for payment to the employees and former employees of the company, immediately after the court’s sanction, of (i) amounts at least equal to the amounts that they would have been qualified to receive under paragraph 136(1)(d) of the Bankruptcy and Insolvency Act if the company had become bankrupt on the day on which proceedings commenced under this Act, and (ii) wages, salaries, commissions or compensation for services rendered after proceedings commence under this Act and before the court sanctions the compromise or arrangement, together with, in the case of travelling salespersons, disbursements properly incurred by them in and about the company’s business during the same period; and (b) the court is satisfied that the company can and will make the payments as required under paragraph (a). Restriction — pension plan (6) If the company participates in a prescribed pension plan for the benefit of its employees, the court may sanction a compromise or an arrangement in respect of the company only if (a) the compromise or arrangement 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 company can and will make the payments as required under paragraph (a). Non-application of subsection (6) (7) Despite subsection (6), the court may sanction a compromise or arrangement 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. Payment — equity claims (8) No compromise or arrangement that provides for the payment of an equity claim is to be sanctioned by the court unless it provides that all claims that are not equity claims are to be paid in full before the equity claim is to be paid. 107. Sections 132 to 134 of the Act are replaced by the following: Wage Earner Protection Program Act 132. The Wage Earner Protection Program Act, as enacted by section 1 of this Act, applies in respect of wages owing by an employer only if (a) the employer becomes bankrupt on or after the day on which that section comes into force; or (b) all or part of the employer’s property comes into the possession or under the control of a receiver on or after the day on which that section comes into force. Bankruptcy and Insolvency Act 133. (1) An amendment to the Bankruptcy and Insolvency Act that is enacted by any of sections 2 to 5 and 7 to 106, subsection 107(1) and sections 108 to 123 of this Act applies only to a person who, on or after the day on which the amendment comes into force, is described in one of the following paragraphs: (a) the person becomes bankrupt; (b) the person files a notice of intention; (c) the person files a proposal without having filed a notice of intention; (d) a proposal is made in respect of the person without the person having filed a notice of intention; (e) an interim receiver is appointed in respect of the person’s property and all or part of the person’s property comes into the possession or under the control of the interim receiver; or (f) all or part of the person’s property comes into the possession or under the control of a receiver. Subsection 107(2) (2) The amendment to the Bankruptcy and Insolvency Act that is enacted by subsection 107(2) of this Act applies only to a person who is an undischarged bankrupt on the day on which it comes into force or who becomes bankrupt on or after the day on which it comes into force. Companies’ Creditors Arrangement Act 134. An amendment to the Companies’ Creditors Arrangement Act that is enacted by any of sections 124 to 131 of this Act applies only to a debtor company in respect of whom proceedings commence under that Act on or after the day on which the amendment comes into force. 108. Sections 137 to 139 of the Act are replaced by the following: 137. Paragraph 23(2)(b) of the Canada Pension Plan is replaced by the following: (b) subsection 224(1.2) of the Income Tax Act shall apply to employer’s contributions, employee’s contributions, and related interest, penalties or other amounts, subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.09 of the Companies’ Creditors Arrangement Act. Employment Insurance Act 138. Paragraph 99(b) of the Employment Insurance Act is replaced by the following: (b) subsection 224(1.2) of the Income Tax Act shall apply to employer’s premiums, employee’s premiums, and related interest, penalties or other amounts, subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.09 of the Companies’ Creditors Arrangement Act. Income Tax Act 139. The portion of subsection 224(1.2) of the Income Tax Act before paragraph (a) is replaced by the following: Garnishment (1.2) Notwithstanding any other provision of this Act, the Bankruptcy and Insolvency Act, any other enactment of Canada, any enactment of a province or any law, but subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.09 of the Companies’ Creditors Arrangement Act, if the Minister has knowledge or suspects that a particular person is, or will become within one year, liable to make a payment 109. Section 141 of the Act is replaced by the following: Order in council 141. Sections 1 to 131 and 136 to 139 come into force on a day or days to be fixed by order of the Governor in Council. TRANSITIONAL PROVISIONS Bankruptcy and Insolvency Act 110. An amendment to the Bankruptcy and Insolvency Act that is enacted by any of subsections 1(1) and (5) to (7), sections 3 and 6, subsection 9(3), sections 12 and 13, subsections 14(2) and (3), 15(2) and (3), 16(2) and (3) and 17(2), sections 19 to 22, 25, 31, 34, 35, 37, 42, 44, 46 to 48 and 50, subsection 51(1), sections 55 to 57 and subsection 58(2) of this Act applies only to a person who, on or after the day on which the amendment comes into force, is described in one of the following paragraphs: (a) the person becomes bankrupt; (b) the person files a notice of intention; (c) the person files a proposal without having filed a notice of intention; (d) a proposal is made in respect of the person without the person having filed a notice of intention; (e) an interim receiver is appointed in respect of the person’s property and all or part of the person’s property comes into the possession or under the control of the interim receiver; or (f) all or part of the person’s property comes into the possession or under the control of a receiver. Companies’ Creditors Arrangement Act 111. The amendment to the Companies’ Creditors Arrangement Act that is enacted by section 67 of this Act applies only to a debtor company in respect of whom proceedings commence under that Act on or after the day on which the amendment comes into force. COORDINATING AMENDMENTS Bill C-52 112. (1) Subsections (2) to (25) apply if Bill C-52, introduced in the 1st session of the 39th Parliament and entitled the Budget Implementation Act, 2007 (the “other Act”), receives royal assent. (2) If subsection 94(1) of the other Act comes into force before section 25 of this Act, then section 25 of this Act is repealed. (3) If subsection 94(1) of the other Act comes into force on the same day as section 25 of this Act, then section 25 of this Act is deemed to have come into force before subsection 94(1) of the other Act. (4) On the later of the day on which subsection 94(1) of the other Act comes into force and the day on which section 26 of this Act comes into force — or, if those days are the same day, then on that day — paragraph 65.11(10)(a) of the Bankruptcy and Insolvency Act, as enacted by section 44 of chapter 47 of the Statutes of Canada, 2005, as that section 44 is amended by that section 26, is replaced by the following: (a) an eligible financial contract; (5) If section 26 of this Act comes into force before section 95 of the other Act, then section 95 of the other Act is deemed never to have had its effects and is repealed. (6) If section 95 of the other Act comes into force on the same day as section 26 of this Act, then section 95 of the other Act is deemed to have come into force before section 26 of this Act. (7) If section 96 of the other Act comes into force before section 31 of this Act, then section 31 of this Act is repealed. (8) If section 31 of this Act comes into force before section 96 of the other Act, then (a) section 96 of the other Act is deemed never to have had its effects and is repealed; and (b) subsections 66.34(8) and (9) of the Bankruptcy and Insolvency Act are replaced by the following: Permitted actions (8) Despite section 69.2, the following actions are permitted in respect of an eligible financial contract that is entered into before the filing of a consumer proposal and is terminated on or after that filing, but only in accordance with the provisions of that contract: (a) the netting or setting off or compensation of obligations between the consumer debtor and the other parties to the eligible financial contract; and (b) any dealing with financial collateral including (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. Net termination values (9) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the consumer debtor to another party to the eligible financial contract, that other party is deemed, for the purposes of subsection 69.2(1), to be a creditor of the consumer debtor with a claim provable in bankruptcy in respect of those net termination values. (9) If section 96 of the other Act and section 31 of this Act come into force on the same day, then section 31 of this Act is deemed to have come into force before section 96 of the other Act and subsection (8) applies. (10) If section 100 of the other Act comes into force before section 40 of this Act, then (a) section 40 of this Act is deemed never to have had its effects and is repealed; and (b) sections 84.1 and 84.2 of the Bankruptcy and Insolvency Act, as enacted by section 68 of chapter 47 of the Statutes of Canada, 2005, as that section 68 is amended by that section 100, are replaced by the following: Assignment of agreements 84.1 (1) On application by a trustee and on notice to every party to an agreement, a court may make an order assigning the rights and obligations of a bankrupt under the agreement to any person who is specified by the court and agrees to the assignment. Individuals (2) In the case of an individual, (a) they may not make an application under subsection (1) unless they are carrying on a business; and (b) only rights and obligations in relation to the business may be assigned. Exceptions (3) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under (a) an agreement entered into on or after the date of the bankruptcy; (b) an eligible financial contract; or (c) a collective agreement. Factors to be considered (4) In deciding whether to make the order, the court is to consider, among other things, (a) whether the person to whom the rights and obligations are to be assigned is able to perform the obligations; and (b) whether it is appropriate to assign the rights and obligations to that person. Restriction (5) The court may not make the order unless it is satisfied that all monetary defaults in relation to the agreement — other than those arising by reason only of the person’s bankruptcy, insolvency or failure to perform a non-monetary obligation — will be remedied on or before the day fixed by the court. Copy of order (6) The applicant is to send a copy of the order to every party to the agreement. Certain rights limited 84.2 (1) No person may terminate or amend — or claim an accelerated payment or forfeiture of the term under — any agreement, including a security agreement, with a bankrupt individual by reason only of the individual’s bankruptcy or insolvency. Lease (2) If the agreement referred to in subsection (1) is a lease, the lessor may not terminate or amend, or claim an accelerated payment or forfeiture of the term under, the lease by reason only of the bankruptcy or insolvency or of the fact that the bankrupt has not paid rent in respect of any period before the time of the bankruptcy. Public utilities (3) No public utility may discontinue service to a bankrupt individual by reason only of the individual’s bankruptcy or insolvency or of the fact that the bankrupt individual has not paid for services rendered or material provided before the time of the bankruptcy. Certain acts not prevented (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 time of the bankruptcy; or (b) requiring the further advance of money or credit. Provisions of section override agreement (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. Powers of court (6) On application by a party to an agreement or by a public utility, the court may 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. Eligible financial contracts (7) Subsection (1) does not apply (a) in respect of an eligible financial contract; or (b) to prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for an insolvent person in accordance with the Canadian Payments Act and the by-laws and rules of that Association. Permitted actions (8) Despite section 69.3, the following actions are permitted in respect of an eligible financial contract that is entered into before the time of the bankruptcy, and is terminated on or after that time, but only in accordance with the provisions of that contract: (a) the netting or setting off or compensation of obligations between the individual bankrupt and the other parties to the eligible financial contract; and (b) any dealing with financial collateral including (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. Net termination values (9) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the individual bankrupt to another party to the eligible financial contract, that other party is deemed, for the purposes of paragraphs 69(1)(a) and 69.1(1)(a), to be a creditor of the individual bankrupt with a claim provable in bankruptcy in respect of those net termination values. (11) If section 40 of this Act comes into force before section 100 of the other Act, then (a) section 100 of the other Act is deemed never to have had its effects and is repealed; (b) subsection 84.1(3) of the Bankruptcy and Insolvency Act, as enacted by section 68 of chapter 47 of the Statutes of Canada, 2005, as that section 68 is amended by that section 40, is replaced by the following: Exceptions (3) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under (a) an agreement entered into on or after the date of the bankruptcy; (b) an eligible financial contract; or (c) a collective agreement. (c) subsection 84.2(7) of the Bankruptcy and Insolvency Act, as enacted by section 68 of chapter 47 of the Statutes of Canada, 2005, as that section 68 is amended by that section 40, is replaced by the following: Eligible financial contracts (7) Subsection (1) does not apply (a) in respect of an eligible financial contract; or (b) to prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for an insolvent person in accordance with the Canadian Payments Act and the by-laws and rules of that Association. Permitted actions (8) Despite section 69.3, the following actions are permitted in respect of an eligible financial contract that is entered into before the time of the bankruptcy, and is terminated on or after that time, but only in accordance with the provisions of that contract: (a) the netting or setting off or compensation of obligations between the individual bankrupt and the other parties to the eligible financial contract; and (b) any dealing with financial collateral including (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. Net termination values (9) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the individual bankrupt to another party to the eligible financial contract, that other party is deemed, for the purposes of paragraphs 69(1)(a) and 69.1(1)(a), to be a creditor of the individual bankrupt with a claim provable in bankruptcy in respect of those net termination values. (12) If section 100 of the other Act and section 40 of this Act come into force on the same day, then section 100 of the other Act is deemed to have come into force before section 40 of this Act and subsection (10) applies. (13) If subsection (10) or (11) applies, then section 99 of the other Act is deemed never to have had its effects and is repealed. (14) On the later of the day on which section 102 of the other Act comes into force and the day on which section 42 of this Act comes into force — or, if those days are the same day, then on that day — subsection 95(2.1) of the Bankruptcy and Insolvency Act is replaced by the following: Exception (2.1) Subsection (2) does not apply, and the parties are deemed to be dealing with each other at arm’s length, in respect of the following: (a) a margin deposit made by a clearing member with a clearing house; or (b) a transfer, charge or payment made in connection with financial collateral and in accordance with the provisions of an eligible financial contract. (15) If section 107 of the other Act comes into force before section 63 of this Act, then section 63 of this Act is deemed never to have had its effects and is repealed. (16) If section 107 of the other Act and section 63 of this Act come into force on the same day, then section 63 of this Act is deemed to have come into force before section 107 of the other Act. (17) If section 109 of the other Act comes into force before section 65 of this Act, then subsection 11.3(2) of the Companies’ Creditors Arrangement Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, as that section 128 is amended by that section 65, is replaced by the following: Exceptions (2) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under (a) an agreement entered into on or after the day on which proceedings commence under this Act; (b) an eligible financial contract; or (c) a collective agreement. (18) If section 65 of this Act comes into force before section 109 of the other Act, then (a) section 109 of the other Act is deemed never to have had its effects and is repealed; and (b) subsection 11.3(2) of the Companies’ Creditors Arrangement Act, as enacted by section 128 of chapter 47 of the Statutes of Canada, 2005, as that section 128 is amended by that section 65, is replaced by the following: Exceptions (2) Subsection (1) does not apply in respect of rights and obligations that are not assignable by reason of their nature or that arise under (a) an agreement entered into on or after the day on which proceedings commence under this Act; (b) an eligible financial contract; or (c) a collective agreement. (19) If section 109 of the other Act and section 65 of this Act come into force on the same day, then section 109 of the other Act is deemed to have come into force before section 65 of this Act and subsection (17) applies. (20) If section 110 of the other Act comes into force before section 76 of this Act, then paragraph 32(9)(a) of the Companies’ Creditors Arrangement Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, as that section 131 is amended by that section 76, is replaced by the following: (a) an eligible financial contract; (21) If section 76 of this Act comes into force before section 110 of the other Act, then (a) section 110 of the other Act is deemed never to have had its effects and is repealed; and (b) paragraph 32(9)(a) of the Companies’ Creditors Arrangement Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, as that section 131 is amended by that section 76, is replaced by the following: (a) an eligible financial contract; (22) If section 110 of the other Act and section 76 of this Act come into force on the same day, then section 110 of the other Act is deemed to have come into force before section 76 of this Act and subsection (20) applies. (23) If section 111 of the other Act comes into force before section 77 of this Act, then subsection 34(7) of the Companies’ Creditors Arrangement Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, as that section 131 is amended by that section 77, is replaced by the following: Eligible financial contracts (7) Subsection (1) does not apply (a) in respect of an eligible financial contract; or (b) to prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for a company in accordance with the Canadian Payments Act and the by-laws and rules of that Association. Permitted actions (8) The following actions are permitted in respect of an eligible financial contract that is entered into before proceedings under this Act are commenced in respect of the company and is terminated on or after that day, but only in accordance with the provisions of that contract: (a) the netting or setting off or compensation of obligations between the company and the other parties to the eligible financial contract; and (b) any dealing with financial collateral including (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. Restriction (9) No order may be made under this Act if the order would have the effect of staying or restraining the actions permitted under subsection (8). Net termination values (10) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim against the company in respect of those net termination values. Priority (11) No order may be made under this Act if the order would have the effect of subordinating financial collateral. (24) If section 77 of this Act comes into force before section 111 of the other Act, then (a) section 111 of the other Act is deemed never to have had its effects and is repealed; and (b) subsection 34(7) of the Companies’ Creditors Arrangement Act, as enacted by section 131 of chapter 47 of the Statutes of Canada, 2005, as that section 131 is amended by that section 77, is replaced by the following: Eligible financial contracts (7) Subsection (1) does not apply (a) in respect of an eligible financial contract; or (b) to prevent a member of the Canadian Payments Association from ceasing to act as a clearing agent or group clearer for a company in accordance with the Canadian Payments Act and the by-laws and rules of that Association. Permitted actions (8) The following actions are permitted in respect of an eligible financial contract that is entered into before proceedings under this Act are commenced in respect of the company and is terminated on or after that day, but only in accordance with the provisions of that contract: (a) the netting or setting off or compensation of obligations between the company and the other parties to the eligible financial contract; and (b) any dealing with financial collateral including (i) the sale or foreclosure or, in the Province of Quebec, the surrender of financial collateral, and (ii) the setting off or compensation of financial collateral or the application of the proceeds or value of financial collateral. Restriction (9) No order may be made under this Act if the order would have the effect of staying or restraining the actions permitted under subsection (8). Net termination values (10) If net termination values determined in accordance with an eligible financial contract referred to in subsection (8) are owed by the company to another party to the eligible financial contract, that other party is deemed to be a creditor of the company with a claim against the company in respect of those net termination values. Priority (11) No order may be made under this Act if the order would have the effect of subordinating financial collateral. (25) If section 111 of the other Act and section 77 of this Act come into force on the same day, then section 111 of the other Act is deemed to have come into force before section 77 of this Act and subsection (23) applies. COMING INTO FORCE Order in council 113. Subsections 1(1) and (5) to (7), sections 3 and 6, subsection 9(3), sections 12 and 13, subsections 14(2) and (3), 15(2) and (3), 16(2) and (3) and 17(2), sections 19 to 22, 25, 31, 34, 35, 37, 42, 44, 46 to 48 and 50, subsection 51(1), sections 55 to 57, subsection 58(2) and section 67 come into force on a day or days to be fixed by order of the Governor in Council. Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada