Bill C-253: An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans)

Bill C-253 If you have any questions or comments regarding the accessibility of this publication, please contact us at [email protected]. First Reading Second Reading LEGISinfo Bilingual view XML PDF Skip to Document Navigation Skip to Document Content ENGLISHSUMMARYSUMMARY1 Bankruptcy and Insolvency Act1 Bankruptcy and Insolvency Act5 Companies’ Creditors Arrangement Act5 Companies’ Creditors Arrangement Act6 Transitional Provisions6 Transitional Provisions7 Coming into Force7 Coming into Force Second Session, Forty-third Parliament, 69-70 Elizabeth II, 2020-2021 HOUSE OF COMMONS OF CANADA BILL C-253 An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans) Reprinted as amended by the Standing Committee on Industry, Science and Technology as a working copy for the use of the House of Commons at Report Stage and as reported to the House on June 21, 2021 Mrs. Gill 432043 SUMMARY This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to ensure that claims in respect of unfunded liabilities or solvency deficiencies of pension plans and claims relating to the cessation of an employer’s participation in group insurance plans are paid in priority in the event of bankruptcy proceedings. Available on the House of Commons website at the following address: www.ourcommons.ca 2nd Session, 43rd Parliament, 69-70 Elizabeth II, 2020-2021 HOUSE OF COMMONS OF CANADA BILL C-253 An Act to amend the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act (pension plans and group insurance plans) 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 1 (1) Subparagraph 60(1.‍5)‍(a)‍(ii) of the Bank­ruptcy and Insolvency Act is amended by adding the following after clause (A): (A.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in sections 81.‍5 and 81.‍6 to liquidate an unfunded liability or a solvency deficiency, (A.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined at the time of the filing of the notice of intention or of the proposal, if no notice of intention was filed, (2) Subparagraph 60(1.‍5)‍(a)‍(iii) of the Act is amended by adding the following after clause (A): (A.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in sections 81.‍5 and 81.‍6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament, (A.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined at the time of the filing of the notice of intention or of the proposal, if no notice of intention was filed, 2 (1) Paragraph 81.‍5(1)‍(b) of the Act is amended by adding the following after subparagraph (i): (i.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in this section and section 81.‍6 to liquidate an unfunded liability or a solvency deficiency, (i.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund, (2) Paragraph 81.‍5(1)‍(c) of the Act is amended by adding the following after subparagraph (i): (i.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in this section and section 81.‍6 to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament, (i.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund, 3 (1) Paragraph 81.‍6(1)‍(b) of the Act is amended by adding the following after subparagraph (i): (i.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would be required to be paid by the employer to the fund referred to in section 81.‍5 and this section to liquidate an unfunded liability or a solvency deficiency, (i.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund, (2) Paragraph 81.‍6(1)‍(c) of the Act is amended by adding the following after subparagraph (i): (i.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in section 81.‍5 and this section to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament, (i.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund, 4 Subsection 136(1) of the Act is amended by adding the following after paragraph (d): (d.‍001) the amount required, determined in the prescribed manner, to adequately indemnify the bene­ficiaries in the event the employer ceases to participate in a group insurance plan that provides for the payment of benefits to, or in respect of, employees or former employees for, among other things, life, disability, health or dental insurance; (d.‍002) the amount equal to the difference between any severance pay or compensation in lieu of notice owed by an employer to a clerk, servant, travelling salesperson, labourer or worker and any amount previously paid by the trustee for that severance pay or compensation in lieu of notice; R.‍S.‍, c. C-36 Companies’ Creditors Arrangement Act 5 (1) Subparagraph 6(5)‍(a)‍(i) of the Companies’ Creditors Arrangement Act is replaced by the following: (i) amounts at least equal to the amounts that they would have been qualified to receive under paragraphs 136(1)‍(d) and (d.‍001) of the Bankruptcy and Insolvency Act if the company had become bankrupt on the day on which proceedings commenced under this Act, and (2) Subparagraph 6(6)‍(a)‍(ii) of the Act is amended by adding the following after clause (A): (A.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that were required to be paid by the employer to the fund referred to in sections 81.‍5 and 81.‍6 of the Bankruptcy and Insolvency Act to liquidate an unfunded liability or a solvency deficiency, (A.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined on the day of commencement of proceedings under this Act, (3) Subparagraph 6(6)‍(a)‍(iii) of the Act is amended by adding the following after clause (A): (A.‍1) an amount equal to the sum of all special payments, determined in accordance with section 9 of the Pension Benefits Standards Regulations, 1985, that would have been required to be paid by the employer to the fund referred to in sections 81.‍5 and 81.‍6 of the Bankruptcy and Insolvency Act to liquidate an unfunded liability or a solvency deficiency if the prescribed plan were regulated by an Act of Parliament, (A.‍2) any amount required to liquidate any other unfunded liability or solvency deficiency of the fund as determined on the day of commencement of proceedings under this Act, Transitional Provisions Exception — employers 6 (1) Sections 1 to 3 do not apply in respect of a person who is an employer who, on the day before the day on which those sections come into force, participated in a prescribed pension plan for the benefit of the person’s employees until the third anniversary of the day on which this Act comes into force. Exception — companies (2) Subsections 5(2) and (3) do not apply in respect of a company that, on the day before the day on which those subsections come into force, participated in a prescribed pension plan for the benefit of its employees until the third anniversary of the day on which this Act comes into force. Coming into Force Three years after royal assent 7 Section 4 and subsection 5(1) come into force three years after the day on which this Act receives royal assent. Published under authority of the Speaker of the House of Commons Publication Explorer Publication Explorer ParlVU