Canada Gazette, Part I, Volume 159, Number 48: Regulations Amending the Bankruptcy and Insolvency General Rules and the Companies’ Creditors Arrangement Regulations

November 29, 2025

Statutory authorities
Bankruptcy and Insolvency Act
Companies’ Creditors Arrangement Act

Sponsoring department
Department of Innovation Science and Economic Development

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

The last regulatory amendments to the Rules and the Regulations were made in 2009. Changes in technology, inflation, trends in insolvency proceedings, and shifts in the ways in which stakeholders work have led to the identification of various areas within the insolvency system that should be addressed to ensure the system is working in a contemporary fashion and is adapting to current and future market needs. More specifically, the issues that the proposed regulatory amendments will address are the following:

1. Some of the provisions of the Rules and of the Regulations do not provide express authority to use digital means to complete actions required under the Rules and the Regulations, nor do they account for various other technological advances synonymous with modern communications and service delivery, or greater accessibility and choice for all insolvency stakeholders.
2. There is an inconsistency between provinces regarding the place to file an appeal and the delay in which such an appeal is to be filed. Inconsistencies are found between the Rules and the Regulations, and additional inconsistencies exist between the French and English Rules due to translation issues.
3. Debt and asset thresholds for accessing consumer proposals and summary administration bankruptcies (i.e. the streamlined proceedings) are not indexed to account for inflation and, as a result, many relatively low-risk debtors are — or would, in the future, be — unable to access a specific insolvency proceeding solely because they have a larger value of assets or debts than prescribed by the Rules. These individuals are therefore required to go through a more complex proceeding, namely a Division I proposal or an ordinary administration bankruptcy, that costs more money, leaving them and other stakeholders with doubts about the system, and often leaving creditors with lower returns than they would have had in a more simple proceeding.
4. The tariff applicable to LITs’ fees for summary administration bankruptcies and consumer proposals has not been significantly modified since 1998 and does not account for inflation. This represents an important issue for LITs who have seen their real remuneration decrease over time, and has created an even more important challenge for small LIT firms and individual LITs not associated with a corporate LIT, as they have fewer opportunities to benefit from economies of scale.

Background

The Office of the Superintendent of Bankruptcy (OSB) is responsible for supervising all estates and matters to which the Bankruptcy and Insolvency Act (BIA) applies, as well as certain matters under the Companies’ Creditors Arrangement Act (CCAA). The OSB licenses and regulates the insolvency profession; supervises the administration of estates in bankruptcy, commercial reorganizations, consumer proposals and receiverships; maintains a public record of BIA and CCAA filings; records and investigates complaints regarding the insolvency process; and ensures compliance through maintenance and enforcement of the regulatory framework.

Objective

The intent of the regulatory proposal is to complete regulatory amendments to various provisions of the Rules and of the Regulations to ensure that the insolvency system can be made more agile, transparent and responsive without jeopardizing the integrity of the system. The proposal would allow the OSB to better deploy the tools within its authority to ensure the insolvency system continues to function as intended and is able to effectively adapt in an ever-changing environment.

Description

The proposal has been organized into four different categories. Each category consists of one or more proposed amendments to the Regulations and the Rules. The proposed amendments are discussed below.

I. Digitalization and accessibility

The proposed amendments under this category are largely administrative in nature while aiming to increase efficiency and accountability, and to reduce the administrative burden and overall costs.

1. Amending various sections of the Rules to allow notices to be sent by electronic transmission (i.e. by email).
2. Amending the Rules to allow for the keeping of electronic books, records and documents relating to the administration of estates.
3. Amending the Rules to exclude electronically filed documents from the “business hours” requirement.
4. Amending the Rules to remove the requirement to obtain the seal of the court.
5. Amending the Regulations to provide a more reasonable timeline for filing Forms 1 and 3.
6. Amending the Regulations to clarify that when prescribed documents are required to bear a signature, it can be affixed to the document by means of any process, including digital, that will identify the signatory and link them to the document.

II. Ensuring consistency between regulatory measures

The proposed amendments under this category would ensure consistency between languages and between provinces, as well as between the Rules and the Regulations.

1. Amending the French version of subsection 6(2) of the Rules to match the English version, specifically in relation to timelines required for receiving or sending every notice or other document given or sent in accordance with the BIA.
2. Amending the Rules to ensure consistency between provinces regarding where and when appeals should be filed, as the section of the Rules relating to these aspects currently applies to common law provinces due to an inadvertent omission made when subsection 183(2.1) was added to the BIA.
3. Amending the Regulations to set the prescribed period for the Superintendent to keep, or cause to be kept, a public record of prescribed information relating to proceedings under the CCAA to be at least 10 years after the date at which the order discharging the monitor becomes effective.

III. Increasing thresholds for summary administration bankruptcies and consumer proposals

Amendments to the Rules are required since the current debt and asset thresholds for consumer proposals and summary administration bankruptcies do not account for inflation, forcing many low-risk debtors into more complex and costly proceedings. It is proposed to increase the threshold applicable to summary administration bankruptcies from $15,000 to $20,000 and that it be adjusted annually based on inflation. In addition, a new section would be added to provide that the threshold applicable to consumer proposals would be increased from $250,000 to $325,000 and annually adjusted based on inflation.

IV. Revising fees under the Rules

1. Tariff applicable to summary administration bankruptcies and consumer proposals

LITs are paid specific amounts for administering a debtor’s file at various points throughout the insolvency process. These are called administrator’s fees and expenses and are categorized as tariffs that are prescribed by the Rules.

The amendments proposed to the tariffs are summarized in the following chart.

Table 1: Current and proposed tariffs

Type of proceeding	Tariff subcategory	Current	Proposed
Summary administration bankruptcy	Fees	100% of the first $975 or less of receipts 35% of the portion of receipts between $975 and $2,000 50% of the portion of receipts above $2,000	100% of the first $1,700 or less of receipts 45% on the portion of receipts exceeding $1,700 but not exceeding the asset threshold applicable for summary administration bankruptcies
	Advances on the fees	3 withdrawals of $250 each The withdrawals are made at the time of the mailing of the notice of bankruptcy, 30 days after the date of the bankruptcy, and four months after that same date	2 withdrawals of $850 each The withdrawals are made at the time of the mailing of the notice of bankruptcy, and 90 days after the date of the bankruptcy Limitation: 25% of receipts in the estate should be left in the account at all times until estate closure
	Administrative disbursements	Lump sum of $100	Lump sum of $140 Indexed to inflation, updated annually and rounded to the nearest $5
	Services of an interpreter	n/a	Reasonable expenses
Consumer proposals	Fees	2 payments of $750 each	2 payments of $850 each Indexed to inflation, updated annually and rounded to the nearest $5
	Services of an interpreter	n/a	Reasonable expenses

It is also proposed to provide that the amounts specified in the tariff are the maximal fees to be paid for services provided by LITs for summary administrations and consumer proposals, and are not intended to be a flat fee.

Finally, it is proposed to adjust the maximal amount that can be paid under an agreement to pay fees and disbursements concluded between an LIT and an individual bankrupt (commonly known as an agreement under section 156.1 of the BIA) to reflect the maximal amount payable under the tariff.

2. Counselling

The following chart summarizes the proposed amendments to the amounts payable for counselling.

Table 2: Current and proposed counselling fees

Type of proceeding	Tariff subcategory	Current	Proposed
Summary administration bankruptcy and consumer proposal	Counselling fees	$85 per session for individual counselling $25 per person per session for group counselling	$120 per session for individual counselling $35 per person per session for group counselling Both would be indexed to inflation, updated annually, and rounded to the nearest $5

Regulatory development

Consultation

The OSB held a 90-day consultation that ended in June 2021 called the comprehensive review of directives and regulations (CRDR), inviting stakeholders to contribute comments and suggestions on how to modernize and improve the regulatory framework, enhance effectiveness of its administration, and increase accessibility to insolvency proceedings. The consultation was published on the OSB website and an email notification was sent to key stakeholders (i.e. LITs, insolvency groups such as the Canadian Association of Insolvency and Restructuring Professionals [CAIRP] and the Insolvency Institute of Canada [IIC], the Canadian Bar Association [CBA], and credit associations). Thirty-two submissions were received. Specific comments can be found on the OSB website.

Upon review of the submissions for the CRDR, it was noted that there are various areas in which the Rules and the Regulations could be modified to ensure the insolvency system operates in an efficient manner, while adapting to current and future needs. The results of this review form the basis of this regulatory proposal.

In addition to the CRDR, the OSB also held targeted consultations with various organizations on specific aspects with the intention of gathering more specific feedback or to clarify comments received in the context of the CRDR. Feedback from these consultations is explained below.

CAIRP targeted consultation

The CAIRP, which represents approximately 95% of LITs, was included in a targeted consultation to comment on LIT tariffs. In June 2024, the CAIRP submitted written comments providing various recommendations to amend the LIT tariffs. Analysis of this proposal and its implications indicated that it risked reducing debt recovery for creditors beyond what was needed to support LIT operations. For example, following the CAIRP proposal exactly would result in over 75¢ of every dollar collected under summary administration bankruptcies going towards paying LIT remuneration. The primary basis for most of the CAIRP proposal was to adjust regulated fees to fully restore their value by accounting for inflation between 1998 and 2024, and maintain this level going forward. However, the OSB submits that a more recent year would be more appropriate, given the 1998 amendments would have considered some degree of future inflation when the fees were established. Furthermore, it is believed that the current fee structure may be biased towards consumer proposals and that a rebalancing is needed. While one of the stated objectives of the 1998 amendments was to increase adoption of consumer proposals, they now represent more than 80% of current insolvency filings and may not be appropriate in that proportion of cases.

Further discussions with the CAIRP to confirm OSB analysis and to consider adjustments to the OSB proposal continued into the fall of 2024. The OSB adjusted its initial proposal based on CAIRP feedback.

IIC targeted consultation

The IIC contributed comments following the CRDR consultation. The OSB had follow-up questions for them to ensure that their contributions were well understood. These comments focused on their recommendations to (1) add a definition in the Regulations for “margin loan,” and (2) integrate the Eligible Financial Contract Regulations (Companies’ Creditors Arrangement Act) [EFC Regulations] into the Regulations. Relating to the first point, the IIC was preparing a draft definition for the term margin loan, but the decision was made to not go forward with this, because the term is only used in the EFC Regulations; it is not used in the Rules or the Regulations. As for the integration of the EFC Regulations, it was agreed that they will not be integrated into the Regulations, considering the suggestion was solely for aesthetic purposes and the implications of integrating these regulations involve many internal stakeholders and would cause an administrative burden. Additionally, the EFC Regulations are easily accessible online (via a hyperlink) and in paper format (as a separate chapter) when consulting the Regulations.

Credit Counselling Canada targeted consultation

Credit Counselling Canada is an organization that provides not-for-profit credit counselling services to individuals. Considering their work with individuals, they are a stakeholder that provides valuable feedback regarding consumer aspects of insolvency. The OSB completed a targeted consultation with Credit Counselling Canada to obtain their comments on (1) an increase in the fees that LITs can withdraw in summary administration bankruptcies and consumer proposals; (2) an increase in the asset value threshold to be eligible to file a summary administration bankruptcy and the debt limit in a consumer proposal; and (3) an increase in the cost for insolvency counselling sessions. Credit Counselling Canada suggested LITs remuneration could be indexed for inflation, that increasing the asset value threshold in a summary administration bankruptcy and the debt limit in a consumer proposal is unlikely to help consumers, and that increasing the fee for counselling is reasonable considering overhead costs and the delivery of counselling sessions.

Canadian Bar Association targeted consultation

The CBA contributed comments during the CRDR. The OSB had follow-up questions for the CBA considering their comments regarding fees. The CBA contributed comments regarding a suggestion that section 18 of the Rules be amended to increase the threshold for the taxation of bills of costs. The current Rule states that a bill of costs for legal services, other than those that do not exceed $2,500, must be taxed by a taxing officer. The CBA suggested increasing the amount to $7,500. This recommendation has not been put forward in the regulatory proposal. Many of the bills of costs do not exceed, or do not exceed far beyond, $7,500. Therefore, this modification would result in excluding a vast portion of bills of costs from the formal taxation process, and is not viewed as being necessary at this time.

Creditor representatives targeted consultation

The OSB reached out to creditor representatives who are in frequent communication with creditors. They expressed support for an increase in LIT fees under subsection 128(1) and paragraph 128(2)(e) of the Rules, and for an increase in the value of assets for summary administration bankruptcies and recommended it be updated annually and indexed to inflation. However, they expressed opposition to an increase in LIT tariffs and debt levels for consumer proposals, citing both the LIT tariffs and debt levels for consumer proposals are generously high to begin with and would leave creditors with fewer dividends. The OSB has considered this point of view, but is nevertheless proposing an increase considering that the value of the fees paid to LITs has reduced over time due to inflation.

Indigenous engagement, consultation and modern treaty obligations

The proposed amendments would have limited impacts on Indigenous peoples. The various amendments that allow for electronic transmission of documents will benefit those who live in remote areas. However, the benefits are not linked to their status, but rather because of the place where they live. The benefits would be the same for any other non-Indigenous people living in remote areas.

Instrument choice

Government intervention is required, considering it is the only legal method for the Rules and Regulations to be amended. Should the government choose to not implement the amendments, the insolvency system would continue to operate in a dated fashion. The insolvency system requires modernization to efficiently contribute to Canada’s economy and ensure it can adapt to current and future needs. It is a concern that LITs may leave the profession and future LITs may question a career in insolvency when they are subject to antiquated methods that are becoming obsolete and have larger associated costs.

Each proposed regulatory amendment is due to issues arising because of the precise wording of the existing Rules and Regulations. There are two other potential options that could have been considered to address some of the issues that the amendments will address: a position paper or a directive. However, neither of these options were deemed adequate to formally solve the issues since neither of these have paramountcy over the Rules and the Regulations. Only amendments to the Rules and Regulations can offer a suitable solution and avoid potential future court contestation.

Regulatory analysis

Benefits and costs

The following provides a summary of the methodology and results of the cost-benefit analysis of this proposal. For full details, a separate report is available on request by contacting the Regulatory Policy and Public Affairs team at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca. The full report goes into greater depth on the forecasting techniques and background of the analysis. The cost-benefit analysis of the proposed regulatory amendments focuses on two main areas that account for most impacts of these amendments. These two areas are the following:

• (i) Adjustments to the sections of the Rules that govern the way LITs are compensated (LIT remuneration) from insolvent estates when a debtor undertakes a consumer proposal or a summary administration bankruptcy. This includes consideration of how changes in thresholds for participation in these processes ($15,000 assets for summary administration bankruptcy [bankruptcy] and $250,000 debt for consumer proposals [proposals])^{footnote 1} may impact LIT remuneration.
• (ii) Regulatory modernization impacts.

All impacts are measured relative to a baseline scenario where the regulatory framework under which insolvency proceedings in Canada are governed remains as it is currently. In terms of the cost-benefit analysis, the baseline and regulatory scenario examined can be broadly described as follows.

Baseline scenario

In the baseline scenario, no changes are made to LIT remuneration. The number of insolvency filings continues at current trends and the proportion of proposals as a total of all insolvencies also continues to increase. As remuneration falls in real terms, LITs collect increasingly smaller proportions from insolvent estates, leaving larger proportions for creditors. As a result, fewer LITs offer their services and a greater market concentration of services by major financial companies occurs. This risks the need for a greater level of effort by debtors to find adequate services and limits their options for service providers.

If regulatory modernization does not take place, stakeholders would be required to continue performing tasks in outdated methods, wasting time and resources.

Regulatory scenario

Under the proposed amendments, rules governing LIT remuneration are changed such that remuneration per filing is restored and maintained at levels similar to the 2008–2013 time period. A more balanced approach between proposals and bankruptcies, which is better aligned with the level of effort to oversee these proceedings, is implemented. LITs collect a larger portion of insolvent estates, leaving less money available for creditors, resulting in reduced debt recovery rates for creditors. The supply of LIT services would be improved, decreasing the level of effort required for debtors to find an appropriate LIT to guide them through the insolvency process. Less money would also be collected for OSB operations from levies on consumer proposals. More money would be collected on taxes paid on LIT services provided.

Out-of-date requirements in the regulatory framework would be modernized, thereby reducing the administrative and compliance burden on LITs, courts, creditors and other stakeholders.

The most impactful element, in terms of monetized outcomes, of the proposed amendments would result from adjustments to LIT compensation. Over 100 000 insolvency proceedings are filed by LITs every year, and thus even minor adjustments become magnified by this factor. For instance, every $100 increase in LIT remuneration would cause a rough transfer of over $10 million from creditors to LITs.

Impacts

As described above, the difference between the regulatory proposal and the baseline scenario can be described more precisely as follows.

Costs of the regulatory proposal

1. Reduced creditor recovered debt

When a debtor undergoes either bankruptcy or a proposal, the amount from liquidated assets (i.e. cash) and surplus income going into the estate is governed by the Rules and is thus limited. This means that, for the most part, paying one party more from the estate comes at the cost of other parties receiving less. Therefore, an increase in the allowable fees from LITs would result in less debt recovered by creditors.

2. Decreased BIA levy revenue

In the case of a consumer proposal, the OSB charges a levy as a percentage of the distributions to creditors (5%). As an increase in LIT fees would reduce creditor distributions, this would also decrease the amount of money collected by the OSB to fund OSB operations.

3. IT implementation

The OSB, the software providers for LITs, and the LITs themselves would need to make changes to the IT infrastructure used to monitor insolvency estates. These changes would be required to update the formulas used for LITs to determine how they make draws on insolvency estates, as well as the amount of these draws. Changes would be required to the way in which LITs submit information to the OSB when sending statements of receipts and disbursements.

Benefits of the regulatory proposal

1. Increased LIT remuneration

The fee structure used to reimburse LITs for their services provided during the insolvency process has remained virtually unchanged for over two decades. While payments based on percentages of receipts and disbursements are less affected by inflation, flat payments have seen their value in terms of purchasing power eroded. Increasing and maintaining these fees would make LIT operations more profitable and less dependent on the overall value of the estates of debtors.

2. Decreased search costs for LIT services

Making LIT operations more profitable would increase the motivation for financial experts to seek out training to become LITs and/or for existing LITs to continue their operations. Financial companies would continue to actively offer these services and provide greater compensation to employees with an LIT certification. This would contribute to increasing the supply of insolvency services offered to debtors while providing benefits from increased options and thus reduced search and travel time to obtain insolvency services.

3. Rebalancing of bankruptcy versus consumer proposals

Over time, increasingly larger proportions of debtors have chosen the option of consumer proposal over bankruptcy. While each individual debtor’s decision is determined by many factors, the current fee structure could be creating an environment where debtors are encouraged to take the consumer proposal route, even in cases where it is not in their best interest. Rebalancing the fee structure could help remedy this situation. As this benefit is aimed at removing the potential for a conflict of interest based on LIT remuneration rather than reducing a concrete observable cost, it has been considered only qualitatively and not monetized.

4. Regulatory modernization benefits (LITs and creditors) and court cost savings

Many of the changes included in this regulatory proposal remove outdated requirements that unnecessarily take up the time of all stakeholders involved. These requirements are outdated and no longer serve the purpose they were intended for when introduced. Technology and procedural advances have made these requirements obsolete.

Assumptions

• Payments into and from an insolvent account, while occurring in instalments over a period of time, have been assumed to occur in the year they are reported to the OSB.
• The number of debtors who file insolvency proceedings would not be impacted by the proposed changes, although the proportion of insolvencies using summary administration bankruptcies/consumer proposals would change.
• The increases in thresholds for consumer proposals and summary administration bankruptcies would not significantly increase the total number of insolvencies nor the total amount of receipts collected in a typical insolvent estate.
• The proportion of consumer proposals would continue to grow in the baseline but they would decrease and stabilize at 70% of insolvencies (30% summary administration bankruptcies) under the regulatory policy scenario.
• The total amount of receipts collected from insolvent individuals would not change following the regulatory amendments.
• Average receipts provide an accurate estimate of average LIT remuneration in both the baseline and regulatory policy scenarios.
• The number of LITs operating in Canada increases proportionally to the total amount of money forecast to be available for remuneration from insolvent estates with a three-year lag required for a supply response. This keeps the average revenue per LIT continually moving towards a constant value.
• Time spent searching for LIT services by debtors is inversely proportional to the number of debtor clients per LIT. In other words, the more LITs there are, the less time a debtor spends searching for an appropriate LIT to handle their insolvency.
• The inflation rate over the period of analysis is 2%.
• The period of analysis runs from 2025 to 2044 (20 years).
• A discount rate of 7% is used and discounting is assessed at the end of each year over the assessment period.
• A price year of 2022 is used to represent all real values.

Methodology and results

LIT fee changes

The assessed impacts are the following: increased LIT remuneration, increased tax revenue, reduced creditor recovered debt (BIA), and decreased BIA levy revenue.

To determine the impact of changes to LIT remuneration rules, forecasts of the number of consumer proposals and summary administration bankruptcies filed were required. These forecasts were based on the overall historic trend in growth of insolvency filings in Canada.

The overall forecast for all insolvencies is then multiplied by forecasts of the proportion of proposals and bankruptcies. In the baseline scenario, this is expected to continue along historic trends with consumer proposal usage continuing to grow. The proportion of consumer proposals has gone from about 20% of total insolvencies in 2007, to currently representing over 70%. In the regulatory policy scenario, proposals are forecast to stabilize at 70%, rather than continuing to grow.

The next main determinate of LIT remuneration is the value of receipts collected into insolvent estates from which LITs draw funds. Funds not used for LIT remuneration (including payments for counselling) on which sales taxes are charged are used to cover any associated court costs and to pay OSB levies and filing fees. The remainder is distributed to creditors.

Receipts are forecast into the future based on inflation elasticities observed over historic OSB data. This data shows that for every 1% of inflation, receipts for bankruptcies increased by 1.17%, and consumer proposals by 0.94%. These elasticities are applied in the baseline scenario to forecasts based on historic receipts data. In the regulatory scenario, it is assumed that the total amount of receipts collected for all insolvencies remains the same, as estimated in the baseline. However, insolvencies that were consumer proposals in the baseline and that become bankruptcies in the regulatory scenario would have lower-value estates compared to the average consumer proposal. To balance this, average receipts in consumer proposals in the regulatory scenario are increased.

Applying the remuneration rules under both the baseline and regulatory scenarios to average receipts and adjusting nominal values to real values^{footnote 2} (2022 prices) reveal that the average LIT remuneration for consumer proposals declines over the 20-year assessment period in the baseline from $3,976 to $3,591, whereas it slowly increases from $4,213 to $4,423 in the regulatory scenario. This increase would mostly be due to the assumed increase in average receipts per proposal. This results in a net real increase from the baseline policy of $237 per filing in the first year, increasing to $832 in the final year of analysis.

For bankruptcies, as was the case with proposals, the average real remuneration is decreasing from $2,498 in year 1 to $2,288 in year 20 in the baseline scenario. However, in the regulatory scenario, remuneration per filing stays relatively constant over the period of analysis, varying slightly above or below an average of $3,055. The net difference between the two scenarios sees remuneration in the regulatory scenario being $572 more than the baseline in year 1 and $771 more in year 20.

All other changes for OSB funds collected by filings and levies, taxes, court costs, and creditor debt recovery are functions of the LIT remuneration. Overall results are calculated by multiplying the average result per filing for bankruptcies and proposals by the number of filings for each respective insolvency proceeding in both the baseline and regulatory scenarios. Impacts are presented as the net difference for each impact between the baseline and regulatory scenarios. This sees LIT remuneration increase by $680.4 million in total present value (TPV) [$64.2 million annualized], taxes increase by $81.8 million ($7.7 million annualized), OSB levy collection decrease by $17.9 million ($1.7 million annualized), and creditor recovered debt decrease by $744.4 million ($70.3 million annualized).

Decreased search costs for LIT services

LIT services, as represented by the number of LITs offering their services, are assumed to change proportionately to the overall real (adjusted for inflation) remuneration available. This, in the long term, would keep real remuneration per LIT moving towards a constant level. However, due to the required training and certification process, this adjustment cannot occur automatically. Therefore, there would be a delay before observed increases in LIT remuneration result in an increase in the supply of LIT services.

Changes in the number of LITs impact the client-to-LIT ratio; in other words, the average number of debtor clients an LIT manages in a year. Higher ratios are associated with more time for a debtor to find an LIT that is appropriate for their needs (i.e. accessible, responsive, etc.) and one who is willing to take them on as a client. The opportunity cost of debtors’ time is valued at the average wage rate for Canadians. In the baseline scenario, the client-to-LIT ratio starts at 130 in 2025 and slowly increases over the assessment period to 140 in 2044. In the regulatory scenario, the ratio is the same as that in the baseline scenario for the first three years, but then declines afterwards down to 119 in the final year, representing a decrease of over 21 clients per LIT relative to the baseline.

Under current conditions, with 1 000 LITs and 130 clients (filings) per LIT, it has been estimated that debtors spend an average of 16 hours engaged in activities searching for LIT services, this being valued at the Canadian average wage of $30. This is similar to levels of effort reported for individuals seeking other professional services, such as a real estate agent. In the baseline scenario, the average client search time in 2044 increases by 44 minutes, whereas in the regulatory scenario it would decrease by 1 hour and 49 minutes. The net increased supply in services provided by LITs as a result of better remuneration would reduce total search costs over the assessment period by almost 9%, providing a total present value over the period of assessment of $63.0 million ($6.0 million annualized).

Regulatory modernization benefits (LITs and creditors)

Other impacts of the regulatory proposal have been estimated using the standard cost model, which is calculated as the product of the time to complete the task in hours, the hourly cost of labour, and the number of stakeholders impacted for each time an action is required to be performed (frequency). These costs are calculated net of the baseline (e.g. if a task takes 5 hours to complete in the baseline and 2 hours in the regulatory scenario, a 3-hour reduction would be used to calculate the net impact).

• Record-keeping activities
  • Record-keeping benefits are related to regulatory changes that would explicitly allow the use of electronic bookkeeping of documents relating to the administration of estates. This would save LITs time and resources to print out and file documents related to each insolvency. LITs are also subject to office visits where they are required to provide these records to enforcement officers. As office visits occur about once every four years, each year 25% of LITs are subject to an office visit. Savings have been estimated at $19.1 million TPV ($1.8 million annualized).
• Consent to electronically transmit
  • The proposed regulatory amendments would remove requirements for stakeholders to receive consent to send information such as documents and notifications electronically. These requirements are intended to prove that the intended recipient is willing and able to receive the information in an electronic format. When the requirements were made, electronic communications were not as pervasive as they are now, and the requirements no longer serve a useful purpose. This saving has been estimated at $10.6 million TPV ($1 million annualized).
• Electronic transmission
  • Several amendments would allow transmission of documents electronically rather than by registered mail or courier (or in some cases served in person). These are expected to save time for stakeholders in regards to printing and preparing documents for transmission, and costs to transmit these documents physically from one location to another. This has been estimated to provide a savings of $184.5 million TPV for LITs ($17.4 million annualized), with a total of $181.2 million for LITs and $3.3 million for creditors.
• Court procedures
  • It is proposed to remove the requirement for courts to affix a seal of the court to applications for bankruptcy orders. This change would mostly benefit the courts, but represents minimal savings.
• Electronic signature
  • The proposed amendments to the Regulations would clarify that documents filed for a CCAA proceeding can be signed using digital signatures. This would remove the requirement to print, physically sign, and scan documents. This would provide minor savings of $162 thousand ($15,300 annualized).

IT implementation

To implement the proposed changes on LIT remuneration, changes to accounting and reporting software that LITs use to communicate with the OSB would need to be made. This also means that the OSB itself would be required to update its data systems in order to collect and record the new format of LIT remuneration data, and integrate automated adjustments for inflationary impacts on fees and thresholds. The OSB collects records from all insolvencies under the BIA, recording information submitted by LITs for statements of receipts and disbursements, including the different components of payments from estates to LITs. As these amendments would change this data, the fields in both the LIT and OSB databases used to collect and transmit these records would need to be updated.

For the OSB, the updates would be done as an element of ongoing IT updates that include adjustments directly related to the regulatory amendments. The cost for such an update has been estimated as a one-time, upfront cost of $200,000, according to rough estimates from the OSB. This assumes that the updates to the software automate the process of inflationary adjustments to avoid recurring costs. A similar cost has been assessed to software developers who supply commercial off-the-shelf solutions and to LITs that develop in-house solutions.

Cost-benefit statement

• Number of years: 20 (2025 to 2044)
• Price year: 2022
• Present value base year: 2025
• Discount rate: 7%

Results as reported in the tables are rounded; however, totals have been calculated using unrounded results, and thus may vary from the sum of values as they appear.

Table 3: Monetized benefits (millions)

Impacted stakeholder	Description of benefit	Base year (2025)	2034	Final year (2044)	Total (present value)	Annualized value
Government	Increased tax revenue	$5.02	$8.42	$11.56	$81.84	$7.73
	Court cost savings	$0.00	$0.00	$0.00	$0.01	$0.00
Industry	Increased LIT remuneration	$42.67	$69.72	$95.94	$680.45	$64.23
	Regulatory modernization benefits — LITs	$19.27	$19.27	$19.25	$211.02	$19.92
	Regulatory modernization benefits — Creditors	$0.31	$0.31	$0.31	$3.32	$0.31
Canadians	Decreased search costs	$0.00	$7.88	$11.15	$63.05	$5.95
All stakeholders	Total benefits	$67.28	$105.61	$138.21	$1,039.68	$98.14

Table 4: Monetized costs (millions)

Impacted stakeholder	Description of cost	Base year (2025)	2034	Final year (2044)	Total (present value)	Annualized value
Government	Decreased BIA levy revenue	$0.74	$1.88	$3.67	$17.87	$1.69
	IT Implementation	$0.20	$0.00	$0.00	$0.20	$0.02
Industry	Reduced creditor recovered debt (BIA)	$46.96	$76.26	$103.83	$744.41	$70.27
	IT implementation	$0.20	$0.00	$0.00	$0.20	$0.02
All stakeholders	Total costs	$48.09	$78.14	$107.50	$762.69	$71.99

Table 5: Summary of monetized benefits and costs (millions)

Impact	Base year (2025)	2034	Final year (2044)	Total (present value)	Annualized value
Total benefits	$67	$106	$138	$1,040	$98
Total costs	$48	$78	$107	$763	$72
Net impact	$19	$27	$31	$277	$26

Qualitative impacts

Positive impacts

• Potential bias towards consumer proposals, which remuneration requirements under the current Rules appear to favour, would be decreased, thus ensuring that a more balanced approach is supported when LITs give advice regarding the decision to pursue a consumer proposal versus bankruptcy.
• Allowance of electronic transmission would lower the transactional cost for creditors to object to a debtor’s discharge. This could increase external oversight of the system.
• Greater clarity in language used in the Rules and Regulations would aid stakeholders in comprehension and compliance with requirements.

Sensitivity analysis

Sensitivity analysis of the impacts of the regulatory proposal was concentrated on the sections of the proposed amendments that have the largest impact, namely proposed amendments to the Rules regarding LIT remuneration for proposals and bankruptcies. The two assumptions on which the analysis is built that are deemed to be most uncertain and significant to modelled outcomes are (1) the rate of inflation and (2) the proportion in the regulatory scenario of debtors that choose bankruptcy compared to consumer proposals.

In the first case, there is a positive relation between inflation and increases in LIT remuneration relative to the baseline. As inflation increases, LITs benefit more from the Rules. Thus, if inflation is below the assumed 2% rate in the central scenario, LITs would benefit less and costs on creditors would go down. If, for example, inflation were 1%, LITs would see a decrease in their total present value benefit of $56.5 million (annualized $5 million) less than the central scenario of $680.5 ($64 million annualized), or $623.9 million (annualized $59 million). However, if the inflation rate were 5%, LITs would benefit more, and the increase in LIT remuneration would be $148 million (annualized $14 million) more than the central case.

Table 6: Impact of inflation on LIT remuneration relative to central scenario [TPV (annualized) million 2022 Can$]

Inflation	LIT remuneration	Tax revenue	Levy revenues	Creditor recovered debt
1.0%	−$56.52 (−$5.33)	−$6.07 (−$0.57)	$5.95 ($0.56)	$56.64 ($5.35)
1.5%	−$27.25 (−$2.57)	−$2.93 (−$0.28)	$2.84 ($0.27)	$27.33 ($2.58)
2.0%	$0.00 ($0.00)	$0.00 ($0.00)	$0.00 ($0.00)	$0.00 ($0.00)
2.5%	$28.20 ($2.66)	$3.05 ($0.29)	−$2.76 (−$0.26)	−$28.48 (−$2.69)
3.0%	$53.57 ($5.06)	$5.78 ($0.55)	−$5.28 (−$0.50)	−$54.08 (−$5.10)
3.5%	$81.03 ($7.65)	$8.77 ($0.83)	−$7.78 (−$0.73)	−$82.02 (−$7.74)
4.0%	$102.87 ($9.71)	$11.12 ($1.05)	−$9.99 (−$0.94)	−$104.00 (−$9.82)
4.5%	$125.30 ($11.83)	$13.55 ($1.28)	−$12.11 (−$1.14)	−$126.74 (−$11.96)
5.0%	$146.27 ($13.81)	$15.82 ($1.49)	−$14.12 (−$1.33)	−$147.97 (−$13.97)

A similar trend occurs in regards to the proportion of insolvencies that occur as bankruptcies. As this proportion increases, so does the benefit of increased LIT remuneration. If the actual value is less than the assumed 30%, LIT remuneration benefits would decrease; whereas, if the proportion is more than 30%, LIT remuneration benefits increase, as shown in Table 7.

Table 7: Impact of bankruptcy proportion of insolvencies on LIT remuneration relative to central [TPV (annualized) million 2022 Can$]

Proportion of summary administration bankruptcies	LIT remuneration	Tax revenues	Levy revenues	Creditor recovered debt
20%	−$47.97 (−$4.53)	−$7.58 (−$0.72)	−$0.34 (−$0.03)	$55.89 ($5.28)
25%	−$23.99 (−$2.26)	−$3.79 (−$0.36)	−$0.17 (−$0.02)	$27.95 ($2.64)
30%	$0.00 ($0.00)	$0.00 ($0.00)	$0.00 ($0.00)	$0.00 ($0.00)
35%	$23.99 ($2.26)	$3.79 ($0.36)	$0.17 ($0.02)	−$27.95 (−$2.64)
40%	$47.97 ($4.53)	$7.58 ($0.72)	$0.34 ($0.03)	−$55.89 (−$5.28)
45%	$71.96 ($6.79)	$11.37 ($1.07)	$0.51 ($0.05)	−$83.84 (−$7.91)
50%	$95.94 ($9.06)	$15.16 ($1.43)	$0.68 ($0.06)	−$111.78 (−$10.55)
55%	$119.93 ($11.32)	$18.95 ($1.79)	$0.85 ($0.08)	−$139.73 (−$13.19)
60%	$143.91 ($13.58)	$22.74 ($2.15)	$1.02 ($0.10)	−$167.67 (−$15.83)
65%	$167.90 ($15.85)	$26.53 ($2.50)	$1.19 ($0.11)	−$195.62 (−$18.47)
70%	$191.88 ($18.11)	$30.32 ($2.86)	$1.36 ($0.13)	−$223.57 (−$21.10)
75%	$215.87 ($20.38)	$34.11 ($3.22)	$1.53 ($0.14)	−$251.51 (−$23.74)
80%	$239.86 ($22.64)	$37.90 ($3.58)	$1.71 ($0.16)	−$279.46 (−$26.38)

Distribution analysis

Consumer debtors

While consumer debtors would not directly pay more for LIT services, there is an expectation that the proposed regulatory amendments would be overall beneficial for them, by creating conditions that make it easier to seek out LIT services, and by removing the potential for biased advice favouring consumer proposals.

These changes would be more beneficial to rural areas than urban areas, since LITs operating in smaller communities have fewer opportunities to take advantage of economies of scale. These economies allow urban-based operations to be profitable, even with shrinking real remuneration that would continue in the absence of these amendments. According to the 2021 Canadian Consumer Debtor Profile,^{footnote 3} 15% of consumer insolvencies come from rural areas.

In terms of other differences, insolvency tends to impact Canadians who have lower household income ($2,566 median monthly income for insolvent debtors versus the general population of $5,933). The ratio between male and female debtors in 2021 was 51% to 49%, close to the ratio in the general population of approximately 50-50. The average age of a debtor was 46 in 2021, slightly higher than the average age in Canada of 42 years.

Regional

Average filings from 2016 to 2022 are shown in the table below. While the average assets for insolvent individuals vary between different provinces and territories, which would result in variances from the Canada-wide results, these proportions can be used to give a general idea of the breakdown of the TPV and annualized impacts by region of the major impacts discussed in the “Benefits and costs” section, focused on the proposed changes to LIT remuneration.

Table 8: Regional impacts [TPV (annualized) million 2022 Can$]

Region	Filing percentage	Population percentage	LIT remuneration	Tax revenues	Levy revenues	Creditor recovered debt
Canada	100%	100%	$680.4 ($64.23)	$81.8 ($7.73)	−$17.9 (−$1.69)	−$744.4 (−$70.27)
Newfoundland and Labrador	2.0%	1.3%	$13.8 ($1.30)	$1.7 ($0.16)	−$0.4 (−$0.03)	−$15.1 (−$1.42)
Nova Scotia	4.1%	2.6%	$27.8 ($2.63)	$3.3 ($0.32)	−$0.7 (−$0.07)	−$30.5 (−$2.87)
Prince Edward Island	0.5%	0.4%	$3.5 ($0.33)	$0.4 ($0.04)	−$0.1 (−$0.01)	−$3.9 (−$0.36)
New Brunswick	3.4%	2.1%	$23.1 ($2.18)	$2.8 ($0.26)	−$0.6 (−$0.06)	−$25.3 (−$2.39)
Quebec	31.5%	22.0%	$214.4 ($20.24)	$25.8 ($2.43)	−$5.6 (−$0.53)	−$234.6 (−$22.14)
Ontario	32.5%	39.0%	$221.0 ($20.86)	$26.6 ($2.51)	−$5.8 (−$0.55)	−$241.7 (−$22.82)
Manitoba	2.3%	3.6%	$16.0 ($1.51)	$1.9 ($0.18)	−$0.4 (−$0.04)	−$17.5 (−$1.65)
Saskatchewan	2.7%	3.0%	$18.3 ($1.72)	$2.2 ($0.21)	−$0.5 (−$0.05)	−$20.0 (−$1.89)
Alberta	12.3%	11.8%	$83.7 ($7.90)	$10.1 ($0.95)	−$2.2 (−$0.21)	−$91.6 (−$8.64)
British Columbia	8.6%	13.8%	$58.3 ($5.50)	$7.0 ($0.66)	−$1.5 (−$0.14)	−$63.7 (−$6.02)
Territories	0.1%	0.3%	$0.7 ($0.06)	$0.1 ($0.01)	−$0.0 (−$0.00)	−$0.7 (−$0.07)

While it can be expected that an insolvent consumer living in a particular province or territory would seek the services of an LIT in the same province or territory, there is likely more variance in terms of creditors, which are often large financial organizations.

Small business lens

To the extent that some creditors are also small businesses, these proposed regulatory amendments would impose costs on them by lowering the amount of debt they are able to recover from insolvent individuals. In addition, a portion of businesses that offer LIT services are also small businesses and would therefore benefit from changes to the rules governing how they are remunerated for the services they provide during insolvency proceedings. Changes in LIT fee structures would also necessitate updates to the software packages LITs use to track accounting of estates. As discussed in the cost-benefit analysis, most LITs use software packages provided by one of two large software development firms, although some are known to develop their own in-house versions. Finally, small businesses implicated in insolvency proceedings would benefit from regulatory modernization amendments, which would allow them to reduce resources wasted on compliance with outdated business practices.

In terms of LITs, the OSB lists locations of offices that offer LIT services.^{footnote 4} Just over 47% of the roughly 3 200 offices are offices associated with business names operating in 10 or more locations. Assuming that an office may have on average 10 employees, about half (53%) of the offices offering LIT services could be considered as small businesses (i.e. having fewer than 100 employees). The proposed regulatory changes to LIT remuneration would be particularly beneficial to these offices and the regulatory amendments are proposed with the intent to allow smaller operations to continue. These LITs offer services less likely to be provided by larger operations in remote and rural communities. Changing the timing of payments for LITs, which allows for earlier draws on insolvent estates, is a proposed change that was also included to respond specifically to the cash flow challenge faced by smaller LIT firms. In addition, regulatory modernization components intended to reduce administrative burden would be more beneficial for smaller operators that are less able to handle these costs due to lower economies of scale.

At the same time, the regulatory proposal recognizes that funds taken from the estates of insolvent individuals to provide remuneration for LIT services have a direct impact on creditors, some of which are also small businesses, by reducing how much they are able to recover from “bad debt.” The regulatory design specifically identified the need to consider this impact and is also why other, more generous, schemes for LIT remuneration were rejected. While it is hard to determine how many creditors fit the small business definition, it is possible to estimate the potential impact on them. Each consumer insolvency has on average between five and six listed creditors, with many of these being credit card companies, unsecured loan providers (mostly banks), student loan providers, and the Canada Revenue Agency,^{footnote 3} none of which are small businesses. In 2021, about 60% of consumer insolvencies reported having “other” types of liabilities that could be from small businesses, with a total of $5,798 in median liabilities. As 30% of the Canadian gross domestic product economy comes from small business activity, it is fair to assume that about $1,739 of this liability per insolvency is owed to small businesses, which is 3.7% of the total median insolvency debt of $46,551. It is therefore assumed that 3.7% of the lowered creditor recovered debt estimated in the cost-benefit analysis would be attributable to less money recovered by small business creditors.

Regarding regulatory flexibility options that would provide small businesses with alternative, potentially lower-cost options to comply with the Rules and the Regulations, these were considered unnecessary. For the 53% of LITs that are small businesses, the proposed regulatory amendments would be unambiguously beneficial and are intended to make it easier for these operations to continue to operate profitably. The proposed regulatory amendments would endeavour to provide a level playing field for all, and seek to introduce streamlined and modern options for insolvency proceedings. Furthermore, there is no means to limit burden on small businesses that are creditors that would not be outside of the legal legislative framework for insolvencies in Canada. Being a small business, on its own, is not a sufficient reason to receive preferential treatment. Such treatment is reserved for secured debt when the creditor has a claim of debtor assets. Additionally, creditors of consumers undergoing insolvency proceedings are mainly large businesses.

Small business lens summary

• Number of small businesses impacted: N/A^{footnote 5}Number of years: 20 (2025 to 2044)
• Price year: 2022
• Present value base year: 2025
• Discount rate: 7%

Results as reported in the tables are rounded; however, totals have been calculated using unrounded results, and thus may vary from the sum of values as they appear.

Table 9: Benefits

Type of benefit	Description of benefit	Present value	Annualized value
Administration	Various administrative burden reductions as described in the "One-for-one rule" section	$15,762,678	$1,487,885
Compliance	Regulatory modernization compliance benefits	$96,142,384	$9,075,161
Finance	Increased revenue for small business LIT operations	$360,636,119	$34,041,498
Total	Total benefits	$472,541,181	$44,604,544

Table 10: Costs

Type of cost	Description of cost	Present value	Annualized value
Compliance	IT and implementation costs	$53,000	$5,003
Financial	Decreased debt recovery for small business creditors	$27,543,323	$2,599,895
Total	Total costs	$27,596,323	$2,604,898

Table 11: Net impacts

Amount	Present value	Annualized value
Net impact on all impacted small businesses [Total benefits minus total costs]	$444,944,858	$41,999,647
Average net impact on each impacted small business [Net impact divided by number of impacted small businesses]	N/A	N/A

One-for-one rule

The one-for-one rule applies, since there is an incremental decrease in administrative burden on businesses, and the proposal is considered burden out under the rule. The proposed regulatory amendments would achieve an annualized reduction of $941,148 (2012 Can$) in administrative burden as estimated using the Red Tape Reduction Regulations’ prescribed method (10-year period of analysis, 7% discount rate). No regulatory titles are repealed or introduced.

Specific requirements that have been identified as meeting the definition of administrative burden as defined by the Red Tape Reduction Act, and the assumptions used in the calculations of the burden reduction/increase follows. All assumptions have been verified via consultations with LITs and are based on their experience or on historical data on insolvency filings.

1. Record-keeping requirements

Proposed amendments would explicitly allow the use of electronic bookkeeping for records and documents relating to the administration of estates. The preparation, filing and retention of records related to past insolvencies are directly related to proof of compliance with the Rules. LITs are subject to office visits where they are required to provide these records to enforcement officers. Office visits occur about once every four years; therefore, each year 25% of LITs are subject to an office visit.

This requirement applies to LITs, of which there are approximately 1 000. Based on the forecasts used in the cost-benefit analysis, the annualized number of insolvency filings is set at 139 140, with each LIT handling on average 139 per year.

Table 12: Savings related to amendments to record-keeping requirements

Activity	Cost of labour (2012 Can$)	Stakeholders	Frequency	Time savings
Showing documents to enforcement agents	$20.09 — office support occupations	LIT 25% of 1 000 per year	Once per year	1 hour
Preparing hard copies of files	$20.09 — office support occupations	1 000 LITs	139 times per year	25 minutes

2. Removal of various requirements to receive consent prior to sending communications electronically

The proposed regulatory amendments would remove requirements for stakeholders to receive consent to send information, such as documents and notifications, electronically. The purpose of these requirements is to prove that the intended recipient is willing and able to receive the information in this format. When these requirements were originally introduced, digital communications were not as pervasive as they are now, and the requirements no longer serve a useful purpose. There are two instances of this type of change.

• Long-term contract nullification under the BIA: This notification is sent when LITs must inform businesses with contractual agreements (leases, etc.) with the debtor that these contracts must be suspended as a result of insolvency proceedings. It is assumed that most of these notices are done under commercial insolvencies, of which there are forecasted to be annualized 1 931 (1.9 per LIT), and that these notices occur on average 30 times per insolvency. It is also assumed that contacting companies to receive consent takes 25 minutes.
• Long-term contract nullification under the CCAA: The same change would be made for contacting companies under the CCAA to terminate or suspend long-term contracts. Annualized forecast of CCAA filings over the assessment period is 54.1 per 1 000 LITs, which implies that 5.41% would be impacted. CCAA filings are more complex than those under the BIA, and involve more contractual agreements, which have been estimated to be 300 per filing.

Table 13: Savings related to the removal of various requirements to receive consent prior to sending communications electronically

Activity	Cost of labour (2012 Can$)	Stakeholders	Frequency	Time savings
Contact debtors’ long-term co-contractors (Rules)	$25.20 (finance administrative occupation)	1 000 LITs	There are about 1 931 (1.9 per LIT) commercial filings per year and 30 contacts per filing, for a frequency of 58.	25 minutes
Contact debtors’ long-term co-contractors (Regulations)	$25.20 (finance administrative occupation)	5.41% of 1 000 LITs	300 per filing	25 minutes

3. Authorization of electronic signatures

Amendments to the Regulations would clarify that a signature can be affixed digitally to prescribed documents that require one. As signatures are a means of providing proof that consent has been obtained or as certification that information provided is true, they are an administrative burden in nature. These signatures need to be prepared by the LIT, and are mostly signatures of the LIT or the debtor.

The annualized estimated number of CCAA filings over the assessment period is 54.1 per 1 000 LITs (5.41% of LITs doing a CCAA filing in a year). Time savings involved are assumed to be 25 minutes for avoiding the task of printing a document, signing, and then scanning versus attachment of an electronic signature. Each filing would have, according to consultations, 20 to 50 such documents, such that the frequency has been assumed to be 35.

Table 14: Savings related to the authorization of electronic signatures

Activity	Cost of labour (2012 Can$)	Stakeholders	Frequency	Time savings
Printing, signing, and scanning of prescribed documents	$25.20 (finance administrative occupation)	5.41% of 1000 LITs	35	25 minutes

Regulatory cooperation and alignment

The proposal is not related to a work plan or commitment under a formal regulatory cooperation forum.

International obligations

The proposal is not related to any international obligations.

Effects on the environment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that a strategic environmental assessment is not required and an exemption was granted.

Gender-based analysis plus

No impacts based on gender and other identity factors have been identified for this proposal.

Implementation, compliance and enforcement, and service standards

Implementation

Most of the regulatory amendments would come into force on the date on which the regulatory proposal is registered. However, changes to the tariff and to the threshold applicable to summary administration bankruptcies under the Rules would require software updates to facilitate implementation by LITs and by the OSB; therefore, it is proposed that they come into force one year after they are registered.

To ensure the effective and efficient implementation of the proposed regulatory amendments, the OSB would adopt a compliance promotion approach. When they are published in the Canada Gazette, Part II, a notice would be emailed to all LITs informing them of the regulatory amendments and outlining how these may affect their operations. Additionally, the OSB would publish information regarding the regulatory amendments online for all other stakeholders to access, and will put in place a detailed and targeted communication and outreach plan to reach various stakeholders. The majority of the proposed regulatory amendments would affect LITs directly, whereas a select few would affect all types of stakeholders.

Compliance and enforcement

To fulfil part of its mandate, the OSB has various compliance and enforcement strategies and policies within its repertoire under the Compliance Framework. The Compliance Framework includes Trustee Compliance (TC) and Debtor Compliance (DC). These categories within the Compliance Framework would be used as compliance and enforcement strategies to address non-compliance of the new or amended sections of the Rules and Regulations. The OSB will also continue to take action when creditor non-compliance occurs. No new instruments are required.

Contact

Stakeholders are invited to provide feedback on the regulatory proposal. Submissions are to be sent to

Miranda Killam
Deputy Superintendent
Regulatory Policy and Public Affairs
Office of the Superintendent of Bankruptcy
235 Queen Street
Ottawa, Ontario
K1A 0H5
Email: osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council proposes to make the annexed Regulations Amending the Bankruptcy and Insolvency General Rules and the Companies’ Creditors Arrangement Regulations under section 209^{footnote a} of the Bankruptcy and Insolvency Act ^{footnote b} and section 62^{footnote c} of the Companies’ Creditors Arrangement Act ^{footnote d}.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. They are strongly encouraged to use the online commenting feature that is available on the Canada Gazette website but if they use email or mail, the representations should cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the Office of the Superintendent of Bankruptcy, 235 Queen Street, Ottawa, Ontario K1A 0H5 (email: osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca).

Ottawa, November 20, 2025

Janna Rinaldi
Acting Assistant Clerk of the Privy Council

Regulations Amending the Bankruptcy and Insolvency General Rules and the Companies’ Creditors Arrangement Regulations

Bankruptcy and Insolvency Act

Bankruptcy and Insolvency General Rules

Amendments

1 (1) The portion of subsection 5(1) of the Bankruptcy and Insolvency General Rules ^{footnote 6} before paragraph (a) is replaced by the following:

5 (1) A notice or other document that is received by a Division Office outside of its business hours is deemed to have been received

(2) The Rules are amended by adding the following after subsection 5(1):

(1.1) Subsection (1) does not apply to documents that are filed electronically.

2 The portion of subsection 6(2) of the French version of the Rules before paragraph (a) is replaced by the following:

(2) Sauf disposition contraire des présentes règles, les avis et autres documents à remettre ou à envoyer sous le régime de la Loi ou des présentes règles :

3 Subsection 31(1) of the Rules is replaced by the following:

31 (1) An appeal to a court of appeal referred to in subsection 183(2) or (2.1) of the Act must be made by filing a notice of appeal at the office of the registrar of the court appealed from, within 10 days after the day on which the order or decision appealed from was made, or within any further time as a judge of the court of appeal stipulates.

4 Subsection 58.1(1) of the Rules is replaced by the following:

58.1 (1) For the purposes of section 156.1 of the Act, the amount required to be paid under the agreement must not exceed the amount that a trustee may claim under subsections 128(1) and (2).

5 Paragraph 64(2)(a) of the Rules is replaced by the following:

• (a) serving a notice of objection on the trustee or sending a notice of objection to the trustee by registered mail, courier or electronic transmission;

6 Paragraph 66(2)(a) of the Rules is replaced by the following:

• (a) serving a notice of objection on the trustee or sending a notice of objection to the trustee by registered mail, courier or electronic transmission, which notice of objection must be received by the trustee before the start of the hearing;

7 Subsection 68(1) of the Rules is replaced by the following:

68 (1) Unless the court orders otherwise, a trustee shall keep, for at least four years after the date on which the trustee is discharged, the books, records and documents relating to the administration of the estate, whether in paper or electronic form.

8 Section 69 of the Rules is replaced by the following:

69 No bankruptcy application filed with the registrar in the judicial district of the locality of the debtor may be served under subsection 70(1) unless the court has signed it.

9 Sections 94.1 and 95 of the Rules are replaced by the following:

94.1 The notice to disclaim or resiliate an agreement that is given by the debtor under subsection 65.11(1) of the Act must be served or sent by registered mail, courier or electronic transmission.

95 The notice to disclaim or resiliate a lease that is given by an insolvent person under subsection 65.2(1) of the Act must be served or sent by registered mail, courier or electronic transmission.

10 The Rules are amended by adding the following before section 96:

95.1 For the purposes of the definition consumer debtor in section 66.11 of the Act, the prescribed amount is $325,000.

11 Paragraph 100(2)(a) of the Rules is replaced by the following:

• (a) serving a notice of objection on the administrator or sending a notice of objection to the administrator by registered mail, courier or electronic transmission;

12 Paragraph 102(2)(a) of the Rules is replaced by the following:

• (a) serving a notice of objection on the administrator or sending a notice of objection to the administrator by registered mail, courier or electronic transmission, which notice of objection must be received by the administrator before the start of the hearing;

13 Subsection 104(3) of the Rules is replaced by the following:

(3) The notice must be served personally on the contributory, sent by registered mail or courier to the contributory’s latest known address or the address shown in the stock register or other books of the bankrupt corporation or sent to the contributory by electronic transmission.

14 Section 113 of the Rules is replaced by the following:

113 The notice of disallowance or notice of valuation provided by a trustee under subsection 135(3) of the Act to a person whose claim, right to a prior rank or security has been disallowed or been subject to a valuation has been made, in whole or in part, must be served or sent by registered mail, courier or electronic transmission.

15 Section 124 of the French version of the Rules is replaced by the following:

124 Le préavis de mise à exécution d’une garantie ou d’une sûreté aux termes du paragraphe 244(1) de la Loi est établi sur un formulaire prescrit par le surintendant et il est signifié ou envoyé par courrier recommandé, par service de messagerie ou, si les parties y consentent, par voie électronique.

16 (1) Subsection 128(1) of the Rules is replaced by the following:

128 (1) The only fees that may be claimed by a trustee for services performed in a summary administration are those that are calculated on the total receipts remaining after deducting necessary disbursements relating directly to the realization of the property of the bankrupt and the payments to secured creditors, in accordance with the following percentages:

• (a) 100 per cent on the first $1,700 or less of receipts; and
• (b) 45 per cent on the portion of the receipts exceeding $1,700 but not exceeding the amount set out in section 130.

(2) The portion of subsection 128(2) of the Rules before paragraph (a) is replaced by the following:

(2) The trustee may claim, in addition to the fees claimed under subsection (1), only the following amounts:

(3) Subsection 128(2) of the Rules is amended by striking out “and” at the end of paragraph (d) and by replacing paragraph (e) with the following:

• (e) a lump sum of $140 in respect of administrative disbursements; and
• (f) any reasonable expenses incurred for the services of an interpreter under section 57 or subsection 108(2).

(4) Subsections 128(3) and (4) of the Rules are replaced by the following:

(3) A trustee in a summary administration may withdraw from the bank account used in administering the estate of the bankrupt, as an advance on the amount of fees determined under subsection (1),

• (a) $850, at the time of the mailing of the notice of bankruptcy; and
• (b) an additional $850, 90 days after the date of the bankruptcy.

(4) The advance withdrawn by the trustee under subsection (3) must not exceed 75 per cent of the balance of the bank account used in administering the estate of the bankrupt.

17 (1) The portion of subsection 129(1) of the Rules before paragraph (c) is replaced by the following:

129 (1) For the purposes of paragraph 66.12(6)(b) of the Act, the payment of only the following fees and expenses of the administrator may be provided for in a consumer proposal:

• (a) a maximum amount of $850, payable on the filing of a copy of the consumer proposal with the official receiver;
• (b) a maximum amount of $850, payable on the approval or deemed approval of the consumer proposal by the court;

(2) Subsection 129(1) of the Rules is amended by striking out “and” at the end of paragraph (f), by adding “and” at the end of paragraph (g) and by adding the following after paragraph (g):

• (h) any reasonable expenses incurred for the services of an interpreter under section 57 or subsection 108(2).

(3) Subsection 129(2) of the Rules is repealed.

18 Section 130 of the Rules is replaced by the following:

130 For the purposes of subsections 49(6) and (8) of the Act, the prescribed amount is $20,000.

19 Section 131 of the Rules is replaced by the following:

131 (1) For the purposes of paragraph 66.12(6)(b) of the Act, the maximum amount of the fees and expenses in respect of counselling is $120 per session, if counselling is provided on an individual basis, and $35 per person per session, if counselling is provided on a group basis.

(2) For the purposes of subsection 157.1(1) of the Act, the maximum amount of the costs of counselling is $120 per session, if counselling is provided on an individual basis, and $35 per person per session, if counselling is provided on a group basis.

20 The Rules are amended by adding the following after section 136.1:

Adjustment — Consumer Price Index

136.2 (1) Beginning on April 1, 2027, every amount provided for under section 95.1, paragraphs 128(2)(e) and 129(1)(a) and (b) and sections 130 and 131 is to be adjusted in each fiscal year on April 1 by the percentage change over 12 months in the April All-items Consumer Price Index for Canada, as published by Statistics Canada under the Statistics Act, for the previous fiscal year.

(2) If the amount calculated under subsection (1) is not a multiple of five, it must be rounded to the nearest multiple of five or, if it is equidistant between two multiples of five, rounded to the lower multiple of five.

(3) For the purposes of subsection (1), the amounts determined under paragraphs 128(2)(e) and 129(1)(a) and (b) and sections 130 and 131 in respect of a proceeding are the adjusted amounts as of the day on which the proceeding is commenced.

Transitional Provision

21 Subsection 58.1(1) and sections 128 to 131 of the Bankruptcy and Insolvency General Rules, as they read immediately before the day on which sections 4 and 16 to 19 of these Regulations come into force, continue to apply in respect of any proceeding that was commenced before that day.

Companies’ Creditors Arrangement Act

Companies’ Creditors Arrangement Regulations

Amendments

22 The Companies’ Creditors Arrangement Regulations ^{footnote 7} are amended by adding the following after section 4:

Signature

4.1 If a document filed for the purposes of these Regulations is required to bear a signature, the signature may be affixed by any process that makes it possible to identify the signatory and establish a link between the signatory and the signed document.

23 (1) Paragraph 9(a) of the Regulations is replaced by the following:

• (a) Form 1 of the schedule, entitled “Information Pertaining to Initial Order”, to be filed electronically or by facsimile or within two business days after the day on which the initial order is made;

(2) Paragraph 9(d) of the Regulations is replaced by the following:

• (d) Form 3 of the schedule, entitled “Debtor Company Information Summary (Following the Order Discharging the Monitor)”, to be filed electronically or by facsimile within five business days after the day on which the court’s order discharging the monitor takes effect; and

24 Subsection 11(1) of the Regulations is replaced by the following:

Public record

11 (1) For the purposes of subsection 26(1) of the Act, the prescribed information is the information set out on Form 1 of the schedule and the prescribed period is 10 years after the day on which the court’s order discharging the monitor takes effect.

25 Section 13 of the Regulations is replaced by the following:

Notice to disclaim or resiliate

13 For the purposes of subsection 32(1) of the Act, Form 4 of the schedule, entitled “Notice by Debtor Company to Disclaim or Resiliate an Agreement”, is prescribed and the prescribed manner of giving notice is by personal service, registered mail, courier, facsimile or other electronic transmission.

Coming into Force

26 (1) Subject to subsection (2), these Regulations come into force on the day on which they are registered.

(2) Sections 4, 10 and 16 to 20 come into force on the first anniversary of the day on which these Regulations are registered.

Terms of use and Privacy notice

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