Report on 2021-2022 Business Plan Priorities

Table of contents

• Message from the Superintendent
• 2021-22 Highlights
• Business Priorities
  1. Comprehensive Regulatory Review
  2. Helping Canadians: Finding the Right Debt Solution
  3. Strengthening the OSB’s Compliance Framework
  4. Operational Training
  5. Licensing Modernization Review
  6. Financial Risks and Trend Analysis
• Ongoing Activities
• Registrars Conference
• Representativeness in the LIT Profession
• Maintaining a Respectful and Supportive Workplace
• Looking Ahead

Message from the Superintendent

I am pleased to share with all Canadians the Office of the Superintendent of Bankruptcy (OSB) Report on 2021-22 Business Plan Priorities.

This report summarizes the OSB’s achievements against its priorities for 2021-22 and highlights its continued progress towards improving and modernizing the insolvency system on behalf of Canadians.

During the past year, the OSB continued to fulfil its mandate and advance its priorities, while also addressing challenges resulting from the COVID-19 pandemic. The OSB concluded its consultation with stakeholders on a Comprehensive Review of Directives and Regulations (CRDR) and laid the groundwork to modernize directives, update forms, and recommend changes to regulations under the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act (CCAA). The OSB also consulted on the modernization of physical office requirements for Licensed Insolvency Trustees (LITs) in an effort to identify areas for potential improvement while ensuring high quality services that meet the needs of all stakeholders.

Through a webinar series hosted by INSOL International and the World Bank Group, I shared Canada’s perspective on “How insolvency regulators responded to COVID-19 and what happens next”, and continued to engage with international counterparts as a member of the executive committee for the International Association of Insolvency Regulators and as a participant of the Diversity and Inclusiveness working group. The OSB also continued to engage with federal and provincial partners and stakeholders, including by establishing a committee that identifies financial risks and trends that could have an impact on the integrity of the Canadian insolvency system.

To further strengthen the Compliance Framework (CF), the OSB reviewed its risk-based approach to debtor compliance and advanced its new Debtor Compliance Management System (DCMS) with artificial intelligence (AI) capabilities and continued to enhance its risk assessment model for LIT compliance.

In an effort to help Canadians find the right debt solution, and based on research to better understand the pathways Canadians take to arrive at debt solutions, the OSB added useful tools to its Debt Solutions Portal, and will continue to do so and work with federal partners to promote this information.

Mindful of the importance of maintaining a respectful, healthy, diverse and inclusive workplace for its employees, the OSB continued to enhance its recruitment, talent management and operational training practices, thereby supporting organizational excellence, one of OSB’s strategic objectives.

As always, I am thankful for the exceptional dedication, professionalism, and support of OSB employees in accomplishing key results for the benefit of the insolvency system and Canadians. Please read on for additional details on the OSB’s accomplishments in 2021-22.

Elisabeth Lang
Superintendent of Bankruptcy

2021-22 Highlights

The OSB contributes to an efficient marketplace by maintaining the integrity of the Canadian insolvency system, thereby strengthening confidence in the Canadian economy. Its operational activities are essential in the delivery of its mandate and are key to achieving results for the benefit of the insolvency system. Here are some highlights.

Regulatory Policy and Public Affairs

The OSB:

• Published new position papers on:
• The distribution of post-filing interest on proven claims in bankruptcies and proposals, which specifies when post-filing interest on proven claims are to be paid in bankruptcies and proposals; and
• Deemed Annulled Consumer Proposals, to clarify whether a consumer proposal can be revived without first curing the monetary default that caused the annulment and when the first payment is due after the revival of the consumer proposal.
• Completed a consultation with stakeholders on Modernizing of Physical Office Requirements for LITs to seek feedback on whether existing physical office requirements remain necessary, both during the pandemic and going forward as Canadians return to in-person activities.
• Amended the following directives:
• No. 6R5, Assessment of an Individual Debtor, to incorporate certain amendments;
• No. 32R, Trustee Electronic Recordkeeping, to remove remaining requirements to keep certain original paper documents; and
• No. 6R4, Assessment of an Individual Debtor, and No. 1R7, Counselling in Insolvency Matters, to allow LITs to conduct assessments in person or by videoconference, without prior OSB approval.
• Updated the following directives:
• No. 5R7, Estate Funds and Banking, to support electronic funds transfers;
• No. 8R19, The Bankruptcy and Insolvency Act Forms, and the Estate Information Summary (EIS) to amend the Statement of Affairs Forms 78 and 79, and include a new jurat that allows debtors to swear oaths remotely and to collect optional gender and diversity information; and
• No. 11R2-2022, Surplus Income, Appendix A to reflect the Superintendent’s Standards for 2022.

Licensing

The OSB:

• Granted 35 new trustee licences as part of the 2021 Oral Boards of Examination;
• Renewed licences for 1,197 insolvency professionals (corporate and individual); and
• Administered 1,293 licensing service requests from LITs.

Licensed Insolvency Trustee Compliance

The OSB:

• Conducted 146 remote LIT Office Visits (LITOV) to validate compliance with insolvency legislation;
• Initiated 98 compliance actions of varying types to address non-compliance by 30 LITs;
• Put conservatory measures in place to seize and protect approximately 336 estates which held approximately $1.3 million in trust; and
• Initiated one new Professional Conduct Investigation, continued five others and initiated the cancellation of three trustee licences pursuant to paragraph 13.2(5) of the BIA.

Debtor Compliance

The OSB:

• Undertook 558 examinations of debtors with regard to their conduct, the causes of their insolvency, the disposition of their property, and any other relevant subjects, as appropriate;
• Carried out 220 court interventions to remedy non-compliant behaviour by debtors; and
• Issued 43 new Superintendent Investigation Orders for criminal investigation:
• Charges were laid in 15 cases in 2021-22;
• 134 investigations were carried over into 2022-23; and
• An additional 42 cases are ongoing with the Public Prosecution Service of Canada.

Statutory Complaints

The OSB:

• Received 888 complaints, representing 0.96% of insolvencies filed in 2021-22:
• Acknowledged 98% of complaints within 5 days; and
• Responded to 81% of complaints within 30 days.
• Observed the following percentages for complaints against stakeholders:
• 52% against trustees;
• 23% against debtors;
• 13% against creditors: and
• 12% regarding other stakeholders and legislation.

Consumer Protection and Insolvency Information

The OSB:

• Accepted 92,330 insolvency filings;
• Recorded 18 filings under the CCAA;
• Responded to 16,181 enquiries about the insolvency system:
• Handled 94% of enquiries within 5 days; and
• Implemented changes to the province of Quebec court number process.
• Published monthly, quarterly, and annual insolvency statistics on its website;
• Completed 99 external requests for insolvency data; and
• Monitored its website traffic, including the views of its three most visited web pages:
• Home Page (135,001);
• Insolvency Counselling Program (104,363); and
• You Owe Money — Considering bankruptcy (72,774).

Business Priorities

The OSB’s business priorities are aligned with its strategic objectives of engagement, compliance, and organizational excellence, and support its efforts toward modernizing Canada’s insolvency system and contributing to the efficiency of the Canadian marketplace. Undertaken as short-term or multi-year projects, OSB’s business priorities are planned and implemented to enhance program delivery and results. Below is a summary of the 2021-22 accomplishments.

Strategic Objectives

Strategic Objectives

1. Comprehensive Regulatory Review
Success Measures		Key Achievements in 2021-22
Implementation of changes to the regulatory framework, in accordance with the implementation plan, is commenced	Ongoing	The OSB: Concluded a 90-day public consultation on CRDR; Completed the analysis and published stakeholder submissions on CRDR; and Established plans to undertake work in 2022-23 to: Modernize directives and update forms through amendments; Amend the Directive on Surplus Income; and Recommend changes to regulations under the BIA and CCAA.

2. Helping Canadians: Finding the Right Debt Solution
Success Measures		Key Achievements in 2021-22
The debt solutions portal is updated with new tools and information	Completed	The OSB: Added a Debt Questionnaire tool to the Debt Solutions Portal.
Partners are engaged to provide indebted Canadians with information and promote the OSB’s debt solutions portal	Ongoing	The OSB: Developed a marketing plan which included: The promotion of its Debt Questionnaire tool through the Financial Consumer Agency of Canada (FCAC) and its financial literacy networks; and Activities continuing throughout 2022-23 such as: Continued promotion via social media and stakeholders; and The development of a promotional web package for use by federal partners.

3. Strengthening the OSB’s Compliance Framework
Success Measures		Key Achievements in 2021-22
Solutions to ensure the effective enforcement of the most serious insolvency offences in Canada are developed	Completed	The OSB: Established a new Integrity and Enforcement branch with accountability for major cases and criminal enforcement and engaged with law enforcement agencies to increase the likelihood of successful investigations and prosecutions of insolvency offences; and Explored best practices and options for continuing to enhance internal criminal enforcement capabilities.
The new Debtor Compliance Enforcement Management Tool, integrated to the Debtor Detection Analysis System (DDAS) with AI capabilities, is implemented	Completed	The OSB: Implemented the DCMS which is integrated to the DDAS with AI capabilities; Revised the Debtor Compliance section of the CF; and Developed and delivered new procedures, user guides, templates and training to support implementation.
Program and regulatory enhancements are implemented to improve the effectiveness of the LIT Compliance Program	Ongoing	The OSB: Initiated the development of a Statement of Receipts and Disbursements (SRD) Risk Model, the first step in the creation of the LIT Risk Assessment Model; Completed an insolvency software training guide for enhanced compliance monitoring during LITOVs; and Published the Compliance Promotion Framework with the objective of improving overall compliance outcomes.
A Trustee Annual Report (TAR) is implemented	Ongoing	The OSB: Undertook work to implement a TAR to support shared compliance and reduce the administrative burden on LITs by: Publishing a discussion paper inviting feedback on items contemplated for integration into the TAR; and Establishing a working group with LITs to review TAR requirements.
Updating the IT system to support estate administration has begun	Ongoing	The OSB: Established the foundation of the estate administration and management capabilities for the new system; and Began integration between the new Estate Administration system and the OSB’s E-Filing system.
Necessary actions are taken in light of identified risks arising from LIT relationships with debt advisors	Ongoing	The OSB: Completed a pilot of LITOVs focused on issues related to the debt advisory marketplace which will be assessed in support of further action, as required early in 2022-23.
Engagement with federal and provincial partners to identify and address misleading advertising and deceptive practices in the debt advisory marketplace	Ongoing	The OSB: Partnered with FCAC to make revisions to the Credit Counselling section of FCAC’s website; and Met with Consumer Protection Ontario and Saskatchewan Consumer Protection, shared debt advisory marketplace research, discussed approaches to identify and address misleading advertising and deceptive practices and will continue to collaborate and share information with provincial partners in 2022-23.

4. Operational Training
Success Measures		Key Achievements in 2021-22
Priority training courses are delivered	Completed	The OSB: Delivered priority training courses based on identified needs, incorporating digital tools to optimize learning.
New modules and materials to expand its current learning catalogue are developed	Completed	The OSB: Developed new training modules and materials for its operational employees based on identified needs, incorporating digital tools to optimize learning; and Developed learning paths and tools to support employee learning needs.
A Day in the Life of an LIT is delivered and additional materials specific to the administration of corporate files are developed	Ongoing	The OSB: Continued to deliver the Day in the Life of an LIT program; and Initiated development of additional materials specific to the administration of corporate files, scheduled for implementation in 2022-23.
A Learning Management System to administer learning modules and gather analytics to enhance the planning and evaluation of learning activities is implemented	Completed	The OSB: Implemented a Learning Management System to administer learning modules and gather analytics to enhance the planning and evaluation of learning activities.
A framework to evaluate training program performance during fiscal year 2022–23 is developed	Completed	The OSB: Implemented a standardized form to gather feedback on learning activities; and Developed a framework to evaluate training program performance.

5. Licensing Modernization Review
Success Measures		Key Achievements in 2021-22
A consultation with stakeholders is completed and the feedback received is analyzed	Completed	The OSB: Consulted with stakeholders on licensing modernization through the CRDR; and Analyzed stakeholder feedback to identify and prioritize program enhancements.
Appropriate program enhancements are implemented	Ongoing	The OSB: Engaged with CAIRP on implementing changes to the Oral Board examinations; Implemented a pilot program for licensing options at the Oral Board; and Worked in cooperation with CAIRP, to review recommendations and discuss the implementation of additional enhancements in 2022-23.

6. Financial Risks and Trend Analysis
Success Measures		Key Achievements in 2021-22
An external environmental scan is conducted	Completed	The OSB: Completed an external environmental scan to explore the financial risks and trends emerging in the marketplace, which may impact the Canadian insolvency system.
A committee on financial risks and trend analysis is established	Completed	The OSB: Established an OSB-led committee on financial risks and trend analysis to work with partners to identify financial risks and trends that could have an impact on the integrity of the Canadian insolvency system.
Relevant risk and trend information is provided to internal and external partners, as appropriate, to support decision-making and action	Completed	The OSB: Enabled the exchange of relevant risk and trend information, via committee meetings, in support of decision-making and relevant actions.

Ongoing Activities

Registrars Conference

The OSB will continue to convene a conference for Registrars on a more regular basis, providing participants with an opportunity to discuss insolvency topics of national interest and share best practices.

In 2021-22, the OSB:

• Published the “What We Heard” summary report of the conference discussions; and
• Started designing and planning the 2022-23 Registrars Conference.

Representativeness in the LIT Profession

The OSB and CAIRP collaborated to review the representativeness of LITs and LIT feeder groups to target unintended barriers, conduct outreach activities, and ultimately increase diversity in the profession.

In 2021-22, the OSB:

• Implemented a process for self-identification data collection for LITs, Chartered Insolvency and Restructuring Professional Qualification Program (CIRP) Qualification Program (CQP) candidates, Insolvency Administration (IA), Practical Course on Insolvency Counselling (PCIC) students and Oral Board candidates (women, visible minorities, Indigenous peoples and persons with disabilities), to track progress;
• Convened a Representativeness Roundtable with select LITs to discuss best practices in the industry and identify areas for improvement;
• Collected and reported self-identification data of 2021 Oral Boards candidates;
• Published the OSB and CAIRP Joint Statement on Representativeness in the LIT Profession; and
• Published the OSB/CAIRP Guide to Promote Diversity and Inclusion.

Maintaining a Respectful and Supportive Workplace

The OSB continued to foster an inclusive and diverse workplace with the support of the Mental Health and Wellbeing Committee (MHWC). The Committee focused on maintaining a psychologically healthy, respectful, and supportive workplace at the OSB.

In 2021-22, the OSB:

• Developed the OSB Mental Health and Wellbeing Hub, designed as an information one stop shop for its employees with the objective of centralizing internal and external resources on mental health and wellbeing;
• Held quarterly events to promote wellness in the workplace; and
• Issued weekly communications to share updates on mental health-related topics.

Looking Ahead

Building on what was accomplished in 2021-22, the OSB continues to work diligently to fulfill its mandate and deliver on its priorities in spite of ongoing challenges relating to the COVID-19 pandemic. The OSB’s 2022-23 Business Plan focuses on advancing changes to modernize its regulatory framework, enhancing its compliance activities and improving its performance to effectively protect the integrity of the insolvency system for the benefit of Canadians.