Public consultations

The Office of the Superintendent of Bankruptcy (OSB) invites comments from the public and stakeholders on specific issues by launching a consultation process.

Open consultations

Proposed changes to Form 31, Proof of Claim, Form 65, Monthly Income and Expense Statement of the Bankrupt/Debtor and the Family Unit and Information (or Amended Information) Concerning the Financial Situation of the Individual Bankrupt, Form 78, Statement of Affairs (Business Bankruptcy/Proposal), and Form 79, Statement of Affairs (Non-Business Bankruptcy/Proposal)

The Office of the Superintendent of Bankruptcy (OSB) is seeking feedback from stakeholders on proposed changes to:

Please click the links above to download and review each of the proposed new Forms.
These documents are drafts and are intended solely for the purpose of seeking public comment (October 31, 2022). The current respective Forms remain in effect.

The OSB conducted a 90 day public consultation on a Comprehensive Review of Directives and Regulations which concluded in June 2021. One of the main themes addressed in the numerous comments and suggestions was for modernizing and improving forms under the Bankruptcy and Insolvency Act (BIA) for better data integrity. The OSB identified Form 31, Form 65, Form 78, and Form 79 as priorities for this exercise.

Form 65, Form 78, and Form 79 are primary prescribed documents which are required to initiate most filings under the BIA. The proposed changes to these forms will clarify the wording of questions and better reflect contemporary consumer habits and market realities. Changes are also proposed to Form 31 in order to facilitate the identification of claims for debts which may not be enforceable as a result of the limitation period.

Input gathered from this consultation will help inform the modernization of Form 31, Form 65, Form 78, and Form 79 which will be implemented by the eventual publication of a Directive.

Please provide your feedback by . Submissions are to be sent to OSB, Policy and Regulatory Affairs at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

Closed consultations

Regulatory modernization of the Bankruptcy And Insolvency Act under Bill S-6

Bill S-6

Bill S-6 was tabled in the Senate on March 31, 2022. This Bill proposes to amend the Bankruptcy and Insolvency Act (BIA) as part of the Regulatory Modernization Initiative in order to amend provisions that have, over time, become barriers to innovation. Specifically, it is proposing changes to the requirement that the notice of an ordinary bankruptcy be published in a local newspaper, as this requirement has become outdated. The BIA currently requires Licensed Insolvency Trustees (LITs) to publish notices of bankruptcy in a newspaper for ordinary administrations in order to inform creditors who may have been omitted from the list of creditors and to advise those who may have current or future dealings with the debtor of the bankruptcy. The current provision does not give LITs discretion to publish a notice of bankruptcy other than in a local newspaper, even though better outcomes might be achieved by publishing in other media formats. Modifying the format in which notices of bankruptcy are published ensures that the BIA remains responsive to changes in the digital economy and media markets. Part 1 of the Bill would modify subsections 102(4) and 155(c) of the BIA to, among other things, replace the requirement to publish a notice of bankruptcy in a local newspaper with a requirement to do so in the manner specified in the directives of the Superintendent of Bankruptcy.   

Should the Bill pass, the amended provision would give the Superintendent of Bankruptcy the discretion to issue directives that will outline the method(s) by which the notice of bankruptcy is to be published.

Consultation

The Office of the Superintendent of Bankruptcy (OSB) is inviting stakeholders to contribute comments and suggestions to determine by which method(s) the notice of bankruptcy should be published.  

Some potential methods in which the notice of bankruptcy could be published include:

  • The publication of the notices of bankruptcy on the OSB’s website;
  • The publication of the notices of bankruptcy on the bankrupt’s LIT’s website; and
  • The publication of the notices of bankruptcy on an online newspaper or trade publication.

To guide the OSB’s decision, each proposed suggestion, whether it be a potential method mentioned above or a different method, should include a list of advantages and disadvantages including considerations regarding the intent of the publication as noted above as well as any potential cost considerations.

Submissions

The OSB welcomes all suggestions on how to modernize the notice of bankruptcy publication requirement through new publication methods. The suggestions will be used to guide a directive that will prescribe bankruptcy publication requirements.

Please provide your feedback by August 19, 2022. Submissions are to be sent to OSB, Policy and Regulatory Affairs at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

To meet the accessibility requirements for Government of Canada websites, in anticipation of the possible publication of submissions, please provide your response in any of the following formats: .doc, .docx, .pdf, .txt, .rtf or HTML.

Please clearly indicate the name of the individual or the organization that should be identified as having made the submission and advise if you would prefer to remain anonymous. Should you choose to remain anonymous, no information you provide will be attributed to you personally, or to your organization. For more information on how we collect, use and protect data, please read our Privacy Notice.

Modernizing Physical Office Requirements for Licensed Insolvency Trustees

The Office of the Superintendent of Bankruptcy (OSB) is seeking input from stakeholders on two potential physical office requirement models for Licensed Insolvency Trustees (LITs). Feedback on the preferred model will be critical in determining how the OSB can best continue to promote an environment where LITs provide high quality services while adapting to modern practices.

Background

As a result of the pandemic, when people were encouraged to physically distance, many LITs began administering insolvency files and interacting with debtors and creditors predominantly online in lieu of providing in-person service.

To support these efforts, the OSB notified LITs that until , they may continue to conduct assessments using methods other than in-person for those areas where they have an OSB-approved resident or non-resident office. The OSB has also indicated, through consultation on draft amendments to the Assessment Directive and the Counselling Directive, the intention to continue to allow assessments and counselling sessions by videoconference at the debtor's fully informed choice. Following the OSB's public consultation for its comprehensive review of directives and regulations, and as part of the OSB's modernization initiative for the insolvency system, the OSB is reviewing whether existing physical office requirements remain necessary, both during the pandemic and going forward as Canadians return to in-person activities. While the existing requirements have served the insolvency system well for quite some time, it is appropriate to challenge assumptions and question what policy bases support the continuation of those requirements within the current and evolving context. This is particularly relevant for those debtors who will choose to receive services via videoconference, on a fully informed basis. Should they be prevented from selecting an LIT of their choice based solely on physical office requirements? Undoubtedly, there will remain some debtors who prefer in-person services and there will be ongoing benefits to maintaining local offices. However, in a modern business world, sound considerations should influence business decisions over regulatory requirements, unless there is a policy reason to do otherwise.

Models

Model 1: One office per province in which the LIT is licensed in order to serve that entire province

Under Model 1, an individual LIT would be required to have at least one office in each province in which the LIT is licensed to serve. This model would allow an individual LIT to provide virtual service anywhere in a province where they have an office, irrespective of the locality of the debtor within that province. Any offices opened by LITs would continue to have to be registered with, and approved by, the OSB.

Individual LITs would be required to always offer and be prepared to provide a debtor the choice of in-person service at no additional cost to the estate, including costs related to travel for meetings and court appearances, regardless of whether a debtor chose virtual service in the past. Territories and remote provincial areas that are currently not serviced in person, would remain exempt from the requirement to maintain an office.

Model 2: A single resident office to serve the entire nation

Under Model 2, an LIT would be required, at minimum, to have one office within Canada to serve all of Canada. This model would allow an LIT to provide virtual service to debtors anywhere in Canada. The LIT would be required to always offer and be prepared to provide a debtor the choice of in-person service at no additional cost to the estate, including costs related to travel for meetings and court appearances, regardless of whether a debtor chose virtual service in the past. Any offices opened by LITs would continue to have to be registered with, and approved by, the OSB.

Model 2 does not envisage a national trustee licence. All existing rules and procedures around licence extensions would remain in effect. For greater clarity, should an LIT licensed in one province seek to accept a filing in another province they would need to seek an extension of their licence to that province from the Superintendent after fully satisfying the requirements of the OSB in order to do so.

Questions

The following questions are intended to help guide your feedback:

  1. Of the two models offered as options in this paper, do you prefer one over the other? If so, please provide your rationale (including benefits and challenges to all stakeholders).
  2. Would you propose another model that you feel would better serve Canadians and protect the integrity of the insolvency system? If so, please provide details (including benefits and challenges to all stakeholders).
  3. For any challenges identified, can you suggest any mitigating strategies that could be employed?

Submissions Updated

Please provide your submission, identifying the preferred model and any additional feedback you wish to provide, by . Submissions are to be sent to OSB Policy and Regulatory Affairs at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

Proposed Amendments to Directive No. 6R3, Assessment Of An Individual Debtor, and Directive No. 1R6, Counselling in Insolvency Matters

The Office of the Superintendent of Bankruptcy (OSB) is seeking feedback on proposed amendments to Directive No. 6R3, Assessment Of An Individual Debtor, which would allow Licensed Insolvency Trustees (LITs) to conduct assessments by videoconference, without prior OSB approval, unless in-person service delivery is preferred by a fully informed debtor or as may otherwise be required. Feedback is also being sought on proposed amendments to Directive No. 1R6, Counselling in Insolvency Matters, to allow for the provision of insolvency counselling with the debtor’s fully informed choice.

The proposed amendments follow, expand upon, and add permanency to prior temporary measures put in place by the OSB, which allowed LITs to conduct remote service delivery of assessments to facilitate physical distancing during the COVID-19 pandemic. They also support insolvency system modernization further to the OSB’s Comprehensive Review of Directives and Regulations.

Please note that Directive No. 28R, Non-Resident Office, Directive No. 13R7, Trustee Licensing, and all rules surrounding LIT licence extensions to additional provinces and territories currently remain in effect and will be reviewed at a later date.

Input gathered from this consultation will help inform the finalization and publication of Directive No. 6R4 and Directive No. 1R7.

Please provide your feedback by November 12, 2021. Submissions are to be sent to OSB, Policy and Regulatory Affairs at
osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

Notice to Stakeholders regarding a comprehensive review of directives and regulations under the BIA and the CCAA

The Office of the Superintendent of Bankruptcy (OSB) is undertaking a comprehensive review of directives and regulations under the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to identify areas of Canada’s insolvency system that can be made more agile, transparent and responsive without jeopardizing the integrity of the system. The OSB will consider potential amendments to the regulatory framework, specifically the Superintendent’s directives, forms and regulations, to position the insolvency system for success now and in the future.

The OSB is inviting stakeholders to contribute comments and suggestions on how to modernize and improve the regulatory framework, enhance the effectiveness of its administration, and increase accessibility to insolvency proceedings.

Submissions

The OSB welcomes all suggestions on how to modernize the insolvency system through changes to directives, forms and regulations. Please be aware that legislative changes fall outside of the scope of this consultation. The OSB recognizes, however, that submissions relating to directives and regulations may suggest the need for legislative change. Such submissions will be shared for consideration with Innovation, Science and Economic Development Canada officials responsible for legislative policy with respect to the insolvency framework.

Please provide your feedback by . Submissions are to be sent to OSB, Policy and Regulatory Affairs at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

In the event of publication, to meet the usability requirements for Government of Canada websites, please provide your response in any of the following formats: .doc, .docx, .pdf, .txt, .rtf or HTML.

Please clearly indicate the name of the individual or the organization that should be identified as having made the submission and advise if you would prefer to remain anonymous. Should you choose to remain anonymous, no information you provide will be attributed to you personally, or to your organization. For more information on how we collect, use and protect data, please read our Privacy Notice.

For the full details of the consultation, please visit the OSB’s website.

Draft Directive No. 5R7, Estate Funds and Banking

Closing Date:

Ottawa, —The Office of the Superintendent of Bankruptcy (OSB) is seeking comments from stakeholders on proposed changes to Directive No. 5R6, Estate Funds and Banking.

Proposed changes to Directive No. 5R6, Estate Funds and Banking

The OSB is proposing changes to the provisions around electronic fund transfers (EFT). Provisions related to EFT require remittance information to go through the Canadian Payments System. This process has proven to be impractical for many Licensed Insolvency Trustees (LIT).

To address this issue, the OSB proposes to:

  1. Expand the definition of “electronic payment” to
  • allow LITs to make or receive payments electronically in general, excluding payments to the OSB for filing fees and levy; and
  • remove the requirement to make an application to the Superintendent, in writing, for approval to make electronic payments in lieu of using signed printed cheques; and
  • Amend the requirements surrounding the transmittal of remittance and payment information, which will allow LITs to remit this information directly to the creditor/recipient.
  • Comments on the draft amendments are invited until February 19, 2021. Please send your comments to Sheila Westerink Robin, National Manager, Policy and Regulatory Affairs, at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

    Related information

    Draft Directive No. 22R2, Proofs of Claim, Proxies, Quorums and Voting at Meetings of Creditors

    Closing Date:

    Ottawa, —The Office of the Superintendent of Bankruptcy (OSB) is seeking comments from stakeholders on draft Directive No. 22R2, Proofs of Claim, Proxies, Quorums and Voting at Meetings of Creditors.

    Proposed changes to Directive No. 22R, Proofs of Claim, Proxies, Quorums and Voting at Meetings of Creditors

    Creditors’ participation in the insolvency process is important for the effective functioning and integrity of the insolvency system. Available technology should be leveraged to support modern, efficient, and streamlined approaches to doing business.

    In particular, attendance at meetings of creditors should be encouraged as it provides the opportunity for creditors to “consider the affairs of the bankrupt, to affirm the appointment of the trustee or substitute another in place thereof, to appoint inspectors and to give such directions to the trustee as the creditors may see fit with reference to the administration of the estate” (BIA s. 102(5)). Additionally, attendance gives creditors the opportunity to evaluate information provided by the trustee and ask questions.

    For this reason, the OSB is proposing an update to Directive No. 22R, Proofs of Claim, Proxies, Quorums and Voting at Meetings of Creditors. The amendment will confirm OSB’s position that chairs of meetings of creditors should encourage participation by any means of telecommunication or video communication, to the extent practicable and subject to the chair’s ability to validate the identity of the participants. Creditors may vote at meetings by email up until the time the vote is called.

    Comments on the draft are invited until . Please send your comments to Sheila Westerink Robin, National Manager, Policy and Regulatory Affairs, at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

    Related information

    Draft Directive No. 1R5, Counselling in Insolvency Matters

    Closing Date: July 16, 2019

    Ottawa, —The Office of the Superintendent of Bankruptcy (OSB) is seeking comments from stakeholders on draft Directive No. 1R5, Counselling in Insolvency Matters, which will:

    • Introduce an enhanced insolvency counselling curriculum, and
    • Reduce administrative burden.

    Proposed enhancements to BIA insolvency counselling

    Amendments to the Bankruptcy and Insolvency Act (BIA) in 1992 introduced insolvency counselling for consumer debtors. Since then, the number of consumer insolvencies has increased significantly and the marketplace has evolved while the curriculum has remained largely unchanged.

    In February 2013, an Audit and Evaluation Branch (AEB) Report revealed opportunities to enhance the delivery of the insolvency counselling program through improved access to products and tools and recommended the OSB explore options for the mandatory counselling model to provide more tailored counselling sessions. Following the AEB Report, the OSB published its Management Response and Action Plan to address the recommendations in the AEB report.

    The current proposed amendments, designed to implement the AEB recommendations on the curriculum content, will provide the following enhancements:

    • Greater flexibility for Licensed Insolvency Trustees (LITs) to determine the timing of counselling that best meets the bankrupt’s or consumer debtor’s individual needs.
    • Clear and updated counselling topics for continued relevance to the majority of debtors and greater flexibility regarding when proposed topics are to be delivered.
    • The provision of online self-learning modules to enhance and support the objectives of the mandatory in-person sessions. A pilot test of the online material is underway.
    • Four questions for the debtor are added to the reporting form. These questions will allow the OSB to measure the effectiveness of counselling and inform whether additional improvements are needed.

    Proposed reductions to administrative burden

    Adjustments are also proposed to reduce administrative burden and remove any potential perceived barriers for LITs to rely on qualified third-party counsellors to provide for counselling.

    The OSB redesigned the Directive’s associated forms and reporting process:

    • The three forms have been condensed to one reporting form per session.
    • The requirement to request a variance is eliminated.
    • LITs will have the option to report on insolvency counselling after one or both sessions.

    A transitional provision will give LITs the flexibility to report on any counselling session delivered before the coming into force of Directive No. 1R5 using either the Schedules from Directive No. 1R4, or the reporting form in the new Directive, if available.

    Other measures to reduce administrative burden include:

    • The requirement to audio record any counselling sessions has been removed.
    • The requirement for 3.5 hours of professional development can now be completed over a period of two years rather than one.

    The Directive has been streamlined by removing paragraphs and information also found in the BIA and its Rules. This helps remove repetition, reduces the number of pages, and makes the Directive more concise.

    The OSB is responsible for protecting the integrity of the insolvency system and ensuring LITs comply with the BIA and its Rules. LITs should take no action nor engage in any relationship that could be seen as jeopardizing the integrity of the insolvency system, including, but not limited to:

    • Accepting assessments completed by Intermediaries and failing to exercise due diligence by relying on such assessments.
    • Allowing any compensation, fees and/or exchange of considerations for referrals.

    Comments on the draft are invited until . Please send your comments to Sheila Westerink Robin, National Manager, Policy and Regulatory Affairs (PRA), at osbregulatoryaffairs-affairesreglementairesbsf@ised-isde.gc.ca.

    Upon request to the same email address, the OSB will send a version of the Directive that tracks the changes made to Directive No. 1R4.

    Related information

    Proposed changes to Directive No. 1R3, Counselling in Insolvency Matters

    Closing Date: November 24, 2017

    Ottawa, —The OSB invited comments from Licensed Insolvency Trustees (LITs), the public, and any interested parties on proposed changes to Directive No. 1R3, Counselling in Insolvency Matters. Directives are issued by the Superintendent of Bankruptcy under the authority of paragraphs 5(4)(b) and (c) of the Bankruptcy and Insolvency Act (BIA). Directives apply to LITs and prescribe their obligations and responsibilities with regard to their administration of bankruptcies and proposals under the BIA.

    This information is intended solely for the purpose of seeking public comment (October 16 - November 24, 2017). Directive No. 1R3, Counselling in Insolvency Matters, remains in effect.

    Please note that the OSB may publish some or all of the comments received and may summarize in public documents the input provided. Therefore, in making a submission, it was requested that the respondent’s name be clearly indicated, as well as whether the respondent is an LIT, and if applicable, the organization represented by the respondent in making the submission. Submissions were to be provided electronically in PDF format, to facilitate posting.

    In order to ensure transparency, and support appropriate consideration of comments received, individuals or organizations who wished their comments to be considered as originating from persons who perform counselling duties on behalf of an LIT were asked to ensure to include, by copy, the relevant LIT(s) on their submission.

    In order to respect privacy and confidentiality, when providing a submission, respondents were asked to advise whether they:

    • consented to the disclosure of their submission in whole or in part;
    • requested that their identity and any personal identifiers be removed prior to publication; and,
    • wished any portion of their submission to be kept confidential.

    In addition, please note that information that was received throughout this submission process is subject to the Access to Information Act and the Privacy Act. If you have expressed an intention that your submission, or any portions thereof, be considered confidential, the OSB will make all reasonable efforts to protect this information.

    How to comment

    The OSB invited written submissions with commentary on any element of the proposed Phase I amendments, as described in the following documents:

    Specific comments (with explanation) regarding the wording of the Directive and proposed revisions to the BIA Forms, which may further enhance LIT compliance with the regulatory framework and facilitate efficient management of the process, were encouraged.

    While all submissions are being reviewed, it should be noted that comments with regard to the BIA’s legislative parameters and Bankruptcy and Insolvency General Rules which are applicable to insolvency counselling and LIT’s role, fall outside the scope of this consultation.

    Comments on this proposal were invited on or before November 24, 2017.

    Related information

    Proposed New Directive on Trustee Designation and Advertising: Directive No. 29R3

    Ottawa, —The OSB solicited comments from the public and stakeholders on proposed requirements for trustee advertising and use of a professional designation in relation to terms used by licensed trustees to identify themselves when conducting their duties and when advertising their services. These requirements aim to provide greater clarity for Canadians regarding who is licensed by the OSB to provide services under the Bankruptcy and Insolvency Act (BIA) and to help individuals to make informed choices about formal mechanisms to address debt problems.

    This information is intended solely for the purpose of seeking public comment (June 1- June 30, 2015). Directive No. 29R2, Advertising by Trustees, remains in effect.

    The Superintendent of Bankruptcy issues licences to trustees following a rigorous qualification and assessment process. Licensed trustees have the authority to administer bankruptcies and proposals under the BIA and offer services to the public. Trustees are the only professionals granted a licence under the BIA. Under the licence, they are responsible for administering all insolvency estates in Canada. The OSB supervises trustees and oversees administration of estates in bankruptcy, commercial reorganizations, proposals and receiverships under the BIA. The OSB also receives and investigates complaints related to trustees and others involved in the insolvency process. The Superintendent of Bankruptcy also has the power to conduct an investigation into the professional conduct of a trustee and issue a decision affecting a trustee's licence to ensure compliance with professional standards that apply to the trustee profession.

    The Superintendent has the legislative authority to issue directives that set out requirements relating to the powers, duties and functions of trustees when administering estates filed under the BIA. A Directive on advertising by trustees has existed since 1991 to provide guiding principles and requirements for trustees when advertising their services. Following a review of existing requirements in light of an evolving marketplace and changing needs of debtors, the OSB is proposing a new Directive on Trustee Designation and Advertising.

    Proposed requirements

    a) Licensed Trustee in Insolvency and Restructuring (LTIR)

    It is proposed that the professional designation Licensed Trustee in Insolvency and Restructuring (LTIR) would be required to be used by individuals holding a valid licence issued by the Superintendent of Bankruptcy as defined in the directive. 

    • The term "Licensed" is intended to facilitate public identification of professionals who are legally authorized to provide services under the BIA.
    • The term "Trustee" is the term used in the BIA.
    • The term "Insolvency and Restructuring" is intended to accurately reflect the range of services available under insolvency legislation, including bankruptcies as well as proposals, in addition to other services that a trustee can perform.
    • The existing term "Trustee in Bankruptcy" would be discontinued to provide clarity for the public.
    • The Canadian Association of Insolvency and Restructuring Professionals (CAIRP) has indicated support for the proposed designation.

    b) Requirement to use professional designation

    To ensure Canadians are aware of the qualifications and role of their service provider, use of the professional designation would be required in all communications or representations under the legislation to enhance transparency for clients receiving services.

    The proposal would make it obligatory for the professional designation to be included in all advertisements soliciting consumer clients to assist debtors in determining which professionals are licensed by the Superintendent.

    Inclusion of the professional designation in advertisements soliciting corporate insolvency clients, or pertaining to services unrelated to insolvency clients, would no longer be obligatory.

    Individuals using the professional designation who are not licensed trustees could be found guilty of an offence under the BIA. This provision is intended to discourage misrepresentation in the marketplace.

    c) Prescribe professional standards for advertising

    For the most part, the proposed provisions would retain the existing requirements in Directive 29R2, as well as sections 50 and 51 of the Bankruptcy and Insolvency General Rules. Consistent with requirements in other regulated professions, the obligation to adhere to professional standards in all advertising is intended to protect the integrity of the insolvency profession and guard against undesirable practices in the marketplace.

    Where to send comments

    Comments on this proposal were invited on or before .