The federal government is reforming the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act on Nov. 1, 2019 to enhance retirement security and protect pension plans.
As it announced in its 2019 budget in March, the reforms are aimed at making the insolvency process fairer, more transparent and more accessible.
Read: Budget 2019: Proposed changes to pension legislation, annuities, CPP
The amendments will:
- Require participants in an insolvency proceeding to act in good faith;
- Provide for the possibility of court-ordered disclosure of a creditor’s real economic interest in an insolvent company;
- Impose director liability in appropriate cases for executive compensation payments in the lead-up to an insolvency;
- Limit the decisions that can be taken at the outset of a CCAA proceeding to measures necessary to avoid the immediate liquidation of an insolvent company, thereby improving participation of all players; and
- Exempt assets held in registered disability savings plans from creditor claims in bankruptcy.
Read: 2019 Top 100 Pension Funds Report: Deconstructing pension protection, promises and priorities
“It is unacceptable that some pensioners face hardship because of their employer’s insolvency and underfunded pension plans,” said Navdeep Bains, minister of innovation, science and economic development, in a press release. “Our government believes that after a lifetime of hard work, Canadians deserve a secure and dignified retirement. With these reforms, we are protecting Canadians’ retirement security and the ability of businesses to invest, grow and create more good jobs.”