Dianne gave a well received presentation on the Abitibi case at
the Annual Review
of Insolvency Law in Montréal during the big snowstorm.
In essence, Dianne believes that the Supreme Court's decision,
that the provincial environmental orders were subject to federal
insolvency rules, was correct, but for the wrong reason, and that
attempts to apply the Court's new rule will have perverse
effects.
The Court decided that the principal factor determining which
environmental orders should survive insolvency is whether the
provincial government is likely to do the work itself, if the
insolvent organization does not do so. If the province will pay,
the insolvency rules apply, and the cost of the environmental work
does not have priority over the other creditors. If the province
will not pay, the environmental work is not subject to insolvency
rules, and therefore should take priority over the assets available
to other creditors. In Dianne's view, this produces
