How Bill C-228 May Adversely Impact Commercial Lending

Bill C-228 was designed to protect pension plans in the wake of insolvency proceedings in Canada. However, the proposed legislation may have unintended consequences - and may even lead to some employers abandoning defined-benefit pensions in order to maintain their access to capital from commercial lenders.

Bill C-228 May Soon Become Law

Bill C-228 ("Bill C-228"), An Act to Amend the Bankruptcy and Insolvency Act ("BIA"), the Companies' Creditors Arrangement Act ("CCAA") and the Pensions Benefits Standards Act, 1985, has now made its way to the Senate committee stage and may be passed into law as early as the first quarter of this year. The bill seeks to provide additional priority benefits to pension plans involved in insolvency proceedings in Canada and has received broad political support from across the aisle.