Senate Committee Recommends Bold Insolvency Law Reforms

This article was co-authored by Andrew J.F. Kent

Late on November 4, 2003, the Standing Senate Committee on Banking, Trade and Commerce released a report calling for substantial reform of the federal insolvency statutes. Because of concerns about timing, the Committee rushed to complete its report and was unable to address certain issues. However, it is ambitious and a very substantial body of work, some 275 pages in length with 53 specific recommendations.

With respect to commercial insolvencies, the Committee adopted key aspects of the basic approach advocated by the Joint Task Force ("JTF") of the leading professional organizations. In particular, the Committee advocated an agenda for reform that is broader than that initially identified by Industry Canada, and adopted a standards based approach for reorganization proceedings rather than the intensely rule oriented approach of U.S. insolvency laws. Twenty-two of the Committee’s recommendations apply