Government measures in key jurisdictions 4th edition - Flipbook - Page 27
Canada
Insolvency
Has the government
made any changes
to insolvency
legislation?
Contractual
Issues
What measures
have been taken
to reinforce
contracts?
While Canada’s main insolvency statutes, the Bankruptcy and Insolvency Act (BIA) and
Companies’ Creditors Arrangement Act (CCAA) have not been amended at the time of writing,
new legislation and amendments to existing legislation do impact the insolvency process. In
addition, guidance from other participants in the insolvency regulatory process will affect
insolvency practice and procedures. The following are some examples:
•
As part of the federal government’s CERB program, the
income support benefit provided will not be subject to the operation of any law relating to
bankruptcy and insolvency.
•
Several provinces have enacted legislation to
temporarily suspend limitation periods, which apply to the insolvency process.
•
The Office of the Superintendent of Bankruptcy Canada, which
regulates Licensed Insolvency Trustees (LITs) and is the regulator under
the BIA and CCAA, has recommended that LITs work with debtors
and third parties to ensure that they are handling insolvencies in a flexible manner that is
the least prejudicial to individuals in financial distress. Under the BIA, the courts have broad
authority to allow bankruptcy cases to move forward in irregular circumstances
if the courts believe it is appropriate.
Each Canadian province has its own legislation outlining the requirements for doing business
electronically and using eSignatures. In Ontario, British Columbia and Alberta, barring a few
important exceptions, eSignatures may be utilized for closing transactions to create binding
obligations.
Documents requiring a traditional “wet ink” signature include:
•
wills, codicils and trusts created by wills or codicils,
•
powers of attorney regarding an individual’s financial affairs or personal care,
•
negotiable instruments (such as certificated securities and negotiable promissory notes),
•
beneficiary designations (such as for life insurance),
•
certain real estate matters, and
•
documents that are from time to time prescribed or that belong to a prescribed class.
With regard to real estate matters, parties may use eSignatures to sign documents that
create or transfer an interest in land. However, it is important to note
that certain restrictions may apply depending on the applicable province.
For a more detailed explanation, see the Cassels Comment located here.
Other contractual matters, including material adverse effect and material
adverse change provisions and Force Majeure clauses, have been impacted by the effects of Covid19.
For more information, see additional Cassels Comments located here and here.
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Government measures in key jurisdictions