Vol. 144, No. 10 — May 12, 2010

Registration

SOR/2010-97 April 29, 2010

BANKRUPTCY AND INSOLVENCY ACT

Rules Amending the Bankruptcy and Insolvency General Rules (Miscellaneous Program)

P.C. 2010-552 April 29, 2010

Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to subsection 209(1) of the Bankruptcy and Insolvency Act (see footnote a), hereby makes the annexed Rules Amending the Bankruptcy and Insolvency General Rules (Miscellaneous Program).

RULES AMENDING THE BANKRUPTCY AND INSOLVENCY GENERAL RULES (MISCELLANEOUS PROGRAM)

AMENDMENT

1. Part I of the schedule to the Bankruptcy and Insolvency General Rules (see footnote 1) is repealed.

COMING INTO FORCE

2. These Rules come into force on the day on which they are registered.

REGULATORY IMPACT
ANALYSIS STATEMENT

(This statement is not part of the Rules.)

Issue and objectives

The purpose of this regulatory amendment is to repeal “Schedule, Part I, Tariff of Costs” from the Bankruptcy and Insolvency General Rules (C.R.C., 1978, c. 368). This change is required because subsection 197(5) of the Bankruptcy and Insolvency Act (BIA) [R.S.C., 1985, c. B-3], which enabled “Schedule, Part I, Tariff of Costs,” has been repealed. As a result, the Schedule no longer has a practical relevance.

Description and rationale

Subsection 110(1) of chapter 47 of the Statutes of Canada, 2005, which came into force on September 18, 2009, repealed subsection 197(5) of the BIA. Former subsection 197(5) of the BIA read as follows:

Legal costs shall be paid according to the tariff provided by the General Rules or according to the item in the tariff most nearly analogous or comparable to the services rendered, or, where no provision may be found therein applicable to the particular services rendered or disbursements made, according to the tariff in effect in other civil matters.

The tariff to which subsection 197(5) of the BIA refers is provided by the Bankruptcy and Insolvency General Rules in “Schedule, Part I, Tariff of Costs.” This Tariff of Costs is a detailed list of legal costs and fees payable during the administration of a bankruptcy or proposal under the BIA. This Tariff of Costs has not been amended since 1949 and is, therefore, outdated with respect to the actual amounts being paid for legal costs. The amounts listed in the Tariff of Costs are no longer used in practice. Instead, the costs are paid in accordance with civil court tariffs as they apply in the province or territory in which the litigation occurs.

Nevertheless, the Tariff of Costs still exists in the Bankruptcy and Insolvency General Rules and should be repealed in keeping with the amendment made by chapter 47 of the Statutes of Canada, 2005, to the enabling legislation.

Please note that this regulatory amendment will have no monetary impact given that it is a housekeeping amendment and will better reflect current practice.

Consultation

In the report dated November 2003 and titled, “Debtors and Creditors Sharing the Burden: A Review of the BIA and the Companies’ Creditors Arrangement Act,” the Standing Senate Committee on Banking, Trade and Commerce recommended that “Schedule, Part I, Tariff of Costs” be repealed. In keeping with this recommendation, subsection 197(5) of the BIA was repealed by chapter 47 of the Statutes of Canada, 2005. However, the repeal of the actual “Schedule, Part I, Tariff of Costs” was omitted.

No further consultations have been held for the proposed amendments to the Bankruptcy and Insolvency General Rules given that in the current practice, the outdated “Schedule, Part I, Tariff of Costs” is not taken into consideration for the determination of legal costs. The amendments will have no particular impact on the stakeholders.

Implementation, enforcement and service standards

No new mechanisms for compliance and enforcement are required because the amendments do not impose any new restrictions nor do they entail any changes to the rights and obligations set out in the BIA and the Bankruptcy and Insolvency General Rules.

Contact

Sheila Westerink Robin, MBA
National Manager
Policy and Regulatory Affairs
Office of the Superintendent of Bankruptcy
Industry Canada
Heritage Place
155 Queen Street, 4th Floor
Ottawa, Ontario
K1A 0H5
Telephone: 613-948-5006
Fax: 613-948-4080
Email: sheila.robin@ic.gc.ca

Footnote a
R.S., c. B-3

Footnote 1
C.R.C., c. 368; SOR/92-579; SOR/98-240

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