Bankruptcy and Insolvency Act

R.S.C., 1985, c. B-3

*The below is an excerpt from the Bankruptcy and Insolvency Act. The full version can be found on the Government of Canada website.

An Act respecting bankruptcy and insolvency

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Short title

1. This Act may be cited as the Bankruptcy and Insolvency Act.

R.S., 1985, c. B-3, s. 1; 1992, c. 27, s. 2.

INTERPRETATION

Definitions

2. In this Act,

“affidavit“ << affidavit >> “affidavit” includes statutory declaration and solemn affirmation;

“aircraft objects“ << biens aeronautiques >> “aircraft objects” has the same meaning as in subsection 2(1) of the International Interests in Mobile Equipment (aircraft equipment) Act;

“application“ Version anglaise seulement“application”, with respect to a bankruptcy application filed in a court in the Province of Quebec, means a motion;

“assignment“ << cession >> “assignment” means an assignment filed with the official receiver;

“bank“ << banque >> “bank” means

(a) every bank and every authorized foreign bank within the meaning of section 2 of the Bank Act,

(b) every other member of the Canadian Payments Association established by the Canadian Payments Act, and

(c) every local cooperative credit society, as defined in subsection 2(1) of the Act referred to in paragraph (b), that is a member of a central cooperative credit society, as defined in that subsection, that is a member of that Association;

“bankrupt“ << failli >> “bankrupt” means a person who has made an assignment or against whom a bankruptcy order has been made or the legal status of that person;

“bankruptcy“ << faillite >> “bankruptcy” means the state of being bankrupt or the fact of becoming bankrupt;

“bargaining agent“ << agent negociateur >> “bargaining agent” means any trade union that has entered into a collective agreement on behalf of the employees of a person;

“child“[Repealed, 2000, c. 12, s. 8]

“claim provable in bankruptcy“, “provable claim” or “claim provable“ << reclamation prouvable en matiere de faillite >> ou << reclamation prouvable >>“claim provable in bankruptcy”, “provable claim” or “claim provable” includes any claim or liability provable in proceedings under this Act by a creditor;

“collective agreement“ << convention collective >> “collective agreement”, in relation to an insolvent person, means a collective agreement within the meaning of the jurisdiction governing collective bargaining between the insolvent person and a bargaining agent;

“common-law partner“ << conjoint de fait >> “common-law partner”, in relation to an individual, means a person who is cohabiting with the individual in a conjugal relationship, having so cohabited for a period of at least one year;

“common-law partnership“ << union de fait >> “common-law partnership” means the relationship between two persons who are common-law partners of each other;

“corporation“ << personne morale >> “corporation” means a company or legal person that is incorporated by or under an Act of Parliament or of the legislature of a province, an incorporated company, wherever incorporated, that is authorized to carry on business in Canada or has an office or property in Canada or an income trust, but does not include banks, authorized foreign banks within the meaning of section 2 of the Bank Act, insurance companies, trust companies, loan companies or railway companies;

“court“ << tribunal >> “court”, except in paragraphs 178(1)(a) and (a.1) and sections 204.1 to 204.3, means a court referred to in subsection 183(1) or (1.1) or a judge of that court, and includes a registrar when exercising the powers of the court conferred on a registrar under this Act;

“creditor“ << creancier >> “creditor” means a person having a claim provable as a claim under this Act;

“current assets“ << actif a court terme >> “current assets” means cash, cash equivalents — including negotiable instruments and demand deposits — inventory or accounts receivable, or the proceeds from any dealing with those assets;

“date of the bankruptcy“ << date de la faillite >> “date of the bankruptcy”, in respect of a person, means the date of

(a) the granting of a bankruptcy order against the person,

(b) the filing of an assignment in respect of the person, or

“date of the initial bankruptcy event“ << ouverture de la faillite >> “date of the initial bankruptcy event”, in respect of a person, means the earliest of the day on which any one of the following is made, filed or commenced, as the case may be:

(a) an assignment by or in respect of the person,

(b) a proposal by or in respect of the person,

(d) the first application for a bankruptcy order against the person, in any case

(i) referred to in paragraph 50.4(8)(a) or 57(a) or subsection 61(2), or

(ii) in which a notice of intention to make a proposal has been filed under section 50.4 or a proposal has been filed under section 62 in respect of the person and the person files an assignment before the court has approved the proposal,

(e) the application in respect of which a bankruptcy order is made, in the case of an application other than one referred to in paragraph (d), or

(f) proceedings under the Companies’ Creditors Arrangement Act;

“debtor“ << debiteur >> “debtor” includes an insolvent person and any person who, at the time an act of bankruptcy was committed by him, resided or carried on business in Canada and, where the context requires, includes a bankrupt;

“director“ << administrateur >> “director” in respect of a corporation other than an income trust, means a person occupying the position of director by whatever name called and, in the case of an income trust, a person occupying the position of trustee by whatever name called;

“eligible financial contract“ << contrat financier admissible >> “eligible financial contract” means an agreement of a prescribed kind;

“equity claim“ << reclamation relative a des capitaux propres >> “equity claim” means a claim that is in respect of an equity interest, including a claim for, among others,

(a) a dividend or similar payment,

(b) a return of capital,

(d) a monetary loss resulting from the ownership, purchase or sale of an equity interest or from the rescission, or, in Quebec, the annulment, of a purchase or sale of an equity interest, or

(e) contribution or indemnity in respect of a claim referred to in any of paragraphs (a) to (d);

“equity interest“ << interet relatif a des capitaux propres >> “equity interest” means

(a) in the case of a corporation other than an income trust, a share in the corporation — or a warrant or option or another right to acquire a share in the corporation — other than one that is derived from a convertible debt, and

(b) in the case of an income trust, a unit in the income trust — or a warrant or option or another right to acquire a unit in the income trust — other than one that is derived from a convertible debt;

“executing officer“ << huissier- executant >> “executing officer” includes a sheriff, a bailiff and any officer charged with the execution of a writ or other process under this Act or any other Act or proceeding with respect to any property of a debtor;

“financial collateral“ << garantie financiere >> “financial collateral” means any of the following that is subject to an interest, or in the Province of Quebec a right, that secures payment or performance of an obligation in respect of an eligible financial contract or that is subject to a title transfer credit support agreement:

(a) cash or cash equivalents, including negotiable instruments and demand deposits,

(b) securities, a securities account, a securities entitlement or a right to acquire securities, or

“General Rules“ << Regles generales >> “General Rules” means the General Rules referred to in section 209;

“income trust“ << fiducie de revenu >> “income trust” means a trust that has assets in Canada if

(a) its units are listed on a prescribed stock exchange on the date of the initial bankruptcy event, or

(b) the majority of its units are held by a trust whose units are listed on a prescribed stock exchange on the date of the initial bankruptcy event;

“insolvent person“ << personne insolvable >> “insolvent person” means a person who is not bankrupt and who resides, carries on business or has property in Canada, whose liabilities to creditors provable as claims under this Act amount to one thousand dollars, and

(a) who is for any reason unable to meet his obligations as they generally become due,

(b) who has ceased paying his current obligations in the ordinary course of business as they generally become due, or

(c) the aggregate of whose property is not, at a fair valuation, sufficient, or, if disposed of at a fairly conducted sale under legal process, would not be sufficient to enable payment of all his obligations, due and accruing due;

“legal counsel“ << conseiller juridique >> “legal counsel” means any person qualified, in accordance with the laws of a province, to give legal advice;

“locality of a debtor“ << localite >> “locality of a debtor” means the principal place

(a) where the debtor has carried on business during the year immediately preceding the date of the initial bankruptcy event,

(b) where the debtor has resided during the year immediately preceding the date of the initial bankruptcy event, or

(c) in cases not coming within paragraph (a) or (b), where the greater portion of the property of the debtor is situated;

“Minister“ << ministre >> “Minister” means the Minister of Industry;

“net termination value“ << valeurs nettes dues a la date de resiliation >> “net termination value” means the net amount obtained after netting or setting off or compensating the mutual obligations between the parties to an eligible financial contract in accordance with its provisions;

“official receiver“ << sequestre officiel >> “official receiver” means an officer appointed under subsection 12(2);

“person“ << personne >> “person” includes a partnership, an unincorporated association, a corporation, a cooperative society or a cooperative organization, the successors of a partnership, of an association, of a corporation, of a society or of an organization and the heirs, executors, liquidators of the succession, administrators or other legal representatives of a person;

“prescribed“ << prescrit >> “prescribed”

(a) in the case of the form of a document that is by this Act to be prescribed and the information to be given therein, means prescribed by directive issued by the Superintendent under paragraph 5(4)(e), and

(b) in any other case, means prescribed by the General Rules;

“property“ << bien >> “property” means any type of property, whether situated in Canada or elsewhere, and includes money, goods, things in action, land and every description of property, whether real or personal, legal or equitable, as well as obligations, easements and every description of estate, interest and profit, present or future, vested or contingent, in, arising out of or incident to property;

“proposal“ << proposition concordataire >> ou << proposition >> “proposal” means

(a) in any provision of Division I of Part III, a proposal made under that Division, and

(b) in any other provision, a proposal made under Division I of Part III or a consumer proposal made under Division II of Part III

and includes a proposal or consumer proposal, as the case may be, for a composition, for an extension of time or for a scheme or arrangement;

“public utility“ << entreprise de service public >> “public utility” includes a person or body who supplies fuel, water or electricity, or supplies telecommunications, garbage collection, pollution control or postal services;

“resolution” or “ordinary resolution“ << resolution >> ou << resolution ordinaire >> “resolution” or “ordinary resolution” means a resolution carried in the manner provided by section 115;

“secured creditor“ << creancier garanti >> “secured creditor” means a person holding a mortgage, hypothec, pledge, charge or lien on or against the property of the debtor or any part of that property as security for a debt due or accruing due to the person from the debtor, or a person whose claim is based on, or secured by, a negotiable instrument held as collateral security and on which the debtor is only indirectly or secondarily liable, and includes

(a) a person who has a right of retention or a prior claim constituting a real right, within the meaning of the Civil Code of Quebec or any other statute of the Province of Quebec, on or against the property of the debtor or any part of that property, or

(b) any of

(i) the vendor of any property sold to the debtor under a conditional or instalment sale,

(ii) the purchaser of any property from the debtor subject to a right of redemption, or

(iii) the trustee of a trust constituted by the debtor to secure the performance of an obligation,

if the exercise of the person’s rights is subject to the provisions of Book Six of the Civil Code of Quebec entitled Prior Claims and Hypothecs that deal with the exercise of hypothecary rights;

“settlement“[Repealed, 2005, c. 47, s. 2]

“shareholder“ << actionnaire >> “shareholder” includes a member of a corporation — and, in the case of an income trust, a holder of a unit in an income trust — to which this Act applies;

“sheriff“[Repealed, 2004, c. 25, s. 7]

“special resolution“ << resolution speciale >> “special resolution” means a resolution decided by a majority in number and three-fourths in value of the creditors with proven claims present, personally or by proxy, at a meeting of creditors and voting on the resolution;

“Superintendent“ << surintendant >> “Superintendent” means the Superintendent of Bankruptcy appointed under subsection 5(1);

“Superintendent of Financial Institutions“ << surintendant des institutions financieres >> “Superintendent of Financial Institutions” means the Superintendent of Financial Institutions appointed under subsection 5(1) of the Office of the Superintendent of Financial Institutions Act;

“time of the bankruptcy“ << moment de la faillite >> “time of the bankruptcy”, in respect of a person, means the time of

(a) the granting of a bankruptcy order against the person,

(b) the filing of an assignment by or in respect of the person, or

“title transfer credit support agreement“ << accord de transfert de titres pour obtention de credit >> “title transfer credit support agreement” means an agreement under which an insolvent person or a bankrupt has provided title to property for the purpose of securing the payment or performance of an obligation of the insolvent person or bankrupt in respect of an eligible financial contract;

“transfer at undervalue“ << operation sous-evaluee >> “transfer at undervalue” means a disposition of property or provision of services for which no consideration is received by the debtor or for which the consideration received by the debtor is conspicuously less than the fair market value of the consideration given by the debtor;

“trustee” or “licensed trustee” << syndic >> ou << syndic autorise >> “trustee” or “licensed trustee” means a person who is licensed or appointed under this Act.

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R.S.C., 1985, c. B-3

SHORT TITLE

INTERPRETATION