On September 18, 2009, long-awaited amendments to the Bankruptcy and Insolvency Act (“BIA”) and the Companies’ Creditors Arrangement Act (“CCAA”) take effect that will have a significant impact on commercial insolvencies in Canada. While many of these changes reflect existing practice and case law, some introduce more novel concepts not developed by courts, broadening what can be accomplished under the insolvency regime. This article comments on salient features of the new amendments.

Long-awaited amendments to Canada’s insolvency legislation came into force on September 18, 2009. The amendments materially reform both of Canada’s major insolvency statutes: the Bankruptcy and Insolvency Act (the “BIA”) and the Companies’ Creditors Arrangement Act (the “CCAA”). To a considerable degree the amendments codify 15 years of case law developments, but with modifications that could prove to be material in the next few years.

On July 7, 2008 specific provisions of the Insolvency Reform Act, 2005 and the Insolvency Reform Act, 2007 were proclaimed into force by Order in Council. As a result, the Wage Earner Protection Program Act (the “WEPPA”) and certain related amendments to the Bankruptcy and Insolvency Act (“BIA”) have come into immediate effect.

Certain of those amendments are intended to protect current and former employees of insolvent companies and will affect lenders to insolvent businesses.