OSB News June 2015
A word from the Superintendent
It is a pleasure to share with you the latest edition of the Office of the Superintendent of Bankruptcy’s (OSB’s) newsletter. OSB News is intended to keep you up to date on initiatives and changes taking place at the OSB that either affect you or may be of interest to the insolvency community.
In addition, we highlight changes coming to the Trustee Compliance Program, which are aimed at ensuring a consistent, national approach.
Elisabeth Lang, OSB’s Director General of Program Policy and Regulatory Affairs, and I had the pleasure of attending the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) Forums this year. It was a great opportunity to have a dialogue with trustees, and hear about issues and opportunities in business and in the insolvency system in general. In this edition we are sharing some statistics and other information presented in our update at the CAIRP Forum. We discussed three regulatory initiatives planned for the current year, including a new directive issued on Trustee Designation and Advertising, revision of the Assessment Directive, and issuing an amended Banking Directive for consultation.
Your input on this edition or on issues of importance to the insolvency community is always welcome. Let us know what you think or tell the OSB Communications team if you have a topic you would like to see covered in a future issue of OSB News.
Superintendent of Bankruptcy
New filing trends in 2014-2015
In 2014-2015 the OSB received about 123,400 new files and closed 114,500 files.
Bankruptcy Insolvency Act (BIA) volumes and inventory have evolved over the past five years. The chart below shows this evolution.
During the economic recession and its immediate aftermath, insolvency volumes reached record highs. Volumes in 2012 and 2013 reflect a return to relative stability.
Here are some highlights of a few of the insolvency trends that we saw in 2014-2015:
- new filings substantively exceeded closings for the first time in 4 years, resulting in a net increase of open inventory of about 8,900 files or 2.3% relative to the year prior
- the proportion of open inventory made up of proposals also continued to increase last year, representing 51.6% of the inventory at year end. This is not a surprise given that proposals have a longer average duration when compared to a bankruptcy
*BIA volume includes: Consumer, Sole Proprietor and Corporate files.
**Preliminary results, subject to final review.
Steady increase in consumer filings
In recent years, there has been a steady increase in the proportion of total BIA consumer filings, which are accounted for by proposals.
In 2014, the national proportion of total consumer filings which were proposals reached 45%.
This varied from a high of 53% in Ontario, 47% in the West, to a low of 38% in the East.
OSB consulting on trustee designation and advertising
The OSB is proposing changes to the directive on trustee advertising, which is now being revised. A consultation period was launched on June 1, 2015, and will run until June 30, 2015.
Directive 29R2, Advertising by Trustees currently requires that trustees identify themselves as “Trustee in Bankruptcy” when advertising their services. It is proposed that all trustees holding a licence in good standing from the Superintendent of Bankruptcy will be referred to as a “Licensed Trustee in Insolvency and Restructuring” or by the acronym “LTIR”. The new professional designation would replace the current mandatory term effective April 2016.
Under the proposal, trustees would identify themselves using this new professional designation in all communications and representations under the BIA, as well as in all advertising directed at consumer clients.
The aim to provide greater clarity for Canadians regarding who is licensed by the OSB to provide services under the BIA and to help individuals to make informed choices about formal mechanisms to address debt problems. These proposed changes reinforce the exclusive role of trustees, taking into account the criteria put forward by the OSB as the federal regulator of insolvency.
Questions or comments about the changes can be sent to OSB’s Communications team. We look forward to hearing your input on the proposed changes.
Changes coming to Trustee Compliance Program: What trustees need to know
The OSB is implementing changes this spring to the Trustee Compliance Program, which are aimed at providing a uniform, national approach to managing trustee compliance activities.
Activities will now be conducted on a cyclical basis to validate the balances and operation of trust accounts, review final statement of receipts and disbursements, aged estates and trustee disclosure and reporting. These changes will reduce the occasions we will need contact trustees for one-off issues, as we shift to a more systematic approach to validating compliance.
Trustees can expect to work with the same team of employees. A Senior Bankruptcy Analyst may also contact them to provide additional information on the Trustee Compliance approach. Additional information may be requested from trustees at times and they will receive a letter of notification when an activity has been completed and compliance is validated. The OSB will also continue to conduct trustee office visits.
For any questions or additional information, please contact your Senior Bankruptcy Analyst.
Proposed amendments to the directive concerning assessment of an individual debtor
The OSB will be proposing amendments to Directive No. 6R3, Assessment of an Individual Debtor, which are intended to help protect the integrity of the insolvency system by ensuring debtors receive transparent and high-quality assessments.
The amendments are being proposed in order to clarify trustee accountability as well as requirements for those who assist with elements of the assessment. Changes will take into account input from stakeholders, including CAIRP, and will aim to maintain the integrity and quality of the assessment process.
Following discussions with CAIRP, the OSB will publish an amended directive for public consultation. Questions on the amendments should be sent to the OSB Communications team.
Enhanced statistics now available on the OSB website
In order to provide greater access to insolvency statistics, the OSB is now posting the monthly, quarterly and annual reports categorized by forward sortation areas (FSA) and by North American Industry Classification System (NAICS) codes on its website.
What does this mean for website users?
- On the day the insolvency statistics are released, users will be able to request copies of the Insolvency Statistics in Canada by FSA and Insolvency Statistics in Canada by NAICS reports in Excel format on the OSB website. There are two easy steps: choose the desired report and enter an email address. The report will show up in the requestor’s email box shortly thereafter
- Users will also have the ability to request reports going back to 2013 whenever needed
Update on mandatory counselling renewal
The OSB is working toward a renewed model for mandatory counselling. It will include a revised curriculum featuring greater standardization of the information delivered to debtors through core topics that are considered to be of value to the majority of debtors today.
In the coming months, the OSB will be holding focus groups with trustees to discuss the issues. They include validating an updated curriculum that was developed with input from an advisory committee; seeking input on a modernized delivery approach that would include the use of web-based content; and looking at piloting a model that would achieve a more standard approach on core content, and in use of technology to support learning and results measurement.
Insolvency Law Cases heard at Supreme Court of Canada
The 407 ETR and Moloney insolvency law cases were heard at the Supreme Court of Canada in January 2015. The legal issue in both cases is the refusal to renew permits related to driving for non-payment of debts that have been released by reason of a debtor’s discharge. The OSB was one of numerous interveners in the case. For additional details on the 407 ETR and Moloney cases, visit the Supreme Court of Canada’s website.
Centralization of CCAA files within the OSB:
CCAA services head West
As of October 2014, the Companies' Creditors Arrangement Act (CCAA) function has been consolidated to a new team based in Vancouver, BC. This team will serve as the single point of contact within our organization for all records, enquiries and complaints for CCAA proceedings and provide multi-channel bilingual services to the public.
In the upcoming year the team will start to review the OSB repository of closed CCAA files and determine the most effective and accessible way of maintaining them to enhance and facilitate access for both trustees and the public. For any questions about CCAA filings please contact: email@example.com.
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