Report on 2019-20 Business Plan Priorities

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Report on 2019-20 Business Plan Priorities

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Message from the Superintendent
2019-20 Highlights
Business Priorities:

  1. Strengthening the OSB’s Compliance Framework
  2. Exploring Compliance Modernization
  3. Operational Training
  4. Assessment and Recommendations Regarding Low- or No-Asset/Income Estates
  5. Exploring the Debt Advisory Marketplace
  6. Operations and Policy Advisory Panel
  7. Representativeness in the Licensed Insolvency Trustee Profession
  8. Reducing Administrative Burden
  9. Proactive Communication Strategy – Canadians at Serious Financial Risk
  10. Enhanced Complaints and Enquiries Intake on the OSB’s Website

Ongoing Activities and Other Achievements
Looking Ahead

Message from the Superintendent

Elisabeth Lang

I am very proud to share the Office of the Superintendent of Bankruptcy’s (OSB) Report on 2019-20 Business Plan Priorities with all Canadians.

For the first time in April 2019, the OSB shared its business plan priorities with stakeholders via its website. Many of these priorities were multi-year initiatives, for which associated efforts to enhance and modernize the insolvency system will continue in 2020-21 and beyond. This year, great strides have been made toward the three strategic objectives I set at the time of my appointment as Superintendent of Bankruptcy, namely engagement, compliance, and organizational excellence.

The OSB has made significant progress to reduce administrative burden and to connect and consult with stakeholders, and we have begun to see the results. These reflect our efforts to increase stakeholder engagement.

The OSB also made notable progress toward strengthening compliance by starting to review its Compliance Framework and by exploring compliance modernization with a view to ensuring an effective, efficient, and modern compliance approach that supports appropriate industry innovation.

 

The end of the fiscal year was marked by the COVID-19 pandemic, which required the OSB to respond swiftly and effectively to relieve pressures on the insolvency system and its stakeholders. This report highlights some of the actions undertaken by the OSB in response to the challenges presented by the COVID-19 pandemic up to March 31, 2020. A full report of OSB’s efforts to ensure a well-functioning insolvency system during this period of economic uncertainties will be shared in the OSB’s Report on 2020-21 Business Plan Priorities.

OSB’s successes come from its continual effort to improve its data collection, evidence-based decision-making, planning and governance processes, recruitment, and onboarding approaches, always aiming for organizational excellence.

I would like to thank all OSB’s employees for their dedication, hard work, professionalism and support in accomplishing key results for the benefit of the insolvency system and Canadians.

Elisabeth Lang

Superintendent of Bankruptcy

2019-20 Highlights

The OSB contributes to an efficient marketplace by maintaining the integrity of the Canadian insolvency system, thereby strengthening confidence in the Canadian economy. Its operational activities are essential in the delivery of its mandate and are key in achieving results for the benefit of the insolvency system. Here are some highlights.

Program Policy and Regulatory Affairs

The OSB:

  • Reviewed, analyzed, and proposed a number of amendments to ensure that the regulatory instruments remain relevant and effective and that they balance the interests of stakeholders in a way that helps protect the integrity of the insolvency system.

Licensing

The OSB:

  • Granted 28 new Trustee licences as part of the 2019 Oral Board of Examination;
  • Renewed licences for 1,215 Trustee professionals (corporate and individual); and,
  • Administered 4,381 service requests from Licensed Insolvency Trustees (LITs) and Insolvency Counsellors, ensuring that they continue to meet the requirements of the regulatory framework.

Licensed Insolvency Trustee Compliance

The OSB:

  • Conducted 230 comprehensive LIT Office Visits (LITOV)¯on-site reviews of LIT business practices¯to validate compliance with the insolvency legislation;
  • Initiated 44 interventions in civil court seeking remedies to non-compliant behaviour:
    • Issued 532 negative letters of comment in instances where the LIT was deemed to not have adequately performed his/her duties and therefore caused a monetary loss to creditors or affected the rights of stakeholders;
  • Initiated 3 LIT Professional Conduct Investigations; and,
  • Put conservatory measures in place to protect 752 estates.

Debtor Compliance

The OSB:

  • Undertook 1,008 examinations of debtors for whom a bankruptcy or proposal was filed to obtain information under oath with regard to their conduct, the causes of the insolvency, the disposition of their property, and any other subject that the official receiver considers appropriate:
    • Carried out 229 court interventions seeking remedy to debtor non-compliance behaviour; and,
    • Submitted 34 new Superintendent investigation orders, either for internal investigation or to the Royal Canadian Mounted Police.

Creditor Compliance

The OSB:

  • Observed that in 2019, over one-third of the complaints received against creditors warranted a compliance review, representing 13% of all complaints received with non-compliance issues.
    • Observed that over 70% of the non-compliance issues, actioned using cease and desist letters, were related to creditors’ failure to respect the stay of proceedings protection granted to debtors under the insolvency legislation.

Consumer Protection and Insolvency Information

The OSB:

  • Accepted 142,264 insolvency filings;
  • Responded to 24,095 enquiries about the insolvency system:
    • Handled 93% of enquiries received within the 5-day service standard;
  • Published monthly, quarterly, and annual insolvency statistics reports on its website;
  • Launched a new debt solutions portal on its website to help Canadians in financial distress find the right debt solution;
  • Developed, tested, and implemented a new online form to facilitate the submission of enquiries to the OSB; and,
  • Completed 100 external requests for insolvency data.

Statutory Complaints

The OSB:

  • Developed, tested, and implemented a new online form to facilitate the submission of complaints;
  • Registered 1,141 complaints, an increase of 21% from the previous year, representing 0.8% of insolvencies filed in 2019-20:
    • Acknowledged 96% of complaints received within the 5-day service standard; and,
    • Responded to 73% of complaints received within the 30-day service standard.

Business Priorities

The OSB’s 2019-20 business priorities are aligned with its strategic objectives of engagement, compliance, and organizational excellence, and support its efforts toward modernizing Canada’s insolvency system and contributing to the efficiency of the Canadian marketplace. Undertaken as short or multi-year projects, OSB’s business priorities are planned and implemented to enhance program delivery and results. Below is a summary of the 2019-20 accomplishments.

Strategic Objectives

Description

The graphic shows three coloured symbols representing OSB’s strategic objectives. Engagement is represented by an orange symbol, compliance is represented by a blue symbol, and organizational ezcellence by a a green symbol.

Engagement

Increasing engagement with stakeholders, including meaningful consultations, will help the OSB pull the right players together in order to achieve significant results for the benefit of Canadians.

Compliance

The OSB has an important compliance mandate that it must fulfill effectively. To ensure compliance from all those it regulates, the OSB will use its full range of compliance and enforcement tools in a meaningful and effective manner.

Organizational Excellence

Organizational excellence involves establishing an evidence-based approach to decision-making, as well as recruiting, training and retaining a qualified workforce that is healthy, respectful, and high performing.

 

1. Strengthening the OSB’s Compliance Framework

Success Measures

 

Key Achievements in 2019-20
  • Make significant progress in the implementation of a revised Debtor Compliance (DC) Program, including the development of national policies and processes, commencing the development of a supporting information technology (IT) system and establishing program performance targets

 

 

 

The OSB:

  • Reviewed its DC reporting mechanisms and practices, and identified organizational efficiencies, best practices, and opportunities for improvements;
  • Conducted an Artificial Intelligence (AI) proof of concept exercise;
  • Received recommendations from software and solutions professionals on the use of AI for debtor compliance activities; and,
  • Initiated the piloting phase of an AI predictive analytics model to detect debtor non-compliance, which will continue in 2020-21. 
  • Complete an assessment of the effectiveness of the OSB’s LIT Compliance Program, implement improvements in some program areas within the fiscal year and develop an implementation plan for more complex improvements that required additional time
  

The OSB:

  • Completed a review of the effectiveness of its LIT Compliance Program, including a report with recommendations, to ensure that its LIT compliance activities, if undertaken as designed, are effectively detecting, assessing, and addressing risks to the insolvency system by LIT non-compliance;
  • Released a new report template for professional conduct investigations, which is designed to improve internal and external reporting; and,
  • Established new Standing Offer Agreements (SOAs) with pre-qualified LITs, which can be accessed on an as-needed basis, in all regions of the country, further to the issuance of conservatory measures. New SOAs will allow for the continued timely, transparent, and cost-effective administration of insolvency estates where an LIT is subject to conservatory measures.

2. Exploring Compliance Modernization

Success Measures

  

Key Achievements in 2019-20
  • Produce a report with recommendations to modernize the OSB’s LIT compliance approach and to explore other appropriate innovations in the insolvency system
  

The OSB:

  • Conducted a literature review of practices in the insolvency system, which included changes related to technology, LIT firms’ consolidation, practices from other regulators, the use of bankruptcies and consumer proposals, and more;
  • Surveyed LITs-in-Charge on the needs and opportunities to modernize its LIT Compliance Program; and
  • Produced a report with recommendations on ways to modernize its LIT compliance approach, considering appropriate industry innovations.
  • Implement improvements in some program areas within the fiscal year and develop an implementation plan for more complex improvements that require additional time
  

The OSB:

  • Initiated a pilot of a compliance approach tailored to large LIT firms.

 

3. Operational Training

Success Measures

  

Key Achievements in 2019-20
  • Complete a training needs assessment and develop a renewed OSB training model with implementation plan for OSB senior management approval
  

The OSB:

  • Completed a training needs assessment including the review of trends and best practices in training delivery; and,
  • Developed a Training Revitalization Framework and implementation plan.
  • Implement early improvements in training delivery
  

The OSB:

  •  Developed and piloted training materials for its operational employees:
    • Two new in-person training sessions; and,
    • Various online training modules and performance support tools.
  • Completed initial preparation for the deployment of an interactive learning management system to support its Operational Training Program.

4. Assessment and Recommendations Regarding Low- or No-Asset/Income Estates

Success Measures

  

Key Achievements in 2019-20
  • Complete analysis of the current situation for low- or no-asset/income estates
  

The OSB:

  • Completed a literature review and research related to low- or no-asset/income estates practices in Canada and in other countries.
  • Develop evidence-based recommendations and possible options

 

 

The OSB:

  • Developed a comprehensive report detailing the current state of low- or no-asset/income estates in Canada, a country comparison of legislation and associated programs, and statistical analysis illustrating the number of debtors who access the insolvency system with low- or no-asset/income estates; and,
  • Developed evidence-based recommendations, including consideration of a streamlined process for low- or no-asset/income estates.

5. Exploring the Debt Advisory Marketplace

Success Measures

  

Key Achievements in 2019-20
  • Conclude research on the debt advisory marketplace and seek to engage with partners to consider options to protect indebted Canadians
  

The OSB:

  • Completed an environmental scan of the debt advisory marketplace, including associated legislation;
  • Provided recommendations about compliance, program policy, communications, information management, and stakeholder engagement:
    • Initiated program improvements to address risks arising from LITs with strong debt consultant relationships;
  • Initiated engagement with various stakeholders (industry associations, provincial consumer protection agencies); and,
  • Undertook further engagement as a component of a more holistic stakeholder engagement strategy, which will continue in 2020-21 under its business priority of helping Canadians: engaging on the debt advisory marketplace.

6. Operations and Policy Advisory Panel

Success Measures

  

Key Achievements in 2019-20
  • Hold a panel meeting
  

The OSB:

  • Convened a meeting of external experts on insolvency-related subjects to provide advice on significant operational and policy initiatives:
    • Discussed topics such as compliance modernization, IT advancements, remote service delivery, financial literacy, debt advisory marketplace, as well as risks and opportunities for the insolvency system.
  • Complete a report of recommendations
  

The OSB:

  • Produced a summary report of recommendations heard from external experts; and,
  • Identified relevant and possible recommendations to inform business decisions including:
    • Next steps relating to its business priorities of strengthening the OSB Compliance Framework, compliance modernization, and assessment and recommendations regarding low- or no-asset/income estates;
    • Its plan to conduct a comprehensive regulatory review starting in 2020-21; and,
    • Its IT modernization roadmap.

7. Representativeness in the Licensed Insolvency Trustee Profession

Success Measures

 

Key Achievements in 2019-20
  • Establish a baseline of employment equity (EE) representation in the LIT profession and in the Chartered Insolvency and Restructuring Professional (CIRP) Qualification Program (CQP)
  

The OSB:

  • Established a baseline of EE representation by surveying LIT current and future professionals; and
  • Collected and analyzed results.
    • Based on the survey results, key findings include:
      • Gaps in representation among current LITs in relation to other comparable industries and labour market availability:
      • Gaps appear to be smaller/less evident among the aspiring new entrants to the profession; and,
      • Some of the larger firms have taken strong action to increase representativeness in their organizations, and some LITs have indicated interest in carrying out promotional activities.
  • Develop a strategy in collaboration with the Canadian Association of Insolvency and Restructuring Professionals (CAIRP) to increase representation in the CQP and in the LIT profession
  

The OSB:

  • Presented results and analysis of surveys to CAIRP executives; and,
  • Developed collaborative recommendations and reached a consensus with CAIRP executives on further steps to improve representation in the profession through:
    • Regular data collection and analysis; and,
    • Activities to promote the benefits and adoption of diversity including engagement with LITs, outreach and the development of practical tools.

8. Reducing Administrative Burden

Success Measures

  

Key Achievements in 2019-20
  • Consult select stakeholders
  

The OSB:

  • Met with 14 LITs who volunteered to discuss opportunities to reduce administrative burden in the insolvency system.
  • Make recommendations and commence implementation of amendments
  

The OSB:

  • Consulted its operational staff on the recommendations it received from LITs;
  • Reviewed, analyzed, and began implementing amendments to regulatory instruments:
    • Directive No. 1R5, Counselling in Insolvency Matters:
      • The Directive introduced a modern insolvency counselling curriculum and delivery model, which provides LITs with greater flexibility in assigning counselling to BIA Insolvency Counsellors registered against their licence and the ability to tailor the counselling to the individual bankrupt or consumer debtor’s needs. In addition, the recording and reporting requirements of the directive were also streamlined.
    • Directive No. 28R, Non-Resident Office:
      • Various amendments were applied to Directive No. 28R, which outlines the position of the Superintendent regarding the use and operation of a non-resident office by LITs;
  • Considered the recommendations received to inform its plan for its comprehensive regulatory review starting in 2020-21; and,
  • Responded to the challenges presented by the COVID-19 pandemic by:
    • Quickly amending requirements for in-person delivery of assessments and counselling, and providing regular guidance and practical solutions to ensure the smooth operation of the insolvency system;
    • Creating a web address for enquiries and challenges which were handled efficiently by a dedicated team of resources; and,
    • Obtaining an omnibus order on behalf of more than 451,000 open insolvency estates to provide necessary relief and flexibilities relating to consumer proposals, the scheduling of meetings of creditors and mediations.

 9. Proactive Communication Strategy – Canadians at Serious Financial Risk 

 

Success Measures

  

Key Achievements in 2019-20
  • Develop new messaging and tools to help Canadians in serious financial distress find the right debt solution
  

The OSB:
  • Increase traffic on its website and uptake of its content
  

The OSB:

  • Received over 6,500 visits on its debt solutions portal, propelling it into the top 20 most visited pages on the OSB website;
  • Published and promoted insolvency information for debtors during the COVID-19 pandemic:
    • The OSB encouraged Canadians to:
      • Learn more about the economic measures introduced by the Government of Canada to help stabilize the economy;
      • Speak to their creditors regarding flexible debt solutions such as deferring payments or extending deadlines;
      • Be savvy consumers and beware of quick credit fixes or debt services that sound too good to be true;
      • Refer to the Financial Consumer Agency of Canada’s website for helpful advice on managing finances during challenging economic times; and,
      • Speak to an LIT if they are considering insolvency options.

10. Enhanced Complaints and Enquiries Intake on the OSB’s Website 

Success Measures

  

Key Achievements in 2019-20
  • Develop, test, and implement new online forms to facilitate the submission of enquiries and complaints to the OSB
  

The OSB:
  • Seek user feedback on the ease of use of the new online forms
  

The OSB:

  • Reviewed proposed improvements and feedback received regarding the online complaints and enquiries forms, and applied changes, as required.
  • Increase the volume of complaints and enquiries being submitted through the OSB’s website
  

The OSB:

  • Received the following numbers of complaints and enquiries submitted through its website since the implementation of the new online forms on July 2, 2019:
    • 504 online complaints, accounting for 55% of the total number of complaints received in 2019-20; and,
    • 1,295 enquiries, accounting for 6.6% of the total number of enquiries submitted to its National Service Centre in 2019-20;
  • Benefited from the new online forms, used as a channel for responding to complaints and enquiries during the COVID-19 pandemic, while its employees worked remotely due to physical distancing measures. 

Ongoing Activities and Other Achievements

Providing Insolvency Information to Canadians

The OSB provides insolvency information to Canadians via a variety of channels including its website, social media platforms, and its National Service Centre (NSC).

In 2019-20, in addition to the implementation of the new online form for submitting insolvency complaints and enquiries, the OSB monitored and analyzed client uptake of digital interaction methods and identified trends to inform ongoing improvements. As part of these efforts, its NSC enhanced its use of the Intelligent Communication Exchange (ICE) phone system by establishing a phone menu that provides callers with identification options, which optimized client experience. Enhancements to the way the OSB provides insolvency information to Canadians are implemented on a regular basis to ensure consistent and efficient delivery of information across its channels.

Insolvency Counselling

The OSB developed an online debtor curriculum consisting of four self-learning modules that contain modern content relevant to the majority of debtors and made the curriculum accessible via its website. The debtor curriculum learning material supports insolvency counsellors in the delivery of more tailored and innovative educational modules. It also provides Canadians with key information to help them manage their finances better with trustworthy online content available at any time.

In 2019-20, the OSB also worked closely with CAIRP in the redesign of the Practical Course on Insolvency Counselling (PCIC), formerly the Insolvency Counselling Qualification Course (ICQC), with the objective that the PCIC reflect the OSB’s insolvency counselling curriculum so that graduates are well-positioned to deliver its content.

Online LIT Directory

In 2019-20, the OSB launched a new online LIT directory. The new map-enabled directory provides LITs with more options to advertise their services while assisting Canadians to find the right LIT for their needs. The new directory allows LITs to display new information, such as non-resident offices, links to their website and email addresses. It displays active LITs. However, users continue to have the option to view the full list of all LITs (by name only).

Internal Services

The OSB’s Internal Services provide ongoing support, leadership, and strategic direction to organizational activities. In 2019-20, the OSB:

 

  • Explored ways to enhance the use of its operational data to support compliance activities

  • The OSB collects data through the insolvency process, informing its compliance activities. In 2019-20, the OSB updated its internal reporting mechanisms, focusing on improving data accessibility for operational employees using a self-serve database. In addition, it developed a risk score selection model, which will inform its AI testing planned for 2020-21, in support of the deployment of its modernized DC Program.

 

 

  • Prioritized forward thinking in IT development

  • The OSB continually works to improve its IT systems to ensure they remain relevant and effective. In 2019-20, it developed a new, integrated multi-year IT plan, with a focus on replacing its IMPACT application, starting with the DC and Estate Administration modules.

 

 

  • Enabled organizational excellence including the recruitment of an agile workforce and the promotion of workplace well being

  • The OSB worked at improving its staffing tools to ensure it continually recruits an agile workforce. It also implemented enhancements to its talent and performance management practices. These priorities will advance further, in 2020-21, under the development of tailored strategies.

 

Looking Ahead

Building on what was accomplished in 2019-20, the OSB continues to achieve meaningful results for the insolvency system and Canadians. In addition to pursuing its compliance mandate, its business priorities for 2020-21 will focus on ensuring a modern and efficient regulatory framework and helping Canadians make informed decisions related to debt solutions. I invite you to read the OSB’s 2020-21 Business Plan for more details.

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