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Bill C-109

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    (d) carry out such other functions in relation to the company as the court may direct.

Assistance to be provided

(4) The debtor company shall

    (a) provide such assistance to the monitor as is necessary to enable the monitor to adequately carry out the monitor's functions; and

    (b) perform such duties set out in section 158 of the Bankruptcy and Insolvency Act as are appropriate and applicable in the circumstances.

Non-liability in respect of certain matters

11.8 (1) Notwithstanding anything in any federal or provincial law, where a monitor carries on in that position the business of a debtor company or continues the employment of the company's employees, the monitor is not by reason of that fact personally liable in respect of any claim against the company or related to a requirement imposed on the company to pay an amount where the claim arose before or upon the monitor's appointment.

Status of claim ranking

(2) A claim referred to in subsection (1) shall not rank as costs of administration.

Liability in respect of environmental matters

(3) Notwithstanding anything in any federal or provincial law, a monitor is not personally liable in that position for any environmental condition that arose or environmental damage that occurred

    (a) before the monitor's appointment; or

    (b) after the monitor's appointment unless it is established that the condition arose or the damage occurred as a result of the monitor's gross negligence or wilful misconduct.

Reports, etc., still required

(4) Nothing in subsection (3) exempts a monitor from any duty to report or make disclosure imposed by a law referred to in that subsection.

Non-liability re certain orders

(5) Notwithstanding anything in any federal or provincial law, where an order is made which has the effect of requiring a monitor to remedy any environmental condition or environmental damage affecting property involved in a proceeding under this Act, the monitor is not personally liable for failure to comply with the order

    (a) if, within such time as is specified in the order, within ten days after the order is made if no time is so specified, within ten days after the appointment of the monitor, if the order is in effect when the monitor is appointed or during the period of the stay referred to in paragraph (b), the monitor

      (i) complies with the order, or

      (ii) abandons, on notice to the person who issued the order, any real property affected by the condition or damage;

    (b) during the period of a stay of the order granted, on application made within the time specified in the order referred to in paragraph (a) or within ten days after the order is made or within ten days after the appointment of the trustee, if the order is in effect when the trustee is appointed, by

      (i) the court or body having jurisdiction under the law pursuant to which the order was made to enable the monitor to contest the order, or

      (ii) the court having jurisdiction under this Act for the purposes of assessing the economic viability of complying with the order; or

    (c) if the monitor had, before the order was made, abandoned or renounced any interest in any real property affected by the condition or damage.

Stay may be granted

(6) The court may grant a stay of the order referred to in subsection (5) on such notice and for such period as the court deems necessary for the purpose of enabling the monitor to assess the economic viability of complying with the order.

Costs for remedying not costs of administration

(7) Where the monitor has abandoned or renounced any interest in real property affected by the environmental condition or environmental damage, claims for costs of remedying the condition or damage shall not rank as costs of administration.

Priority of claims

(8) Any claim against a debtor company in respect of which proceedings have been commenced under this Act for costs of remedying any environmental condition or environmental damage affecting real property of the company is secured by a charge on the real property and on any other real property of the company that is contiguous thereto and that is related to the activity that caused the environmental condition or environmental damage, and the charge shall rank above any other claim, right or charge against the property, notwithstanding any other provision of this Act or anything in any other federal or provincial law.

Claim for clean-up costs

(9) A claim against a debtor company for costs of remedying any environmental condition or environmental damage affecting real property of the company shall be a claim under this Act, whether the condition arose or the damage occurred before or after the date on which proceedings under this Act were commenced.

125. The Act is amended by adding the following after section 18:

Law of set-off to apply

18.1 The law of set-off applies to all claims made against a debtor company and to all actions instituted by it for the recovery of debts due to the company in the same manner and to the same extent as if the company were plaintiff or defendant, as the case may be.

Certain Crown claims

18.2 (1) Where an order contains a provision authorized by subsection 11.4(1), unless Her Majesty consents, no compromise or arrangement shall be sanctioned by the court that does not provide for the payment in full to Her Majesty in right of Canada or a province, within six months after court sanction of the compromise or arrangement, of all amounts of a kind that could be subject to a demand under subsection 224(1.2) of the Income Tax Act or under any substantially similar provision of provincial legislation and that were outstanding at the time of the application for an order under section 11.

Default of remittance to Crown

(2) Where an order contains a provision authorized by subsection 11.4(1), no compromise or arrangement shall be sanctioned by the court if, at the time the court hears the application for sanction, Her Majesty in right of Canada or a province satisfies the court that the company is in default on any remittance of an amount referred to in subsection (1) that became due after the time of the application for an order under section 11.

Deemed trusts

18.3 (1) Subject to subsection (2), notwithstanding any provision in federal or provincial legislation that has the effect of deeming property to be held in trust for Her Majesty, property of a debtor company shall not be regarded as held in trust for Her Majesty unless it would be so regarded in the absence of that statutory provision.

Exceptions

(2) Subsection (1) does not apply in respect of subsection 227(4) of the Income Tax Act, subsection 23(3) of the Canada Pension Plan or subsection 57(2) of the Unemployment Insurance Act, or in respect of provisions of provincial legislation where

    (a) either

      (i) the provincial legislation imposes a tax similar in nature to the tax imposed by the Income Tax Act, and the provision of the provincial legislation that creates the deemed trust is substantially similar to subsection 227(4) of the Income Tax Act, or

      (ii) the province is a ``province providing a comprehensive pension plan'' as defined in subsection 3(1) of the Canada Pension Plan, the provincial legislation establishes a ``provincial pension plan'' as defined in that subsection, and the provision of the provincial legislation that creates the deemed trust is substantially similar to subsection 23(3) of the Canada Pension Plan; and

    (b) the deemed trust has, as its sole purpose, ensuring the payment to Her Majesty in right of the province of amounts required by the provincial legislation to be deducted or withheld.

Status of Crown claims

18.4 (1) In relation to a proceeding under this Act, all claims, including secured claims, of Her Majesty in right of Canada or a province or any body under an enactment respecting workers' compensation, in this section and in section 18.5 called a ``workers' compensation body'', rank as unsecured claims.

Exceptions

(2) Subsection (1) does not apply

    (a) to claims that are secured by a security or privilege of a kind that can be obtained by persons other than Her Majesty or a workers' compensation body

      (i) pursuant to any law, or

      (ii) pursuant to provisions of federal or provincial legislation, where those provisions do not have as their sole or principal purpose the establishment of a means of securing claims of Her Majesty or a workers' compensation body; and

    (b) to the extent provided in subsection 18.5(2), to claims that are secured by a security referred to in subsection 18.5(1), if the security is registered in accordance with subsection 18.5(1).

Operation of similar legislation not affected

(3) Subsection (1) does not affect the operation of any provision of provincial legislation that is substantially similar to subsection 224(1.2) of the Income Tax Act.

Statutory Crown securities

18.5 (1) In relation to a proceeding under this Act in respect of a debtor company, a security provided for in federal or provincial legislation for the sole or principal purpose of securing a claim of Her Majesty in right of Canada or a province or a workers' compensation body is valid in relation to claims against the company only if the security is registered before the date of the initial application for an order under section 11 pursuant to any system of registration of securities that is available not only to Her Majesty in right of Canada or a province or a workers' compensation body, but also to any other creditor who holds a security, and that is open to the public for information or the making of searches.

Effect of security

(2) A security referred to in subsection (1) that is registered in accordance with that subsection

    (a) is subordinate to securities in respect of which all steps necessary to make them effective against other creditors were taken before that registration; and

    (b) is valid only in respect of amounts owing to Her Majesty or a workers' compensation body at the time of that registration, plus any interest subsequently accruing on those amounts.

INTERNATIONAL INSOLVENCIES

Definitions

18.6 (1) In this section,

``foreign proceeding''
« procédures intentées à l'étranger »

``foreign proceeding'' means a judicial or administrative proceeding commenced outside Canada in respect of a debtor under a law relating to bankruptcy or insolvency and dealing with the collective interests of creditors generally;

``foreign representative ''
« représentant étranger »

``foreign representative'' means a person, other than a debtor, holding office under the law of a jurisdiction outside Canada who, irrespective of the person's designation, is assigned, under the laws of the jurisdiction outside Canada, functions in connection with a foreign proceeding that are similar to those performed by a trustee, liquidator or other administrator appointed by the court.

Powers of court

(2) The court may, in respect of a debtor company, make such orders and grant such relief as it considers appropriate to facilitate, approve or implement arrangements that will result in a co-ordination of proceedings under this Act with any foreign proceeding.

Terms and conditions of orders

(3) An order of the court under this section may be made on such terms and conditions as the court considers appropriate in the circumstances.

Court not precluded from applying certain rules

(4) Nothing in this section precludes the court on the application of a foreign representative or any other interested person from applying such legal or equitable rules governing the recognition of foreign insolvency orders and assistance to foreign representatives as are not inconsistent with the provisions of this Act.

Court not compelled to give effect to certain orders

(5) Nothing in this section requires the court to make any order that is not in compliance with the laws of Canada or to enforce any order made by a foreign court.

Court may seek assistance from foreign tribunal

(6) The court may seek the aid and assistance of a court, tribunal or other authority in a foreign proceeding by order or letter of request or otherwise as the court considers appropriate.

Foreign representative status

(7) An application to the court by a foreign representative under this section does not submit the foreign representative to the jurisdiction of the court for any other purpose except with regard to the costs of the proceedings, but the court may make any order under this section conditional on the compliance by the foreign representative with any other order of the court.

Claims in foreign currency

(8) Where a compromise or arrangement is proposed in respect of a debtor company, a claim for a debt that is payable in a currency other than Canadian currency shall be converted to Canadian currency as of the date of the first application made in respect of the company under section 10 unless otherwise provided in the proposed compromise or arrangement.

126. The Act is amended by adding the following after section 20:

Act binding on Her Majesty

21. This Act is binding on Her Majesty in right of Canada or a province.

Regulations

22. The Governor in Council may make regulations prescribing anything that is by this Act to be prescribed and the information to be given in any form to be used under this Act.

Review by Parliament

23. (1) This Act shall, on the expiration of seven years after the coming into force of this section, stand referred to such committee of the Senate, of the House of Commons or of both Houses of Parliament as may be designated or established to review the administration and operation of this Act.

Report

(2) The committee shall, within one year after beginning the review or within such further time as the Senate, the House of Commons or both Houses of Parliament, as the case may be, may authorize, submit a report on the review to that House or both Houses, including a statement of any changes to this Act that the committee would recommend.

Application

127. Section 120, 121, 122, 123, 124, 125 or 126 applies to proceedings commenced under the Companies' Creditors Arrangement Act after that section comes into force.

R.S., c. 1 (5th Supp.); 1994, cc. 7, 8, 13, 21, 28, 29, 38, 41; 1995, cc. 1, 3, 11, 18, 21

INCOME TAX ACT

1994, c. 21, s. 101(3)

128. The portion of subsection 224(1.2) of the Income Tax Act before paragraph (a) is replaced by the following:

Garnishment

(1.2) Notwithstanding any other provision of this Act, the Bankruptcy and Insolvency Act, any other enactment of Canada, any enactment of a province or any law, but subject to subsections 69(1) and 69.1(1) of the Bankruptcy and Insolvency Act and section 11.4 of the Companies' Creditors Arrangement Act, where the Minister has knowledge or suspects that a particular person is, or will become within one year, liable to make a payment