WEPP regulations expand eligibility and payments

Summary#

These are proposed changes to the Wage Earner Protection Program Regulations that would let some workers get WEPP money sooner, cover Canadian employees when their employer enters insolvency proceedings abroad, and pay trustees more for low-asset files so more estates get administered. The government estimates additional costs of about $37,212,916 (present value) over 10 years and estimated benefits of about $40,866,638, for a net present value of $3,653,722.

What it does#

• Allows earlier WEPP payments when an employer is in a liquidating restructuring (for example under the Companies’ Creditors Arrangement Act (CCAA) or a Bankruptcy and Insolvency Act (BIA) proposal), if a court and a trustee find specific criteria are met:
  • the employer has stopped its main business operations in Canada, and
  • the employer has terminated all employees in Canada except those kept to wind down operations.
• Extends WEPP eligibility when an employer is subject to an insolvency proceeding in another country, if a Canadian court recognizes the foreign proceeding and a trustee is appointed. The same two criteria above would apply.
• Changes how trustees’ and receivers’ fees and expenses are paid in very low‑asset estates to encourage trustees to take these files. Key elements of the new formula:
  • a set‑up fee of $720, plus $120 for each of the first 10 wage claims, $90 for each of the next 10, and $75 for each additional claim;
  • up to $5,000 for certain estate administration costs when net assets (after higher‑ranking claims) are under $10,000;
  • the amounts would be indexed each year to the Consumer Price Index.
• Clarifies wording in several places and updates deadlines:
  • applications for WEPP would generally be due within 56 days after the triggering event;
  • requests for review of a decision would generally be due within 30 days.
• Repeals regulatory text about ministerial appeals because adjudicative functions were moved to the Canada Industrial Relations Board (CIRB).

Who's affected#

• Employees who lose work during a liquidating restructuring of their employer (for example under the CCAA or a BIA proposal).
• Canadian employees of companies that become insolvent in another country, if a Canadian court recognizes that foreign proceeding.
• Licensed insolvency professionals (trustees and receivers) who decide whether to accept low‑asset bankruptcies.
• Service Canada and other federal partners that operate or support WEPP (they process claims and oversee trustee payments).
• If unclear: the exact number of additional workers who will benefit is estimated but not certain; the source models an increase but actual results depend on how often trustees accept low‑asset files and how courts apply the new criteria.

Why it matters#

• Faster cash for workers: allowing earlier WEPP triggers means some people could get money weeks or months sooner after losing their job, reducing financial strain.
• Fills a gap for foreign insolvencies: workers in Canada whose employer files insolvency abroad would have a clearer path to WEPP if courts recognize the foreign proceedings.
• More low‑asset estates administered: higher and simpler trustee payments aim to reduce the number of unadministered bankruptcies, which should let more employees receive owed wages.
• Public cost and benefit: the government estimates a 10‑year present value cost of $37,212,916, estimated benefits of $40,866,638, and a net present value of $3,653,722 — these are estimates, not guaranteed outcomes.
• Status of the rules: these are proposed regulations (not final). Interested parties had 30 days from publication on November 28, 2020 to make representations, and the government expected the regulations to come into force in spring 2021 (per the source).