Part IIOrderPublished: March 2, 2022

Remission of COVID-era Insolvency Fee Increases

Remission Order for Certain Fees Under the Bankruptcy and Insolvency General Rules from March 31 to August 31, 2020: SI/2022-11

This remission order forgives $123,327 in small fee increases that were waived for insolvency filings between March 31 and August 31, 2020. It cancels the unpaid 2.2% adjustment to levies (s.123(3)), filing fees (s.132(1)) and a receivership notice fee (s.136), affecting about 44,550 cases and avoiding the administrative burden of retroactive collection.

Published
March 2, 2022
Department
Unavailable
Section
Remission Order for Certain Fees Under the Bankruptcy and Insolvency General Rules from March 31 to August 31, 2020
Comment deadline
Unavailable
Effective date
February 10, 2022
Publication part
Part II

Summary

Summary#

This is the Remission Order for Certain Fees Under the Bankruptcy and Insolvency General Rules from March 31 to August 31, 2020. It forgives $123,327 in small fee increases that the government waived during the early months of the COVID-19 pandemic (the waiver covered March 31, 2020 to August 31, 2020). The order was registered on March 2, 2022.

What it does#

  • Forgives the unpaid extra charges that would have resulted from a 2.2% fee adjustment required under the Service Fees Act for the period March 31, 2020 to August 31, 2020.
  • Covers three types of fees under the Bankruptcy and Insolvency General Rules:
    • levies under subsection 123(3) (affected 12,044 estates; foregone revenue $52,994);
    • filing fees under subsection 132(1) (affected 32,506 insolvencies/estates; foregone revenue $70,333);
    • a receivership notice fee under section 136 (affected 206 files; small amount included in totals).
  • Total number of affected cases: 44,550. Total foregone revenue: $123,327.
  • Explains why the fees were not collected: implementing the small increase on March 31, 2020 risked disrupting electronic filing software used by insolvency trustees during a period of expected high demand because of COVID-19. The Office decided to delay collection until it could be done without service interruption, then later chose to remit the outstanding amounts.

Who's affected#

  • Office of the Superintendent of Bankruptcy (the federal office that administers these fees) — it is the entity writing off the revenue.
  • Licensed insolvency trustees and the software vendors they rely on — they were spared the burden of collecting tiny retroactive charges during a crisis.
  • People and businesses who filed insolvency proceedings between March 31, 2020 and August 31, 2020, and their creditors — these cases are the ones for which the small fee increases were forgiven.
  • The general public, indirectly, because this affects how a federal office handles small pandemic-related administrative problems.

Why it matters#

  • It removes the practical and administrative hassle of trying to collect very small amounts — typically $1.54 to $3.30 per filing or $4.40 on a levy — from thousands of past insolvency files.
  • Trying to collect those amounts now would be costly, time-consuming, and in many cases impossible because many estates are already closed and funds distributed.
  • The decision reflects a trade-off: the government accepts a small revenue loss ($123,327) to avoid disrupting insolvency services during a period of economic stress caused by COVID-19.

Key topics

Financial Administration ActService Fees ActBankruptcy and Insolvency General RulesBankruptcy and Insolvency ActBIAOffice of the Superintendent of BankruptcyLicensed insolvency trusteessubsection 123(3)subsection 132(1)section 1362.2% fee adjustmentCOVID-19insolvency filingsInnovation, Science and Economic Development Canada

Source: Canada Gazette

Official source