Modernizing insolvency rules and trustee fees

Summary#

This notice (published in the Canada Gazette, Part I on November 29, 2025) proposes changes to the Bankruptcy and Insolvency General Rules and the Companies’ Creditors Arrangement Regulations to modernize how consumer and small insolvency matters are handled. The main practical effects are clearer permission for electronic filing and signatures, higher limits so more people can use simplified insolvency paths, and updated fees for Licensed Insolvency Trustees (LITs) — with an estimated net present value gain of about $277 million over 20 years according to the government’s analysis.

What it does#

• Digital steps and accessibility

  • Allows notices and many documents to be sent by email or other electronic transmission.
  • Lets trustees keep estate books and records in electronic form.
  • Removes some old requirements such as the court seal on certain bankruptcy applications.
  • Clarifies that signatures on some company restructuring documents can be digital.
  • Changes timing for some company monitor filings (Forms 1 and 3) so they are filed more quickly after court orders.

• Fixes wording and consistency

  • Corrects an inconsistent French wording and aligns rules across provinces about where and when appeals must be filed.
  • Requires certain public CCAA records to be kept for at least 10 years after a monitor is discharged.

• Raises eligibility thresholds (so more people can use the simpler procedures)

  • Summary administration bankruptcy asset limit: from $15,000 to $20,000, then indexed yearly to inflation.
  • Consumer proposal debt limit: from $250,000 to $325,000, then indexed yearly to inflation.
  • The first annual indexing step starts on April 1, 2027.

• Changes trustee fees and counselling fees

  • Adjusts the tariff structure for LIT fees in summary administration bankruptcies and consumer proposals (new percentages, larger early advances, and higher fixed items).
  • Example changes (high level):
    • Advance draws on summary administration estates move from three draws of $250 to two draws of $850, with a limit that at least 25% of estate receipts remain.
    • Administrative disbursement lump sum moves from $100 to $140 (indexed).
    • Consumer proposal filing and approval fee payments move from two $750 draws to two $850 draws (indexed).
    • Counselling: individual sessions from $85 to $120, group sessions from $25 to $35 (both indexed).
  • The tariff amounts are specified as maximums, not mandatory flat fees.
  • Some fee and threshold changes are to come into force one year after the regulations are registered; most other changes take effect on registration.

Who's affected#

• Licensed Insolvency Trustees (LITs) — the profession that administers bankruptcies and proposals. The rules and fees affect how they are paid and how they operate.
• People (consumer debtors) who need insolvency help — especially those in rural or remote areas who may benefit from clearer electronic service and higher limits for simplified procedures.
• Creditors (banks, credit-card companies, small businesses that are owed money) — higher trustee fees mean less money available to repay creditors from estates.
• The Office of the Superintendent of Bankruptcy (OSB) — will update record-keeping, levy collections and IT systems to reflect the changes.
• Courts and software providers — will see small procedural and technical changes (for example, removing the court seal requirement and updating data fields in trustee software).
• It’s clear who the main groups are. The item doesn’t raise new, unexpected categories of affected people.

Why it matters#

• Faster, cheaper, more modern process: allowing electronic filings, records and signatures should cut time and paper work for trustees, courts and people filing insolvency proceedings. That can make the system easier to use, especially outside big cities.
• More access to simpler options: raising the limits means more low-risk debtors can use summary bankruptcy or consumer proposals instead of more complex, costly routes.
• Money shifts between stakeholders: the government’s analysis shows the changes would increase what trustees earn (estimated increase in LIT remuneration of about $680 million present value) but reduce what creditors recover (estimated reduction of about $744 million). Overall the package is projected to produce a net present value benefit of roughly $277 million over 20 years.
• Trade-offs to watch: better trustee pay and easier access to services can improve choice and supply of help, but creditors — including some small businesses — may receive smaller payouts from insolvent estates.
• Next steps and timing: the government invited comments for 30 days from the Gazette publication; most rules would come into force on registration, while the fee and threshold changes would take effect one year after registration and the indexing starts April 1, 2027.