Modernizing Insolvency Rules and Fees

Summary#

These are proposed changes, published in the Canada Gazette on November 29, 2025, that would modernize parts of the insolvency rules used for personal and company restructuring. The package would let trustees use more electronic tools, raise some dollar limits for simpler insolvency options, and increase some trustee fees; it is a proposal (not law yet) and is open for comment for 30 days.

What it does#

Key changes are grouped by theme:

• Digitalization and accessibility

  • Allows notices, many filings and record‑keeping to be sent or kept electronically instead of only by mail or paper.
  • Clarifies that signatures on some company restructuring documents can be digital.
  • Removes some old requirements such as the need for a physical court seal on certain bankruptcy applications.
  • For company (CCAA) filings, requires some forms to be filed electronically or by fax within 2 business days (Form 1) or 5 business days (Form 3).

• Consistency and clarity

  • Fixes wording differences between English and French versions and addresses where and when appeals are filed across provinces.
  • Requires public records for some company-monitoring information to be kept for at least 10 years.

• Increasing thresholds for simpler proceedings

  • Raises the asset threshold that lets a person use a streamlined bankruptcy from $15,000 to $20,000, with that amount to be adjusted annually for inflation.
  • Raises the debt limit for consumer proposals from $250,000 to $325,000, also indexed to inflation. Adjustments would start on April 1, 2027.

• Changing trustee fees and counselling charges

  • Updates the tariff (maximum fees) trustees can take in summary administrations and consumer proposals, including:
    • Two advance draws of $850 each in summary administration bankruptcies (replacing three smaller draws).
    • Administrative disbursements increased to $140 (indexed).
    • Consumer proposal payments: two payments of $850 each (was $750).
    • Counselling fees increased to $120 per individual session and $35 per person for group sessions (indexed).
  • Many of these dollar amounts would be indexed yearly to the Consumer Price Index starting April 1, 2027.

Note: Most amendments would come into force on registration, but changes to the tariff and to the simplified bankruptcy threshold would come into force one year after registration to allow software and operational changes.

Who's affected#

• Licensed Insolvency Trustees (LITs) — the professionals who run bankruptcies and proposals. They would see higher allowed fees, earlier access to some funds, and less paperwork for some tasks.
• Consumer debtors — people using the insolvency system would see simpler access to streamlined bankruptcies or proposals if they fall under the new thresholds, and more electronic options for notices and counselling.
• Creditors (banks, loan companies, small business creditors) — some creditors would receive slightly lower recoveries from estates because more can be paid to trustee fees.
• Courts and administrators — fewer paper processes and some procedural changes.
• Office of the Superintendent of Bankruptcy (OSB) and the system that collects filings — will need IT updates and will collect different levy amounts.
• Small LIT firms and rural communities — likely to notice the biggest operational effects (both positive for LITs and mixed for local creditors).
• Indigenous peoples — the government says impacts are limited, but people in remote Indigenous communities could benefit from electronic transmission options in the same way as other remote residents.

If it is unclear who will be affected in a specific case (for example, precise dollar effects for an individual creditor), the proposal’s analysis acknowledges some uncertainty.

Why it matters#

• Faster, cheaper paperwork for many insolvency tasks: allowing electronic notices, signatures and records should save time and postage, and reduce trips to courts or offices.
• More access to simpler insolvency options: higher, inflation‑indexed thresholds for streamlined bankruptcies and consumer proposals may let more low‑risk people use faster procedures.
• Money shifts between parties: the regulatory impact analysis estimates a net present‑value benefit of about $277 million over 20 years, but it also finds that trustee remuneration would rise by about $680 million while creditor recoveries would fall by about $744 million (all figures are present‑value estimates). These are transfers within the insolvency system — more to trustees, less to creditors.
• Modernization could keep more trustees in practice and make it easier for debtors to find help, which the government argues improves access across Canada, especially in smaller communities.
• It is a proposal, not final: stakeholders had a consultation earlier and can still comment during the current comment period; parts of the package require IT changes and would not take effect until later to give industry time to adjust.