Remission of COVID-era Insolvency Fee Increases

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.