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Pending Default of a Proposal under the BIA where the Canada Revenue Agency is a creditor

April 23, 2020

The Canada Revenue Agency (CRA) is taking a people-first approach in realigning its resources to ensure that all Canadians and businesses are supported if they are experiencing financial hardship due to the COVID-19 outbreak.

The CRA has heard from Licensed Insolvency Trustees (LITs) and the Office of the Superintendent of Bankruptcy (OSB) about debtors who have suffered a loss of employment or a reduction of income as a result the COVID-19 outbreak and their concerns over defaulting on their proposals.

The CRA is proposing a solution to assist taxpayers and LITs in circumstances where the CRA is a creditor and the debtor is experiencing financial hardship.

For proposals filed under Division 1 of the Bankruptcy and Insolvency Act (BIA), the CRA is offering a waiver of the default pursuant to section 62.1 of the BIA and granting a deferral of payments to the estate up to September 1, 2020.  This will also apply to any amounts subject to section 60(1.1) of the BIA as per our existing Administrative Agreement policy with LITs.

For consumer proposals under the BIA, the CRA offers the acceptance of an amended proposal that calls for a deferral of payments up to September 1, 2020.

Hopefully, this will offer taxpayers the time to focus on other aspects of their financial wellbeing without having to file for bankruptcy. 

Further notifications will be provided to stakeholders through the Canadian Association of Insolvency and Restructuring Professionals and through updates to the CRA information page on the OSB website.


Limited Proxy

Form 60 [modified] s. 102(2) BIA

In the matter of

All Division I and II proposals under the Bankruptcy and Insolvency Act

Her Majesty The Queen in Right of Canada, as represented by the Minister of National Revenue, a creditor, hereby appoints the Licenced Insolvency Practitioners in charge of the above insolvency proceedings as Her proxy, in the event a representative for Her Majesty the Queen in Right of Canada (as represented by the Minister of National Revenue) is absent from meeting(s) of creditors to be held in any of these proceedings between April 23, and September 1, 2020, only to do the following:

  1. In the case of a Division I proposal, to accept a waiver of the default pursuant to section 62.1 of the BIA and to grant a deferral of payments to the estate up to September 1, 2020. 
  2. In the case of a Division II proposal, to accept an amended proposal filed by the debtor calling for a deferral of payments to September 1, 2020, and;
  3. Where applicable, to accept a deferral of amounts subject to subsection 60(1.1) of the BIA to September 1, 2020 as per the Administrative Agreement policy with the LIT responsible for the file. 

Dated at Toronto, this 24th day of April, 2020.

Her Majesty The Queen in Right of Canada, as represented by the Minister of National Revenue

   Penny Davey
(Signature générée électroniquement)

 

____________________   ___________________

 

 

par

for the Director,
Collections and Verifications Branch
Canada Revenue Agency

I confirm that this proxy has been used at the meeting of creditors held on __ of______, 2020 in the estate of ________________.  I am enclosing herewith any amended proposal filed further to that meeting of creditors.

___________________, LIT


Limited proxy - Adjournment of Creditors Meeting

Form 60 modified - s102(2) BIA

In the matter of the proposal of:

Name of Individual or Business

Her Majesty The Queen in Right of Canada, as represented by the Minister of National Revenue, a creditor hereby appoints Insert LIT firm, the Licenced Insolvency Practitioner in the above insolvency proceeding as Her proxy, in the event Her General Proxy is absent from the meeting of creditors to be held on the DD day of MMM, 2020, only to do the following:

  1. To adjourn the general meeting of creditors scheduled for MMM DD, 2020 and to be rescheduled on MMM DD, 2020 to give the Agency enough time to properly evaluate the proposal.
  2. A confirmation in writing that the meeting has been adjourned and rescheduled as requested.

Dated at CITY, this DD day of MMM, 2020.

 

 

Her Majesty The Queen in Right of Canada, as represented by the Minister of National Revenue

 

 per:

 

------------------------------
Witness

 

-----------------------------
for the Director,
Collections and Verifications Branch
Canada Revenue Agency

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