C-487
Second Session, Fortieth Parliament,
57-58 Elizabeth II, 2009
HOUSE OF COMMONS OF CANADA
BILL C-487
An Act to amend the Bankruptcy and Insolvency Act and another Act in consequence (health-related benefit plans)
first reading, December 3, 2009
NOTE
3rd Session, 40th Parliament
This bill was introduced during the Second Session of the 40th Parliament. Pursuant to the Standing Orders of the House of Commons, it is deemed to have been considered and approved at all stages completed at the time of prorogation of the Second Session. The number of the bill remains unchanged.
Mr. Marston
402420
SUMMARY
This enactment amends the Bankruptcy and Insolvency Act and the Companies’ Creditors Arrangement Act to accord disability and other health-related benefits the status of secure debts in the event of bankruptcy proceedings.
Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca
2nd Session, 40th Parliament,
57-58 Elizabeth II, 2009
house of commons of canada
BILL C-487
An Act to amend the Bankruptcy and Insolvency Act and another Act in consequence (health-related benefit plans)
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. B-3
BANKRUPTCY AND INSOLVENCY ACT
1. Section 60 of the Bankruptcy and Insolvency Act is amended by adding the following after subsection (1.7):
Health-related benefit plan
(1.8) No proposal in respect of an employer who participated or participates in a long-term disability plan, a health care benefits plan, or other health-related benefit plans for the benefit of its employees shall be approved by the court unless
(a) the proposal provides for payment of the following amounts:
(i) in the case of a long-term disability plan, including a self-insured long-term disability plan, an amount equal to
(A) the actuarial value of the benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(B) the actuarial value of the medical, dental, vision, hearing and other health-related benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(C) the actuarial value of lost pension accruals for the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65, and
(D) such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees with long-term disabilities at the time of the bankruptcy for as long as they are totally disabled and have not reached the age of 65,
(ii) in the case of any other health-related benefit plan that is not a self-insured plan, an amount equal to the actuarial value of the amounts required to continue a health care benefits plan or other health-related benefit plan for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees at the time of the bankruptcy, and
(iii) in the case of any other health-related benefit plan that is a self-insured plan, an amount equal to the actuarial value of the amounts required to establish another plan that is to continue for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees at the time of the bankruptcy; and
(b) the court is satisfied that the employer can and will make the payments as required under paragraph (a).
2. The Act is amended by adding the following after section 81.6:
Security for unpaid amounts re health-related benefit plan — bankruptcy
81.7 (1) If the bankrupt is an employer who participated or participates in a long-term disability plan, a health care benefits plan, or other health-related benefit plan for the benefit of the bankrupt’s employees, the following amounts that are unpaid to the fund established for the purpose of the plan on the date of bankruptcy are secured by security on all the assets of the bankrupt:
(a) in the case of a long-term disability plan, including a self-insured long-term disability plan, an amount equal to
(i) the actuarial value of the benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(ii) the actuarial value of the medical, dental, vision, hearing and other health-related benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(iii) the actuarial value of lost pension accruals for the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65, and
(iv) such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees with long-term disabilities at the time of the bankruptcy for as long as they are totally disabled and have not reached the age of 65;
(b) in the case of any other health-related benefit plan that is not a self-insured plan, an amount equal to the actuarial value of the amounts required to continue a health care benefits plan or other health-related benefit plan for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees at the time of the bankruptcy; and
(c) in the case of any other health-related benefit plan that is a self-insured plan, an amount equal to the actuarial value of the amounts required to establish another plan that is to continue for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees at the time of the bankruptcy.
Rank of security
(2) A security under this section ranks above every other claim, right, charge or security against the bankrupt’s assets, regardless of when that other claim, right, charge or security arose, except
(a) rights under sections 81.1 and 81.2;
(b) amounts referred to in subsection 67(3) that have been deemed to be held in trust; and
(c) securities under sections 81.3 and 81.4.
Security for unpaid amounts re health-related benefit plan — receivership
81.8 (1) If a person who is subject to a receivership is an employer who participated or participates in a long-term disability plan, a health care benefits plan, or other health-related benefit plan for the benefit of the person’s employees, the following amounts that are unpaid to the fund established for the purpose of the plan before the first day on which there was a receiver in relation to the person are secured by security on all the person's assets:
(a) in the case of a long-term disability plan, including a self-insured long-term disability plan, an amount equal to
(i) the actuarial value of the benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(ii) the actuarial value of the medical, dental, vision, hearing and other health-related benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(iii) the actuarial value of lost pension accruals for the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65, and
(iv) such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees with long-term disabilities before the first day on which there was a receiver in relation to them for as long as they are totally disabled and have not reached the age of 65;
(b) in the case of any other health-related benefit plan that is not a self-insured plan, an amount equal to the actuarial value of the amounts required to continue a health care benefits plan or other health-related benefit plan for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees before the first day on which there was a receiver in relation to them; and
(c) in the case of any other health-related benefit plan that is a self-insured plan, an amount equal to the actuarial value of the amounts required to establish another plan that is to continue for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees before the first day on which there was a receiver in relation to them.
Rank of security
(2) A security under this section ranks above every other claim, right, charge or security against the person’s assets, regardless of when that other claim, right, charge or security arose, except rights under sections 81.1 and 81.2 and securities under sections 81.3 and 81.4.
R.S., c. C-36
COMPANIES’ CREDITORS ARRANGEMENT ACT
3. Section 6 of the Companies’ Creditors Arrangement Act is amended by adding the following after subsection (7):
Compromise or arrangement
(7.1) If the company participates or participated in a long-term disability plan, a health care benefits plan, or other health-related benefit plan for the benefit of its employees, the court may sanction a compromise or an arrangement in respect of the company only if
(a) the compromise or arrangement provides for payment of the following amounts:
(i) in the case of a long-term disability plan, including a self-insured long-term disability plan, an amount equal to
(A) the actuarial value of the benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(B) the actuarial value of the medical, dental, vision, hearing and other health-related benefits to be paid to the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65,
(C) the actuarial value of lost pension accruals for the employees with long-term disabilities for as long as they are totally disabled and have not reached the age of 65, and
(D) such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees with long-term disabilities at the time of the bankruptcy for as long as they are totally disabled and have not reached the age of 65,
(ii) in the case of any other health-related benefit plan that is not a self-insured plan, an amount equal to the actuarial value of the amounts required to continue a health care benefits plan or other health-related benefit plan for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees at the time of the bankruptcy, and
(iii) in the case of any other health-related benefit plan that is a self-insured plan, an amount equal to the actuarial value of the amounts required to establish another plan that is to continue for a period of five years and such additional amounts as are required to provide the same terms of coverage and level of benefits as were being provided to the employees at the time of the bankruptcy; and
(b) the court is satisfied that the company can and will make the payments as required under paragraph (a).
Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada