Mr. Speaker, before I talk specifically about the amendments to the Bankruptcy Act, Bill C-109, it is important to go back and have a little history on how the bill evolved.
I hope later today we will hear from our colleague, the member for Dartmouth, because in opposition he was our critic for consumer and corporate affairs and had a tremendous hand in crafting this bill on bankruptcy and insolvency. It is a complex bill because it includes a lot of provisions affecting the bankruptcy and insolvency area.
This bill contains almost 100 pages and has provisions affecting procedures in consumer bankruptcies and proposals, landlord compensation where leases are disclaimed in reorganizations, liability of directors and stays of action against directors during reorganizations. It includes the whole area of protection of trustees and receivers against personal liability for pre-appointment environmental damage and other claims, workmen's compensation board claims, the dischargeability of student loan debts.
Also included are the licensing and regulation of trustees and their liability in relation to other activities related to business, the requirement that bankrupts pay part of their income to the bankruptcy estate, securities, firm bankruptcies and international solvencies, and so on.
I have gone over those issues because it is important to understand this is a very complex area but vital in terms of making sure the environment is good for creating opportunities for business men and women to get involved in risk taking. It is also very important that we deal with the issue in terms of protecting the consumer.
The amendments we are putting forward today are a further striking of a balance between rehabilitation and obligation. In other words, the emphasis in the bill is to make sure we do everything we can to help preserve jobs and the businesses that create them. Rather than automatically having a situation in which people lose
their businesses, we create an environment in which we can actually help them through and that before they become bankrupt we take every measure possible to help them through difficult circumstances.
The amendments to the bill we are dealing with today are further refinements of the bill from 1992. This was a commitment we made. When the last bill was approved in 1992 we said that three years later we would have a review. We have listened to people from across Canada, from business groups and consumer groups. These amendments reflect the recommendations the study group proposed.
I will deal specifically with the amendments: "The maintenance of income support benefits, such as GST tax refunds, that allow families and individuals to meet their essential needs". Under the proposed legislation these benefits are exempt from seizures unintended to reimburse creditors.
"The priority status for provable claims by divorced or separated spouses for spousal or child support payments". Previously spouses were not considered creditors.
"Debtors to meet their obligations where a sexual or physical assault charge resulted in penalties". The amendments make these judgements non-dischargeable and allow support for assault victims to discontinue.
The bill also has a further refinement in the area of student loans, tighter control of premature student bankruptcies intended to discharge responsibility from student loans. In recent years the federal government has lost over $60 million per year in loan defaults as a result of early student claims of bankruptcy. The proposed changes will make student loan debts non-dischargeable for 24 months following termination of studies, recognizing that some students experience real economic difficulties. The amendments complement a variety of repayment options during that 24-month period including no repayment in situations of hardship.
Also individuals can make recompense from a portion of surplus income deemed to exceed a minimum cost of living. This provision provides for a regularized repayment schedule and encourages bankrupt individuals to make their best effort to reimburse their creditors.
Under directives from the superintendent of bankruptcy, trustees will have powers to establish rates and terms of a conditional discharge. This will save court costs and will allow for a personalized arrangement between a bankrupt individual and his or her creditors. Also spouses can make a joint consumer proposal where their financial relationship requires a co-ordinated repayment effort. These new provisions streamline the proceedings and save costs.
There is more time for creditors to review debtor proposals and a quicker response from the courts to those proposals. The old waiting period for creditors would be extended from 30 days to 45 days. The courts would have 15 days to indicate whether the proposal had been accepted as opposed to the current response period of 30 days. Otherwise the proposal would be deemed to be accepted. There is also a provision for counselling for persons related to the debtor.
That essentially represents the essence of those amendments in terms of the individual. We also have further amendments relating to businesses, farmers and fishermen. We feel confident that the House will support all of these amendments, certainly because of the participation of the advisory group.
Over the next little while the House has to deal with the whole issue of creating confidence in the marketplace. I personally do not like dealing with the whole issue of bankruptcy and insolvency. Even though the bill is there to protect and to make sure that people are treated fairly, I believe there is a very high level of anxiety in the marketplace right now. One of the things we must do as members of Parliament is make sure that we somehow work at creating an environment where the confidence level in the business community is returned to what it used to be.
It is only when people have confidence in the marketplace and confidence in themselves that they take the risk that generates production and job opportunity which eventually creates a condition in the marketplace where bankruptcies are minimized. In the last couple of years, even though bankruptcies have really remained constant, the bottom line is that we still had too many. The quarterly releases on the number of bankruptcies tend to send a shiver right through the marketplace. It is a domino effect. It has an adverse impact on the confidence of the entire marketplace.
It is hoped this bill will assist in giving individuals and business men and women every opportunity to avoid or get around having to go through that dreaded experience of bankruptcy and insolvency.
I hope we can get the support of all members for the speedy passage of this bill.