Mr. Speaker, thank you for the opportunity to speak to the private member's bill put forward by the hon. member for New Westminster-Burnaby.
This legislation is a clear example of a good idea whose time has come. In fact, the idea of amending the Bankruptcy and Insolvency Act so that people who have been accused of sexual and physical assault cannot use bankruptcy as a way of avoiding penalties imposed by the civil courts has also been raised by government legislation.
Bill C-109 was introduced a couple of weeks ago. Under it, fines for physical and sexual assault become non-dischargeable in the event of bankruptcy. The legislation before us takes this idea one step further and I think it is a good step. Under Bill C-323 the pre- and post-judgment interest on awards would also be non-dischargeable. I want to commend the hon. member for New Westminster-Burnaby for his foresight in closing this loophole. This is an excellent amendment to the laws regarding bankruptcy.
The hon. member's bill inadvertently opens another loophole. Section 178 of the Bankruptcy and Insolvency Act refers to a number of instances where debts are non-dischargeable. Among them are alimony payments, child support and fraud.
In cases where the courts award pre- and post-judgment interest in these other circumstances, I do not think the bankrupt should be able to escape these obligations simply by declaring bankruptcy. Nor do I think this was the intention of the hon. member when he tabled this legislation.
The bill after all seeks social justice. It is an endeavour to make sure that those who have incurred debts and interest charges by order of the court cannot escape their obligations by declaring bankruptcy.
I am certain that if the hon. member had the opportunity to redraft the legislation, he would do so in a way that would close down the loopholes for the bankrupts listed in section 178. I would suggest to him that the surest way of having his recommendation adopted would be to withdraw Bill C-323 and resubmit his proposal as an amendment to Bill C-109 now at second reading.
I am convinced that the amendment will be welcomed by the committee. We have already heard expressions of support from both sides of the House. We all know that the hon. member for New Westminster-Burnaby has hit upon an excellent idea and a worthy amendment and we all want to see it incorporated in law as soon as possible.
That is why I support the principle of Bill C-323 but I cannot support the bill as it now stands. I encourage the hon. member to withdraw Bill C-323 and present its substance as an amendment to Bill C-109 at committee. There it will be incorporated into a bill that has been designed to address the broad spectrum of both consumer and corporate issues that relate to bankruptcy.
Many of the amendments to the Bankruptcy and Insolvency Act contained in Bill C-109 are aimed at redressing an imbalance between consumer debtors and their creditors. The legislation puts more pressure on debtors to rehabilitate and to act more responsibly by repaying their debts. For example, as we have discussed in the House before, most consumer bankrupts are discharged nine months after bankruptcy. Even if they start obtaining surplus income, it is costly for creditors to get back what they are owed.
Under Bill C-109 consumer debtors will be required to remit a portion of their surplus income, the income which exceeds the minimum cost of living. The creditor will not have to go to the courts to receive his due.
The legislation also covers student loans. Some students have declared personal bankruptcy upon graduation as a means of discharging their student loans. Under the new law, students will continue to be able to declare bankruptcy but their student loans will not be discharged for another 24 months.
Under the new amendments, insolvent spouses may submit a joint proposal for bankruptcy. This will help save time, cut costs and streamline the process. Former spouses will no longer be able to use the bankruptcy laws as an easy way to get out of making support payments. Spousal and child support payments become provable priority claims.
The legislation also contains measures to ensure that low income families will not lose their GST credit refunds. Such refunds will be exempted from seizure in the event of a bankruptcy.
All these are good amendments. Among the good amendments is the proposal to ensure that people who have been accused of sexual or physical assault do not use bankruptcy as a way of avoiding penalties imposed by the civil courts.
The hon. member has added a very useful amendment to this last provision. I look forward to discussions in committee on it if he is willing to withdraw his bill.