1 . 6 . C A N A DA

Canada has a federal insolvency law which applies in all provinces."' However, the

provinces remain competent to apply non-conflicting provisions. Prior to the Bankruptcy

and Insolvency Act 1997 (IMA 1997), federal insolvency law remained entirely

silent on the question of cross-border insolvency." 1 Consequently, it was up to the

provinces and provincial conflicts of law to address the matter." ' Although the 1997

Act now covers conflicts ol"insolvency law, provincial law remains relevant. In addition

to the statutory framework provided by the Bankruptcy and Insolvency Act 1997, the

courts remain free to apply such legal or equitable rules governing the recognition ol

foreign insolvency orders, and assistance to foreign representatives, as are not inconsistent

with the provisions of the Act.1"'

A statutory framework for cross-border insolvency co-operation has been introduced

as Part X I I I of the Bankruptcy and Insolvency Act 19 9 7 . " In section 2 6 8 ( 3 ) IMA the

Canadian court is given broad discretionary powers

From Struggle to do-operation

The foreign representative is given the standing to commence or continue Canadian

insolvency proceedings. ' The possibility for the foreign representative to commence

Canadian proceedings is particularly important, considering the fact that a stay of

proceedings provided by the foreign insolvency proceedings does not operate in respect

of creditors who reside or carry on business in Canada concerning property located

in C a n a d a . 1 ' Consolidation of the estate will therefore generally require the stay of

proceedings to be effected under Canadian law.1 " T h e court may, however, in response

to an application by the foreign representative, appoint an interim receiver and direct

him or her to take the measures necessary for the protection of the debtor's estate, or

the interests of one or more creditors.1 Access for a foreign representative is facilitated

through the provision that an application to the court for assistance will not subject

the foreign representative to the jurisdiction ofthe Canadian court, except for the costs

of the p r o c e e d i n g s . I > Moreover, a certified or exemplified copy of the foreign insolvency

order is prima facie evidence of b o t h the insolvency of the debtor as well as

the appointment o f t h e representative.1 " The fact that the foreign proceedings are

subject to appeal or review does not prevent the representative from making applications

for relief to the court, nor the court from ordering such relief.1

Again, the Act itself remains virtually silent as to how courts are to exercise their

discretion. Aside from the provision that a foreign stay of proceedings does not operate

within Canada, no choice of insolvency law issues are addressed. Consequently, as

Fletcher observes, the 'onus is thus cast upon the judges to exercise these powers with

skill and imagination'.'"