Bill C-253 aims to change the rules around bankruptcy and company arrangements with creditors. It focuses on making sure that pension plans and group insurance plans are better protected when a company goes bankrupt or has financial problems.
The bill changes the Bankruptcy and Insolvency Act to give pension plans a higher priority for getting paid when a company owes money to the plan because it hasn't fully funded it. This includes special payments that were supposed to be made to cover any shortfall. The changes also apply to companies that are going through a creditor arrangement, meaning they are trying to work out a deal to pay their debts without going bankrupt.
Additionally, the bill ensures that if a company stops participating in a group insurance plan, money will be set aside to help those who were covered by the plan. It also changes the rules around severance pay, to protect workers.
Some parts of the bill will not apply to certain employers or companies already participating in pension plans until three years after the bill comes into effect. Section 4, regarding group insurance plans, and subsection 5(1) come into force three years after the bill receives royal assent.