Federal Bankruptcy and Insolvency Act (FBIA) controls bankruptcy in Canada. A legal agency headed by the Superintendent of Bankruptcy in the state oversees the implementation of the Act. Also, the agency investigates complaints while maintaining records of bankruptcy.
A lawful proceeding transpires when the liabilities or debts of a firm or person exceed their revenues or resources over a specific duration (Honsberger, Vern and Lewis 58).Besides these policies, Canada has extensively been challenged by the problem of bankruptcy in the last decades. This situation has the potential of affecting the Canada’s social-economic and political state in various ways. The paper evaluates the effects of bankruptcy in Canada by investigating the challenge from diverse perspectives.
The years 2007-2009 witnessed one of the greatest periods of recession in the world history. It began with the U S experiencing a major financial crisis which soon mutated to the other countries resulting into a major recession. It, by and large, affected the entire world economy. As a result, many banks were bailed out, large financial institutions collapsed, businesses failed and vast unemployment spread throughout. Every sector of the society namely automobiles, construction, housing, sales were affected resulting in the bankruptcy of major banks and corporations and mass unemployment. International trade was also severely affected. In 2008, the prices of basic commodities like oil rose very high causing great economic damage.