Management Advisory Board
Chairman's Report - March 2005

Office of the Superintendent of Bankruptcy
Management Advisory Board

For the attention of:
Deputy Minister, INDUSTRY CANADA,
Assistant Deputy Minister, Operations Sector,
Superintendent of Bankruptcy.

It is in my capacity as Chairman of the Management Advisory Board of the Office of the Superintendent of Bankruptcy and pursuant to its mandate that I submit this Report covering the activities conducted by the Board during the period from April 2003 and March 2005.

The Board is pleased to have taken part in the review of those issues that were referred to it for advice as provided for in its mandate. In this regard, it should be mentioned that the Board has benefited greatly from the cooperative spirit and the keen support of the Superintendent and his staff. This made it possible to establish and maintain a close and constructive relationship between the Board and the Office of the Superintendent, without which the consultative process envisaged at the time the Board was set up would have been incapable of achieving the goal for which it was created.

It is hoped that the advice given by the Board together with the comments it made on the various topics it examined during this period have served a useful purpose.

In closing, I wish to seize this opportunity to express my sincere gratitude to my colleagues on the Board as well as to the Superintendent and the members of his personnel for their support and their efficient cooperation throughout the period.

Jean-Claude Delorme,
Chairman of the Board.

September 2005.

Table of Contents

Introduction: Highlights of the Report

1.0  Executive Summary

2.0  The Board's Activities During the Period Under Review

3.0  The MAB: Its Approach to Governance

4.0  Conclusion

Appendix A

List of OSB Offices

Introduction: Highlights of the Report

This Report covers the activities conducted by the Management Advisory Board (MAB) of the Office of the Superintendent of Bankruptcy (OSB), from April 2003 to March 2005. Of all the points addressed in the Report, the following are among the more important ones:

1. Organisational Renewal Exercise (ORE): This exercise, launched by the Superintendent with a view to enhancing the OSB's efficiency and productivity, involved both a significant adjustment of the organisational structure and a realignment of responsibilities at Head Office and in the regions. The implementation of the exercise should be monitored closely in order to ensure that the transition will continue to proceed smoothly and efficiently and to ensure that the exercise will obtain its expected results. (See para. 1.4, 1.5, 1.6 and 2.9.)
   
   
2. THE OSB's financial framework: Thanks to the 'vote-net arrangements,' the financial resources required by the OSB to perform its statutory functions have been available to date. Nevertheless, the Financial Framework Committee should continue its review of the financial arrangements so that further adjustments could be considered to negate fluctuations in revenue receipts and to continue to provide the OSB with the financial resources required to continue to discharge its statutory functions, including those that do not generate revenues but are just as essential, and to pursue its preventive research and education programs on financial management. (See para. 1.8 and 3.3.1 and chapter 5 of our previous report.)
   
   
3. Information services: Now that all data processing functions are to be centralised under a Chief Information Officer with department-wide responsibility, discussions are underway to ensure that the information services for which the OSB will nevertheless remain responsible and accountable will continue to be provided in accordance with the priorities and the quality standards expected by the users, and taking into account the commercial nature and the revenues these services generate. In this regard, it is noteworthy that, given that some MAB members have significant expertise in data processing and computerized services, a MAB committee was struck and worked in close cooperation with the OSB staff in the development of the existing services and strategies. This committee is still available to provide advice. (See para. 1.9 and 3.3.2.)

1.0  Executive Summary

1.1  This, the Second Report submitted by the Chairman on behalf of the Management Advisory Board (MAB) covers the period from April 2003 to March 2005. It is addressed to the Superintendent of Bankruptcy, the Assistant Deputy Minister/Operations and to the Deputy Minister, Industry Canada, as is called for by the Terms of Reference governing the MAB.

1.2  While the MAB has no responsibility for the actual operations of the OSB nor in respect of the Superintendent's quasi-judicial functions, its Mandate is "to provide external advice to the Superintendent and to the Department on the management of the OSB". From this perspective the MAB is expected to review the OSB's annual Business Plans, to evaluate performance against those plans, to assess the OSB's longer term business strategies and finally, to advise the OSB on ways of improving public awareness and the development of appropriate relationships with the insolvency community.

1.3  During the period under review, the OSB and the MAB achieved significant progress on a number of fundamental issues related to the OSB's Vision and Strategic Objectives. Indeed, the MAB conducted reviews of and offered advice on a number of issues of strategic importance and provided comments on the action plans developed by the OSB to achieve its longer term strategic objectives. This Report provides a succinct but integrated presentation of the results so as to show clearly that, although action was taken separately on a variety of fronts, the focus in all cases was consistently on operational efficiency, effectiveness in the delivery of the statutory mandate, transparency and accountability for results, in the overall perspective of the OSB's statutory mandate and of the Vision as defined originally at the time the OSB was set up as an Special Operating Agency (SOA).

1.4  The most significant development of the period was unquestionably the Organisational Renewal Exercise (ORE) initiated by the Superintendent towards the end of 2003. The exercise was launched for the purpose of enhancing the OSB's operational and cost-efficiency, in particular in the management and allocation of its resources, its transparency and accountability for results, and overall, its effectiveness in the delivery of its statutory mandate, including compliance by Trustees and Debtors with legal, regulatory and policy requirements.

1.5  The MAB was consulted on the individual segments of the exercise as it progressed, starting with the interpretation of the data collected through surveys amongst Trustees, Debtors and other stakeholders as well as amongst OSB staff and, subsequently, with regard to the various strategies and action plans proposed, namely those designed to enhance and monitor compliance by Trustees and Debtors with the law and regulations. The exercise implied also a re-definition and a re-distribution of managerial responsibilities through a revised organisational structure.

1.6  The ORE is a major undertaking which encompasses several programs that have as a common goal that of optimizing the overall efficiency of the OSB. The transition to the new concept is being monitored closely and managed carefully as much of its success requires on the part of all concerned an understanding of the purpose at hand and a cultural change throughout the organisation. However, the end-result will provide long lasting benefits in the direction of the Vision Statement whereby the OSB's goal is to be, and to be recognized as, a model regulator.

1.7  Another development of interest during the period was the setting-up of committees by the MAB for the purpose of enabling certain issues to be examined in greater depth by a smaller group of members before being submitted for consideration by the full board. It is felt, indeed, that these arrangements will enable the MAB to be more productive and provide more meaningful advice to the OSB. Thus, in addition to the Nominating Committee that came in existence in the previous period, three committees were set up to deal with the following matters: i) the Financial Framework, ii) Information Management & Information Technology (IMIT), and iii) Communications.

1.8  The Financial Framework Committee was set up primarily to address the issues concerning the financial arrangements governing the OSB, most of which were outlined in our previous report. As was pointed out in that Report, the OSB has had the financial resources it needed thanks to the 'vote-net arrangements' adopted a few years ago which had the effect of supplementing the resources made available through the regular budgetary process. The Committee was to review those arrangements with a view to determining how and to what extent they could be adjusted so that, in the perspective of fluctuations in revenue receipts, the OSB could nevertheless count on the resources needed to support its statutory as well as its non-revenue generating functions. It was decided to suspend the work of this Committee until the situation resulting from the ORE had stabilized. However, it will be necessary to return to those issues shortly and review the current arrangements so as to ensure that the OSB has access to the financial resources that will be necessary to administer its statutory functions in full, including those that are not revenue-producing.

1.9  The Information Management and Information Technology (IMIT) Committee has been most active in working closely with management in reviewing the OSB's extensive electronic services. These are part and parcel of its mandate, are revenue producing, and are provided on a commercial basis. The MAB was informed that all data processing functions within Industry Canada were now to be centralized under a Chief Information Officer. It is understood that discussions are being held for the purpose of defining the arrangements that will need to be made to ensure that, under that new structure, the services for which the OSB is accountable will continue to be provided to the satisfaction of the customers and users and in accordance with the priorities and service standards commensurate with the commercial nature of this operation. In addition, it will be necessary to ensure that suitable arrangements are made for the development of new services to respond to market demands as well as to generate much needed revenues.

1.10  The Communications Committee has also been active in working with OSB staff. A specific proposal has been submitted for consideration with regard to external and internal communications, in the latter case, as the ORE may require. The proposal is now being handled internally by the OSB. In this regard, consultants selected by the OSB are to produce a communications plan that will be submitted to the MAB for review in due course.

1.11  In addition, the MAB was apprised of a number of relevant issues, mainly of a policy nature, through its reviews of the Report ¹ submitted in preparation for the five-yearly statutory review by a Committee of Parliament of the Bankruptcy and Insolvency Legislation. While most of those issues were outside the MAB mandate, the Report of the Standing Senate Committee ² (to which the Parliamentary Review had been entrusted) was also a timely and useful source of information in that it provided a third-party assessment of the legislative amendments that the Superintendent had recommended as being required to cope with the issues and challenges present in the Bankruptcy and Insolvency environment. ³ These Reports and the action the Government has decided to take as a result will engage the OSB in a critical period.

1.12  In closing, in my capacity as Chairman and on behalf of my colleagues on the MAB, I wish to say that the OSB's progress during the period under review is most impressive and the Superintendent and his staff ought to be commended for undertaking the Organisational Renewal Exercise. Indeed, this will give the Vision Statement real meaning as the overall goal is to optimize operational and cost-efficiency throughout the organisation and, in so doing, to be recognized as it aspires to be according to its Vision Statement as a model regulator, capable of acting fairly and systematically against abuses of the system and ensuring that all concerned receive quality services at the lowest possible cost. Needless to add that the on-going implementation of the ORE will require constant attention, and the Superintendent and his staff can be assured of the MAB's complete support and availability for further counselling.

1.13  The MAB is appreciative of the cooperation it has received from the Superintendent and his management team and looks forward to continuing working with the OSB in the pursuit of its Mission. In this respect, the MAB shares entirely the following words of appreciation expressed by the Senate Committee ⁴ :

"The Committee believes that the OSB plays a key supervisory and administrative role with respect to the BIA, and provides high quality services to stakeholders despite budgetary pressures. Its existence, and the actions it takes in such areas as ensuring compliance with the legislation and safeguarding transparency, accountability and integrity, help to ensure that all Canadians, Canadian companies and foreign investors benefit from an insolvency system that is characterized by the highest level of integrity., We applaud the Superintendent and others in the Office of the Superintendent of Bankruptcy and encourage them to continue with their efforts to ensure that Canada continues to be regarded as having an insolvency system that ranks among the best in the world."

¹ Report on the Operation and Administration of the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangements Act, Industry Canada, September 2002.

² DEBTORS AND CREDITORS SHARING THE BURDEN: A Review of the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act, Report of the Standing Senate Committee on Banking, Trade and Commerce, November 2003.

³ On June 3, 2005, Government tabled a bill consisting of a series of amendments to the Bankruptcy and Insolvency Act and to the Companies' Creditors Arrangement Act.

⁴ Op. cit. p. 166-167.

2.0  The Board's Activities During the Period Under Review

2.1  The period under review was particularly active for both the MAB and the Superintendent and progress was achieved on several fronts. The MAB conducted reviews of and offered advice on a number of issues of strategic importance, including comments on the specific action plans developed by the OSB to achieve its strategic objectives and on the results obtained.

2.2  While a number of distinct programs were launched or continued, this reporting period was definitely marked by the Organisational Renewal Exercise (ORE), whose goals were all encompassing, given that it was designed to respond to a group of priorities which (following the Organisational Assessment commissioned earlier by the Superintendent) Management had identified as critical to the OSB's ability not only to discharge its Statutory Mandate but also and foremost to continue to do so in the perspective of the demanding Vision Statement it had defined at the time it was set up as a Special Operating Agency (SOA), namely to be recognized as a model regulator.

2.3  It should also be noted that the Vision Statement was further expanded in the Business Plan by specifying that the OSB should be 'an organization which possesses the expertise, knowledge and commitment to establish a fair regulatory framework that responds to changing market and stakeholder needs, acts against any abuse of the system, and ensures that the public and stakeholders receive quality services at a low cost'.

2.4  It is therefore against that background that Management concluded that the OSB could and should enhance its operational efficiency and, in the process, become more effective in the performance of its statutory and administrative functions by, adjusting its organisational structure and by redefining and re-distributing managerial responsibilities in such a way as to establish clearer and more focussed accountabilities for results.

2.5  The MAB was fully briefed and provided advice on the findings drawn by Management from the Organisational Assessment as well as on the strategies proposed. The MAB endorsed fully the overall goals, namely, to enhance the OSB's operational and cost-efficiency, its transparency and accountability for results, its effectiveness in the delivery of its statutory mandate, and the efficient application of a risk-based approach in the management and allocation of its resources.

2.6  The MAB indeed noted that the initiatives thus proposed by the Superintendent, centered as they were on cost and efficiency, were effectively consistent with the nature of an SOA and particularly with its characteristics as a revenue-dependent body, which is to be provided with an enhanced degree of administrative and financial autonomy.

2.7  That is the perspective from which the Superintendent and his management team conducted the Organisational Assessment and the Renewal Exercise and developed the concomitant programs, the main components of which are succinctly summarized in the following paragraphs.

2.8  Consultation of Stakeholders and Data Collection: As reported previously, surveys were conducted (or were then about to be conducted) amongst Trustees, Debtors, Creditors and Staff. Much of the data obtained through that consultation was taken into account by Management in reaching its conclusions with regard to the Organisational Renewal Exercise (ORE) and the concomitant programmes. It was reviewed by the MAB through periodic reports as follows:

1. 2..8.1  Trustees and Debtors' Surveys: Results from these surveys were reported to and reviewed with the MAB. They were subsequently integrated into the business planning, service standards and performance measurement systems, with corresponding service improvement plans.

2. 2.8.2  The Creditors' Survey: The results of the Creditors' Survey revealed that they poorly understood the OSB's role. Given these results, it will be necessary to obtain additional data to refine the findings in order to be in a position to propose a course of action.

3. 2.8.3  The Staff Survey: This survey was part of a Public Service-wide Survey, the results of which were on the whole positive with regard to the OSB staff. It served to identify areas where improvements were required and formed the basis of the Human Resources Strategy, as further reported below.

2.9  Organisational Health: As foreshadowed in our previous Report, the OSB Vision required that an in-depth review of its human resources strategy be carried out. It is while work towards that objective was proceeding that the Superintendent launched, in parallel, the assessment of the organisational structure and of the work processes. Progress regarding these two inter-related initiatives was reported to and reviewed with the MAB as follows:

1. 2.9.1  Human Resources Strategy: The MAB's advice and suggestions were solicited on a draft of the proposed strategy that was designed in the perspective of the challenges likely to confront the OSB in the foreseeable future and with the objective of ensuring that human resources will be available to support the direction and priorities of the OSB over the coming three years.

2. 2.9.2  Organisational Renewal Exercise (ORE): The MAB was presented with a progress report as to how the organisational structure had been adjusted to respond to the challenges expected to confront the OSB. However, the plan presented by the Superintendent under the heading Organisational Renewal went beyond a mere adjustment of the organisational structure. This plan quite justifiably included a realignment of Headquarter's responsibilities and Regional Operations, along with a corresponding new definition of accountabilities and a reallocation of resources. It also included a plan to ensure a smooth and harmonious transition, recognizing the challenges likely to be encountered, both internally and externally.

3. 2.9.3  The New Organisational Structure: Essentially, the new structure is the result of the consolidation of 11 division offices into 3 Regions ( East, West and Ontario), as well as the realignment of the National Headquarter accountabilities into the following three groups of corporate responsibilities: i) Regulatory Affairs and Compliance; ii) Client Services and Information Products and Outreach; and iii) Corporate Services and Internal Evaluation. In addition, a number of functions were identified to be gradually phased-out as a result of their integration into other functions.

4. 2.9.4  Additional Managerial Resources: The development of the ORE involved a large segment of the OSB staff and required significant attention on the part of the Superintendent and of his Management Team. It is in that context that the Superintendent recruited an Executive Director with specific responsibility for the supervision and management of the implementation of the ORE so as to ensure that it could receive close and constant attention, especially during the critical transition phase.

5. 2.9.5  The Next Steps: In view of its significance, progress on the ORE will be reported periodically to the MAB so as to provide Management with the benefit of the personal experiences of its members during the transition phase when staff motivation and morale are critical to the ultimate success of such a wide-ranging development. Reviews will also extend to the further development of some of the essential features of the ORE, particularly the planned refinement of the risk-based approach to the Trustee Compliance Strategy about which it is intended to further develop the Trustee Scorecard as a Risk Assessment Tool.

2.10  Compliance: Given that the OSB's Mission and strategic objective is to maintain lender and investor confidence in the Canadian Bankruptcy and Insolvency System, it was essential that Trustee and Debtor compliance with the law and the directives issued by the Superintendent be identified as two areas requiring specific strategies. Naturally, the MAB reiterated its support for the high level of priority the Superintendent wished to assign to the development of those strategies. The following should be of interest:

1. 2.10.1  Trustee Compliance Strategy: The Superintendent proposed and reviewed with the MAB the strategy entitled Initiative for the Orderly and Timely Administration of estates (IOTA). This strategy is focussed on two particularly significant risk factors: excessive aging of files and the management of trust funds. The IOTA strategy is supported by well structured plans and has been pursued vigorously. Results so far have been most satisfactory. Additional phases are being considered.

2. 2.10.2  Debtor Compliance Strategy: This strategy is being designed to detect and address abuse by Debtors. In 2003, a three-year pilot project was launched. The results of this pilot project will form the basis of a more permanent strategy. It is expected that by taking a risk-based approach to the management of the resources to be allocated, the OSB could expand its work with regard to Debtor compliance and, as a result, address national and regional systemic issues that are of concern to OSB stakeholders.

3. 2.10.3  Debtor Education: Although a strategy to prevent abuse is essential, it was felt that it would be equally justifiable to develop a strategy to prevent insolvency. This is to be achieved through education. A variety of programs and a number of information and learning products for young people were reviewed with the MAB. Further action and additional material are expected as further data becomes available regarding the development and dissemination of information.

2.11  Performance Management and Measurement: In order to support the implementation of its strategies, the OSB adjusted its Performance Management Framework with a view to ensuring that its strategic objectives were being met in the most effective and efficient manner. As is mentioned with regard to several of the programs reported above, risk assessment was made an integral part of the OSB's management process for the purpose of rationalizing and prioritising the allocation of its resources. The MAB's views were sought on a proposal concerning the identification of the risks to which the OSB's main strategies could be exposed and the determination of the action required to mitigate their potential impact on the expected outcome of a given strategy. The same concept is to be extended to all its management and business processes so as to ensure they are designed and applied in a way consistent with the Vision Statement and the Strategic Objectives. It is with that perspective in mind that the concept was extended initially to the issuance of Regulations, to the OSB's input into policies, and to the provision of services in general (electronic and others) and service quality standards. The introduction of the Risk Management concept and that of Standards of Performance (Performance Indicators) were reviewed and supported by the MAB as essential features of the managerial processes required to satisfy fully the expected outcome of the Organisational Renewal.

2.12  Other topics reviewed by the MAB: In addition to the programs referred to above, the MAB reviewed and commented or was briefed on the topics mentioned in the sub-paragraphs below. With the exception of the topic reported at para. 2.12.1, the topics do not fall within those the MAB is mandated to review and advise on by its Terms of Reference. However, the information the Members derived from the briefings they received on those topics was particularly valuable as it provided them with an overview of the main strategic issues related to the development or the administration of the bankruptcy and insolvency process in Canada:

1. 2.12.1  Business Plans and Year-end Results: As required by its Terms of Reference, the MAB reviewed the OSB Annual Business Plans and evaluated financial and business performance against those Plans through regular reports of year-end results. Those reviews were excellent opportunities in that they provided useful information to the MAB with regard to the environment in which the OSB operates, especially in relation to the growth in the number of files the OSB has to process each year. The data for the period under review show a continued upward trend in the number of personal bankruptcies and, correspondingly, a steady increase in the workload, thus reinforcing the justification of the efforts spent by the Superintendent and his Management team to optimise operational efficiency and service quality.

2. 2.12.2  Parliamentary Review of Bankruptcy & Insolvency Legislation: Our previous Report had noted that the OSB had been busy working on the Report on the Operation and Administration of the Bankruptcy and Insolvency Act and the Companies Creditors Arrangement Act ⁵ tabled before Parliament in December 2002 for the purposes of the 5-year statutory review of the legislation. The Report having been referred to the Standing Senate Committee on Banking, Trade and Commerce, the Superintendent and his staff did appear before that Committee to review and explain their recommendations for amendments to the legislation. As was mentioned in our previous report, the MAB did not actually take part in the preparation of the Department's Report; however, it was briefed by the Superintendent on the issues that were addressed and on the recommendations made with regard to the amendments to the existing legislation considered desirable. Similarly, a comprehensive briefing was given at the time the Senate Report was received, which, again, was an opportunity for the MAB members to be informed about topical issues concerning the Bankruptcy and Insolvency Legislation in Canada. In this regard it should be pointed out that the MAB Chairman received and accepted an invitation to appear before the Senate Committee. While the invitation was not meant to obtain the MAB's views on the Superintendent's recommended amendments to the legislation, the opportunity was nevertheless taken to provide the Senate Committee with a broad description of the role of the MAB and to mention briefly the points raised in our previous report concerning the financial arrangements governing the operations of the OSB. The Senate Committee Report ⁶ was tabled in November 2003, and its recommendations were reviewed by the MAB with the OSB staff in January 2004.

3. 2.12.3  Judicial confirmation of the Superintendent's jurisdiction over Trustees: Considering the importance of the Trustee Compliance Strategy, the MAB was briefed on the decision rendered by the Quebec Court of Appeal ⁷ whereby the legislative provisions concerning the Superintendent's authority to investigate and sanction trustees for professional misconduct were constitutional and valid, thereby confirming the Superintendent's jurisdiction in an area of strategic importance that goes to the heart of the OSB's mission, which includes the preservation of the integrity of the bankruptcy and insolvency system in Canada.

⁵ See Note 1 supra.

⁶ See Note 2 supra.

⁷ Métivier vs Mayrand, Q.A.C. 30 Oct. 2003.

3.0  The MAB: Its Approach to Governance

3.1 At a time when governance principles are increasingly demanding of bodies entrusted with responsibilities towards third-parties, one is naturally inclined to question how and by what standards the effectiveness and accountability of a board whose function is strictly advisory should be measured. Indeed, the results achieved hardly lend themselves to quantitative appreciation. Nevertheless, the members of the MAB are keen to provide, and to be held accountable for providing, sound and timely advice to the Superintendent and to the Department as is called for by their mandate, and accordingly to consider soundness and timeliness as the main criteria by which to measure the value of their advice.

3.2  Although soundness and timeliness are unquestionably relevant criteria by which to judge the relevancy or the effectiveness of the MAB advice, these are rather subjective and open to interpretation. In addition, the problem is further compounded by the fact that some of the topics on which the MAB is expected to provide advice lend themselves to more measurable appreciation than others. This comes out quite clearly from the wording of the Mandate as it specifies a number of topics somewhat dissimilar in nature and which may lend themselves to more or less objective or quantitative criteria of appreciation. The Mandate reads as follows:

"

The mandate of the Board is to provide external advice to the Superintendent and to the Department on the management of the Office of the Superintendent of Bankruptcy.

In particular, the Board will:

• review and comment on the annual OSB Business Plan;
• evaluate the financial and business performance of the OSB against their Business Plan;
• review the costs and revenues and comment on the Office's recommendations to maintain financial self-sufficiency;
• assess the OSB's longer term business strategies for dealing with major issues; and
• advise the OSB on ways of improving public awareness and the development of appropriate relations with the insolvency community.
"

3.3  To the extent that 'soundness' and 'timeliness' are considered relevant criteria to judge its advice in qualitative terms, the MAB must ensure that, as a group, it is in a position to examine the issues submitted to it in sufficient depth and devote the appropriate amount of time considering them at the time they are submitted. Therefore, in that context, the MAB felt that, in view of the increasing number and complexity of the issues coming before it, its effectiveness would be significantly enhanced if some were first referred to committees for more detailed examination prior to their being placed before plenary meetings of the MAB for consideration. It is in that perspective that it was agreed to set up three such committees to deal with issues related to three areas of strategic importance to the OSB as the name under which each is designated indicates: first, the committee on Financial Framework, second, the committee on Communications and lastly, the committee on Information Management and Information Technology. Having met a few times so far, these committees have been in a position to examine the issues referred to them in greater depth and as a result, have added value to the consultative role that the MAB itself is expected to play with the Superintendent and the OSB. The essence of the issues that have come before these committees is as follows:

1. 3.3.1  Financial Framework: The issues related to the present financial arrangements under which the OSB currently operates were described in our previous report. It is noted once again that thanks to the vote net arrangements, the OSB's budget has increased to a level close to the revenue it has generated.The committee on Financial Framework was to examine these arrangements with a view to determining how and to what extent they could be adjusted so that in spite of increasing resources having to be devoted to the processing of the growing volume of insolvencies, the OSB would nevertheless have the resources needed to ensure that the various compliance programs were properly run, to say nothing of the resources that would be required to finance research and education programs, as the Senate Committee has pointed out in its Report ⁸ , as well as other statutory but non-revenue generating functions. The constraints under the present financial arrangements cannot be denied and it will be necessary to return to this matter in the not too distant future in a constructive and pragmatic manner. Indeed, while the resources currently available have enabled the OSB to cover its budgeted programs, the MAB cannot but note that the OSB appears to be going through a period where revenues are levelling off while, at the same time, it is requested to assume an increasingly large amount of indirect departmental costs. However, the committee has come to the conclusion that it should address those issues only when the implementation of the Organisational Renewal Exercise has progressed further and that the impact of other departmental re-arrangements (including the expenditure review and the centralisation of Digital Information Services) can be measured.

2. 3.3.2  Information Management and Information Technology: As mentioned in our previous report, the MAB had set up an Ad Hoc Task Force to provide direct advice to staff in the development of the E-Filing project. This task was transferred to the committee on Information Management and Information Technology when the committee structure was established. In addition to continuing to support the E-filing project, the committee, acting in concert with the OSB's staff, has defined its priorities as follows: E-Filing, IM/IT Strategic Plan, Information Products and Management Information Systems. It will also provide consultation with regard to the Strategic Information Plan being developed within the OSB. It should be noted that, beyond the technology and the digital services the OSB is offering or is planning to offer, the committee focus, along with that of the Superintendent, is to embrace the development of information management systems, thus providing a useful support to the requirements associated with the Organisational Renewal referred to above. The MAB was informed that all data processing functions were now to be centralized under a Chief Information Officer with departmental responsibility. It is understood that discussions are being held for the purpose of defining the arrangements that will need to be made to ensure that under that new structure, the functions for which the OSB is accountable will continue to be performed to the satisfaction of users priorities and in compliance with service standards that meet public expectations. In addition, it will be necessary to ensure that suitable arrangements are made for the development of new functions to respond to market demands, as well as to generate much needed revenues.

3. 3.3.3  Communications: This is another area that the MAB felt needed particular attention as it was important that the new initiatives being launched either internally or externally through the ORE and the compliance strategies, be effectively communicated and understood. The committee on Communications was then set up for the purpose of providing consulting assistance to the OSB. In that regard, it proceeded to evaluate the situation and then to supervise the retention of external consultants to review and assess the current communications tools and strategies at the OSB. A specific proposal has been submitted for consideration for both internal and external communications. However, in the context of the Organisational Renewal, it was recommended that internal communications be the first priority. The consultants selected by the OSB are now to produce a communications plan which will be submitted to the MAB in due course for review and advice.

3.4  The Nominating Committee:

1. 3.4.1  As the name indicates, this Committee was set up for the purpose of defining the profile of candidates to be recruited to fill MAB vacancies as they occur and to assist the Superintendent in the identification of qualified candidates.

2. 3.4.2  The Committee has met several times so far for that purppose as, in addition to one vacancy caused by the resignation of one member, further vacancies are expected to occur regularly in the future as the current member's terms of appointment expire. This will allow for regular membership rotation and for the recruitment of persons with diverse backgrounds, thus enabling the OSB to have access to different expertises.

3. 3.4.3  It should be recalled that it is on the basis of an examination by this Committee that the MAB developed the recommendations outlined in the previous Chairman's Report (at paragraphs 4.11 and 4.12) concerning the terms of appointment of members and the mechanism that it was requested to establish by the Terms of Reference to support membership rotation. The recommendations submitted by the Committee in this regard are made on the basis of the revised procedure.

⁸ Op. cit. pp. 168-169.

4.0  Conclusion

4.1  It should be apparent from this Report that, thanks to an open and constructive relationship between the Superintendent, his staff and the MAB, a vast number of issues concerning the management of the OSB have been examined and hopefully, have benefited from the experience and expertise of the MAB members.

4.2  As a result of the Organisational Renewal Exercise (ORE), to say nothing of the 5-year legislative review, a number of strategically critical issues have been brought to the fore and will obviously require sustained attention on the part of the Superintendent and his staff in the foreseeable future.

4.3  The MAB looks forward to working with the Superintendent and his staff and to making its contribution, along with the OSB staff, to the realisation of their demanding and ambitious objectives. The MAB has full confidence not only in their determination but also and foremost in their ability to meet those challenges with utmost success.

4.4  In this regard, no conclusion to this Report would be more appropriate than a quotation from the Senate Committee Report, which reads as follows: ⁹

"The Committee believes that the Office of the Superintendent of Bankruptcy plays a key supervisory and administrative role with respect to the BIA, and provides high quality services to stakeholders despite budgetary pressures. Its existence, and the actions it takes in such areas as ensuring compliance with the legislation and safeguarding transparency, accountability and integrity, help to ensure that all Canadians, Canadian companies and foreign investors benefit from an insolvency system that is characterized by the highest level of integrity. We applaud the Superintendent and others in the Office of the Superintendent of Bankruptcy and encourage them to continue with their efforts to ensure that Canada continues to be regarded as having an insolvency system that ranks among the best in the world."

⁹ Op. cit. page 166-167.

Appendix A

OSB Management Advisory Board – Current Members List

Chairman:

Jean-Claude Delorme
since June 1998

Members:

Diana Graham
since February 1999
Senior Vice-President, Retail and Small Business Credit – CIBC Risk Management Division

Yanik Harnois
since June 2001
Human Resource Specialist

Robert Sanderson
since March 2000
Insolvency Practitionner

Larry Prentice
since October 2003
Insolvency Practitionner

Uwe Manski
since June 1998
Insolvency Practitionner

David Howden
since June 1998
Director Electronic Service Delivery Implementation – Integrated Service Delivery Division Ontario Ministry of Consumer and Business Services

Francine Bastien
since June 2001
Communications Specialist

Susan Robinson Burns
since April 2002
Lawyer

Joan Huzar
since January 2003
Consumer Council of Canada

George H. Boynton
since June 1998
Informatics Specialist

Jean-Yves Fortin
since June 2002
Lawyer

OSB Management Advisory Board – Past Members List

Membres:

Gisèle Samson Verreault
From June 1998 to June 1999

Ivanhoé Beaulieu
From June 1998 to October 1999

Ralph Peterson
From June 1998 to May 1999

Lucille Riedle
From June 1998 to September 2000

Peter Wedlake
From September 2001 to April 2003

Wayne Proctor
From April 2002 to June 2002

Ray Gibbs
From October 1998 to April 2001

Ron Whiting
From June 1998 to January 2001

Pat White
OACCS
From June 1998 to June 2002

Andrea Boudreau Ouellet
From April 2002 to June 2004

List of OSB Offices

Headquarters - Ottawa
365 Laurier Avenue West, 8^th Floor
Jean Edmonds Tower South
Ottawa, Ontario
K1A 0C8
Phone: (613) 941-1000
Fax: (613) 941-2862
Name Search: (613) 941-2863
Statistics: (613) 941-9054

Calgary
Standard Life Tower
Suite 510
639 5th Avenue South West
Calgary, Alberta
T2P 0M9
Phone: (403) 292-5607
Fax: (403) 292-5188

Edmonton
Canada Place, Suite 725
9700 Jasper Avenue
Edmonton, Alberta
T5J 4C3
Phone: (780) 495-2476
Fax: (780) 495-2466

Halifax
Maritime Centre
1505 Barrington Street, 16^th Floor, Suite 1605
Halifax, Nova Scotia
B3J 3K5
Phone: (902) 426-2900
Fax: (902) 426-7275

Hamilton
Federal Building
55 Bay Street North, 9^th Floor
Hamilton, Ontario
L8R 3P7
Phone: (905) 572-2847
Fax: (905) 572-4210

London
303 - 451 Talbot Street
London, Ontario
N6A 5C9
Phone: (519) 645-4034
Fax: (519) 645-5139

Montreal
5 Place Ville-Marie, 8^th Floor
Montreal, Quebec
H3B 2G2
Phone: (514) 283-6192
Fax: (514) 283-9795

Ottawa
Place Bell Building
160 Elgin Street
11^th Floor, Room B-119
Ottawa, Ontario
K2P 2P7
Phone: (613) 995-2994
Fax: (613) 996-0949

Sainte-Foy
1141 route de l'Église, 4^th Floor
Sainte-Foy, Quebec
G1V 3W5
Phone: (418) 648-4280
Fax: (418) 648-4120

Regina
600 - 1945 Hamilton Street
Regina, Saskatchewan
S4P 2C7
Phone: (306) 780-5391
Fax: (306) 780-6947

Saskatoon
123 - 2nd Avenue South, 7^th Floor
Saskatoon, Saskatchewan
S7K 7E6
Phone: (306) 975-4298
Fax: (306) 975-5317

Sherbrooke
2665 King Street West, Suite 600
Sherbrooke, Quebec
J1L 2G5
Phone: (819) 564-5742
Fax: (819) 564-4299

Toronto
600 - 25 St. Clair Avenue East
Toronto, Ontario
M4T 1M2
Phone: (416) 973-6486
Fax: (416) 973-7440

Vancouver
1900 - 300 West Georgia Street
Vancouver, British Columbia
V6B 6E2
Phone: (604) 666-5007
Fax: (604) 666-4610

Winnipeg
400 St. Mary Avenue, 4^th Floor
Winnipeg, Manitoba
R3C 4K5
Phone: (204) 983-3229
Fax: (204) 983-8904