Super-Priority for Canadian Workers

After years of kerfuffle that at times made BAPCPA's debates seem easy, the Canadians finally passed their revisions to the Bankruptcy and Insolvency Act (and, for junkies, the CCAA) this summer.  Here's a link to the Superintendent's site for the curious to get started.

What I thought was one of the more interesting amendments was the elevation of priority for employee wages to super-priority above secured liens (up to cap of $2K per employee, and, interestingly, not on equipment liens).  There is also an unlimited super-priority for unpaid or unremitted pension obligations (but not for the traditional "underfunded" pension plan).  Finally, to add a good ol' socialist kicker, an administrative beast called the Wage Earner Protection Program will come into being to ensure, among other things, payment of workers'  claims and then enjoy subrogation to the bankruptcy claims (thus taking the risk of debtor-employer inability to pay the super-claim).

The interesting lobbying game is the lender lobby: yes, they've been rending some garments, begrudging the "unfairness" of not giving secured lenders their bargained-for rights through the danger of such an unexpected ex post lien (although, ironically, one law-firm communique I saw gave its lender-clients advice on how to prepare, including encouraging oversight of debtors to have competent payroll services that remit pension obligations -- which looks like signs of an adjusting market to me).  But they haven't wanted to make too big a stink ("No, we're against workers' priorities!").  The rearguard grumbling they've had is how it would have been better to have such employees covered by the general taxpayers.

Will secured credit dry up in Canada as we know it?  Seems to have done pretty well notwithstanding the insolvency horror of a priming lien down here.  I reckon it'll chug along just fine north of the border too.  We'll see!