Volume 42 | Number 3 Summer 2007
V. Conclusion
Preference law design implicates five key questions:
(1) What is the objective: debtor deterrence, creditor deterrence or equality of distribution?
(2) How much weight should the law give to competing concerns, such as finality of transactions and facilitating the provision of credit to financially distressed debtors?
(3) What, if any, evidentiary concessions should the law make in favour of either the trustee or the creditor?
(4) What form should the law take: bright-line rules, at the risk of over- and under-inclusiveness, or standards, at the risk of increased uncertainty?
(5) What role, if any, is there for the concurrent application of provincial laws?
Current Canadian preference law suffers from the failure to have systematically addressed any of these questions. The government’s most recent reform initiatives are subject to the same criticism. The purpose of this paper has been to demonstrate that wholesale reform is necessary, and that tinkering of the kind the most recent reforms represent is at best insufficient and at worst counter-productive. There seems to be a general consensus on the need for reform, but there is as yet no consensus on how the questions listed above should be answered. Perhaps that is because until now policy makers and stakeholders have not given them sufficient thought. If this paper succeeds in raising the level of awareness about what the choices are, then it will have done its job. The choices themselves can then be left to others.
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Footnotes
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