The CCAA within the Canadian insolvency regime

In 1990, the British Columbia Court of Appeal discussed the background behind the introduction of the CCAA in one of its rulings:

The CCAA was enacted by Parliament in 1933 when the nation and the world were in the grip of an economic depression. When a company became insolvent liquidation followed because that was the consequence of the only insolvency legislation which then existed - the Bankruptcy Act and the Winding-Up Act. Almost inevitably liquidation destroyed the shareholders' investment, yielded little by way of recovery to the creditors, and exacerbated the social evil of devastating levels of unemployment. The government of the day sought, through the CCAA, to create a regime whereby the principals of the company and the creditors could be brought together under the supervision of the court to attempt a reorganization or compromise or arrangement under which the company could continue in business.^[2]

The Supreme Court of Canada did not have a chance to explain the nature of the CCAA until the groundbreaking case of Century Services Inc. v. Canada (Attorney General) in 2010. In it, a detailed analysis was given in explaining the nature of insolvency law in Canada.
The Bankruptcy and Insolvency Act (BIA) provides a more rules-based approach for resolving a corporate debtor's insolvency, which must be observed strictly. The CCAA, on the other hand, provides a more discretionary approach that is remedial in nature, which therefore must be broadly construed.
Although the CCAA was originally enacted in 1933,^[3] extensive use of it only began in the economic downturn of the early 1980s. Recent legislative amendments of the BIA and CCAA have served to harmonize key aspects, such as the use of single proceedings, a common priority of claims structure, and encouraging reorganization over liquidation.

Discretionary power of the court in a CCAA reorganization

“	The legislation is remedial in the purest sense in that it provides a means whereby the devastating social and economic effects of bankruptcy or creditor initiated termination of ongoing business operations can be avoided while a court-supervised attempt to reorganize the financial affairs of the debtor company is made.	”
— - Elan Corp. v. Comiskey 1990 CanLII 6979, 1 OR (3d) 289 (2 November 1990), Court of Appeal (Ontario, Canada), per Doherty J.A., dissenting

This is noted together with s. 11 of the CCAA, which states that a court may, “subject to the restrictions set out in this Act, . . . make any order that it considers appropriate in the circumstances”.^[4]
The decision notes the interrelated nature of proceedings under the CCAA and BIA:

“

[77] The CCAA creates conditions for preserving the status quo while attempts are made to find common ground amongst stakeholders for a reorganization that is fair to all. Because the alternative to reorganization is often bankruptcy, participants will measure the impact of a reorganization against the position they would enjoy in liquidation. In the case at bar, the order fostered a harmonious transition between reorganization and liquidation while meeting the objective of a single collective proceeding that is common to both statutes.