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As part of the Valtus Alliance, CE Interim works closely with global restructuring leaders to exchange strategies that reflect each country’s legal environment, creditor culture, and business reality.

In this edition, Benoît Créneau, CEO of xNorth in Canada, sits down with Thaddäus Müller, Partner at FES Partners in China, to unpack how Canada’s restructuring framework balances flexibility, commercial pragmatism, and the critical role of interim leadership.

From court-approved plans to private equity trends and cross-border recovery, this conversation reveals what it truly takes to lead effective restructuring and turnaround in Canada.

🇨🇦 What makes Canada’s legal restructuring framework unique?

Benoît:

Canada is one of the most business-friendly jurisdictions when it comes to restructuring.

There are two primary legal tools:

• The Companies’ Creditors Arrangement Act (CCAA), used mostly for large enterprises
• The Bankruptcy and Insolvency Act (BIA), typically applied to smaller businesses

What sets Canada apart is the system’s pragmatic, flexible nature. Under the CCAA, distressed companies can continue running their operations during restructuring. That means leadership stays in control, employees stay on board, and the business can negotiate with creditors while maintaining enterprise value.

The courts tend to support commercially viable solutions that preserve stability and enable recovery.

⏳ What’s the most common mistake in early-stage liquidity crises?

Benoît:

Waiting too long.
Leadership often clings to optimism or assumes internal fixes will suffice. By the time the crisis is visible in the cash flow, negotiating power is already eroded.

Another trap is focusing only on tactical cost cuts while ignoring structural issues. I’ve seen companies delay hiring, cut travel budgets, or cancel small investments while still bleeding cash through outdated contracts or misaligned operations. It’s a classic case of saving pennies and losing dollars.

The real turnaround starts with challenging assumptions and addressing the root of the business model problem.

👤 When should an external restructuring expert be engaged?

Benoît:

As soon as you see red flags: recurring cash flow pressure, creditor anxiety, internal friction, or missed milestones. The earlier the intervention, the more options remain.

Usually, the role comes in as an interim CFO, CRO, or COO, depending on the business issue. The mandate should come from ownership or the board. That ensures the expert has legitimacy and can build alignment across stakeholders.

Early engagement can enable a full turnaround, not just a reaction.

💰 How do interim leaders secure payment in insolvency scenarios?

Benoît:

Most interim professionals are brought in before formal proceedings begin. That gives time to set up fixed-term contracts, advance payments, and milestone-based fees.

Under court oversight, like with the CCAA, payment terms are clearly structured and protected. But even in pre-filing cases, the key is staying close to the cash.

Financial clarity and tight contract terms are essential for ensuring fair compensation.

⚙️ Can you describe a recent turnaround project?

Benoît:

We supported a Canadian tech firm that was facing operational misalignment and increasing financial pressure. An Interim Executive led a rapid diagnostic that uncovered disconnects between how contracts were priced and how services were delivered.

We restructured the cost base, renegotiated supplier terms, reviewed pricing strategy, and improved working capital management. The result? Within 60 days, we stabilized cash and reopened strategic conversations, including investor engagement.

Thanks to our Valtus Alliance network, we were also able to tap into cross-border expertise during the strategic review.

🧠 What experience shaped your view of restructuring most deeply?

Benoît:

Early in my career, I worked on the turnaround of a subsidiary within a European group. The signs were all there: declining margins, operational bottlenecks, strained communication with headquarters.

But the intervention came too late. Teams were burned out, and investor trust had eroded. We managed to revive the business, but it was costly and exhausting.

That experience taught me the value of early action, transparent leadership, and the emotional dynamics of turnarounds. People and timing matter just as much as financials.

🤝 How effective is stakeholder collaboration in Canadian restructurings?

Benoît:

Generally strong. Courts are pragmatic, and most creditors understand the value of commercial solutions.

Challenges usually emerge when internal alignment is lacking. If management isn’t transparent, or if internal politics cloud decision-making, trust erodes quickly. But when leadership is clear and engaged, even multi-lender, cross-border cases can move efficiently.

🌍 What’s your advice for foreign companies with distressed Canadian subsidiaries?

Benoît:

Start with an assessment of how insulated the subsidiary is from the parent’s financial situation. Canadian entities are often structured independently, which allows for focused stabilization.

The next step is appointing a local interim executive to take control of the diagnostic and lead stakeholder engagement. Local market knowledge is critical when exploring paths like downsizing, divestiture, or refinancing. You want someone who knows how things work on the ground.

📉 How active is private equity in Canada’s restructuring market?

Benoît:

Private equity is playing a growing role, especially in special situations and post-turnaround acquisitions. But Canada is still more conservative than the US in this area.

Typically, PE firms step in after the restructuring, not during it. In early phases, banks and existing shareholders remain the primary players. That said, things are shifting, and we’re seeing more hybrid approaches emerge.

🏛️ Does the Canadian government provide crisis support?

Benoît:

Outside major crises like COVID, direct government support is limited. During the pandemic, programs like CEWS and CEBA helped. But in normal times, most support is indirect.

Agencies like BDC or Investissement Québec may provide refinancing for SMEs, especially in strategic sectors. Some provinces also offer employment retraining support, but operational restructuring remains a private-sector initiative in most cases.

🔚 Closing Thoughts

Canada’s legal environment and business culture provide a strong foundation for restructuring, but timing, trust, and tactical clarity are non-negotiable.

✅ Need Help Navigating a Turnaround in Canada?

CE Interim provides experienced interim CFOs, CROs, and turnaround leaders for Canada-based companies and international groups with operations in North America.

Explore our crisis and restructuring leadership and see how we support high-stakes execution from day one.