Executive Summary: Key Legal and Evidentiary Issues

• Scope of a “provable claim” under the LACC/CCAA, incorporating the Bankruptcy and Insolvency Act definition, when the creditor’s right depends on a future exercise of contractual termination rights.
• Impact of Forex inc.’s cessation of activities and sale of its Mont-Laurier plant on the Ministère’s right to terminate the 2019 funding agreement (Entente 0204) and seek reimbursement of public funds.
• Effect of the absence of a contemporaneous formal notice of termination: whether a proof of claim based on a resolutory clause is valid without the notice being issued at the time of filing.
• Role and conduct of the court-appointed monitor (Contrôleur), who neither accepted nor rejected the Ministry’s proof of claim while Forex requested that analysis be deferred to facilitate negotiations.
• Consequences of Forex’s strategic exclusion of the Ministry’s claim from the CCAA distribution process and the later termination of CCAA proceedings on the Ministry’s ability to enforce its contractual rights.
• Application of Supreme Court of Canada jurisprudence (AbitibiBowater and related cases) on contingent and unliquidated claims to validate the Ministry’s proof of claim despite the quantum and exigibility not yet being fixed.

Factual background and the restructuring context

Forex inc., together with Forex Amos inc. and Wawa OSB inc., sought protection from their creditors under the Loi sur les arrangements avec les créanciers des compagnies (LACC/CCAA). On 7 February 2023, the Superior Court (Commercial Division) granted initial protection, authorized the companies to propose a plan of arrangement, and later approved a sale of most of their assets with proceeds to be distributed to creditors. Before distribution, creditors were invited to file proofs of claim with PricewaterhouseCoopers inc., the court-appointed monitor (Contrôleur).
The Ministère (represented by the Procureur général du Québec) had previously entered into at least two public funding agreements with Forex, including the central 2019 agreement known as “Entente 0204.” Under Entente 0204, the Ministry, as successor to Transition énergétique Québec, financed the installation of a biomass boiler designed to reduce greenhouse gas emissions at Forex’s Mont-Laurier facility. The agreement formed part of the “Programme Biomasse forestière résiduelle,” with public funds advanced to support energy-transition infrastructure, subject to specific contractual conditions and termination rights.
On 2 May 2023, in the course of the CCAA process, Forex sold its Mont-Laurier plant to a third party. The Ministry alleged that this sale resulted in a cessation of the activities envisioned by Entente 0204—a key factual trigger because the agreement contained clauses permitting the Ministry to terminate if those activities ceased. Parallel to Entente 0204, the parties were discussing the possible assignment of another funding agreement (Entente 0310) related to improving the efficiency of Forex’s biomass boilers, though the judgment under review principally focuses on Entente 0204.

The Ministry’s proof of claim and the disputed termination

On 16 June 2023, the Ministry filed a proof of claim in the amount of 614,100.89 CAD, based on both funding agreements, including Entente 0204. The Ministry asserted that Forex’s cessation of eligible activities and sale of the Mont-Laurier facility entitled it to rescind Entente 0204 and demand repayment of funds advanced for the biomass boiler project. The proof of claim relied on the contractual structure of Entente 0204: notably, Articles 19 and 20 provided for termination by the Ministry in the event of cessation of the funded activities, allowing the government to recover the financial assistance paid when the project no longer served its intended environmental purpose.
At the same time, however, the Ministry did not seek court authorization to serve a formal notice of termination in June 2023 and did not immediately send such a notice. Instead, responding to Forex’s overtures, it entered into discussions concerning a possible continuation of the Mont-Laurier operations or an assignment of the Entente 0204 rights and obligations to a purchaser of the plant. Those negotiations extended into 2025 without success. A second set of negotiations addressed the potential assignment of Entente 0310, again without a final agreement.
Notably, the monitor did not rule on the Ministry’s proof of claim. In a 25 September 2023 notice, the monitor reported that Forex contested the claim, but that “discussions are currently underway between Forex and the creditor to reach an agreement.” At Forex’s behest, the monitor refrained from analyzing or deciding the Ministry’s claim; Forex hoped instead to salvage or transfer the agreement and avoid formal termination. The Ministry, for its part, agreed to negotiate and held off exercising its termination right, though the judge later observed that, absent those negotiations, it would have been reasonable to expect the Ministry to send the contractual notice contemplated by Entente 0204.

Procedural evolution under the LACC and treatment of the claim

Over time, Forex’s approach effectively excluded the Ministry’s claim from the CCAA distribution mechanics. The Ministry’s proof of claim remained neither accepted nor rejected; no distribution was made to the Ministry, even as assets were sold and other creditors were paid. In October 2023, Forex sought to terminate the CCAA proceedings. To address the unresolved government claim, Forex paid funds into a trust (fiducie) as security, with the understanding that those monies would be available to satisfy the Ministry’s claim if negotiations failed.
An earlier order of 15 May 2023 had already set the framework for treating claims, specifying that “réclamations” encompassed debts and obligations “présentes ou futures” and “dues ou pouvant être dues,” thereby recognizing that contingent, future or not-yet-liquidated claims could still be captured within the CCAA claims process. This aligned with the broader insolvency law approach that nearly all claims, including those not immediately due or fully quantified, should be dealt with in one comprehensive process.
By January 2024, the CCAA proceedings formally ended. Negotiations between Forex and the Ministry collapsed in early 2025. At that point, with CCAA protection lifted and discussions exhausted, nothing barred the Ministry from exercising its contractual right to terminate Entente 0204 and seek reimbursement based on the cessation of activities at Mont-Laurier. Against this backdrop, the Ministry applied to the Superior Court (sitting in its commercial jurisdiction) to have its June 2023 proof of claim recognized as valid notwithstanding the absence of a contemporaneous termination notice and despite Forex’s objections.

Key legal issues: provable claims and contractual termination

The central legal debate concerned whether the Ministry’s proof of claim was valid and “provable” under the LACC at the time it was filed, given that: (1) the funding agreement had not formally been terminated, and (2) the precise amount recoverable depended on when Forex’s activities under Entente 0204 ceased. Forex argued that without a formal termination notice, no enforceable debt existed in June 2023, and the claim therefore lacked a valid legal basis.
The court rejected this argument on two principal grounds. First, it held that under the LACC, read together with section 121(1) of the Loi sur la faillite et l’insolvabilité (LFI/BIA), a “réclamation” includes all present and future obligations to which a debtor is subject at the date of insolvency, or may become subject before discharge. This means that a claim may be provable even if it is not yet liquid, not yet due, or dependent on future events. The judge relied on the Supreme Court’s reasoning in Terre-Neuve-et-Labrador c. AbitibiBowater inc. and Orphan Well Association c. Grant Thornton Ltd. to emphasize that the CCAA regime is designed to channel nearly all claims into a single process, including those whose exact amounts or enforceability conditions have not yet fully crystallized.
Second, the court observed that, as a matter of substance, the Ministry’s right to terminate and recover funds from Forex arose when Forex ceased the activities covered by Entente 0204. The cessation of operations at Mont-Laurier brought the resolutory clause into play; the absence of a formal notice at that moment did not erase the underlying obligation. Given that the obligation’s origin predated insolvency and its monetary value was determinable, the monitor could and should have treated the Ministry’s proof of claim as admissible, subject to quantification. The court thus concluded that the Ministry’s claim was indeed a “réclamation prouvable” under insolvency law even before the notice of termination was actually sent.

Additional reasoning on the exclusion from the CCAA regime

The judge further reasoned that Forex’s challenge failed for another, more practical reason: Forex had effectively taken the Ministry’s claim out of the CCAA scheme. By discouraging the monitor from adjudicating the proof of claim, paying other creditors, selling key assets, and then obtaining the termination of the CCAA proceedings, Forex ensured that the Ministry’s claim would not be processed under the plan. Instead, Forex set aside trust funds to cover the Ministry’s potential claim in the event negotiations failed, implicitly acknowledging that such a claim existed and could be enforceable.
Once the CCAA proceedings ended in January 2024, the statutory restructuring framework no longer constrained the Ministry. With negotiations unsuccessful by early 2025, the Ministry was free to send a termination notice and enforce its contractual rights under Entente 0204. In other words, Forex’s procedural strategy under the LACC could not retroactively undermine the Ministry’s contractual and statutory position. The LACC context had become largely irrelevant to the continuing validity of the Ministry’s claim; what remained was a classic contractual dispute about the enforcement of a termination clause and repayment obligations following cessation of the funded activities.

Outcome, successful party, and monetary consequences

In its formal disposition, the Superior Court granted the Procureur général du Québec’s October 4, 2023 application, declared valid the proof of claim filed by the Ministry on June 16, 2023 in relation to Entente 0204, and rejected Forex inc.’s November 28, 2025 contestation. The court ordered that the claim’s amount must still be determined based on the date on which Forex ceased the activities covered by Entente 0204, reflecting the conditional and quantification issues embedded in the termination clause and the factual record. The judgment also awarded costs (“frais de justice”) in favour of the Procureur général du Québec. Thus, the successful party in this decision is the Procureur général du Québec, acting on behalf of the Ministry. The court stopped short of fixing a final monetary amount: the original proof of claim was for 614,100.89 CAD, but the judgment expressly leaves the precise quantum of the Ministry’s recovery to be determined later, and the specific figure for costs is not stated. Accordingly, while the Ministry’s entitlement has been confirmed and costs have been awarded, the exact total of the monetary award and costs in favour of the successful party cannot be determined from this decision alone.