Supreme Court Of Canada Settles Excise Tax Act Priorities In CCAA Action


held in Century Services Inc. v. Canada (Attorney General), 2010 SCC 60 (“Century”) that the Crown does not enjoy super-priority in relation to unremitted Goods and Services Tax (“GST”) under the provisions of the Companies’ Creditors Arrangements Act (“CCAA”). Century Services Inc. was successfully represented by lead counsel Mary Buttery, now the head of Davis LLP’s Business Solutions and Restructuring Group in Vancouver.

The Court in Century was asked to interpret a potential discrepancy between competing provisions of the Excise Tax Act (“ETA”) which provides for a deemed trust for unremitted GST in favour of the Crown except in bankruptcy, and the CCAA which contains no such provision. The effect of this decision was to harmonise the treatment of unremitted GST in CCAA and Bankruptcy and Insolvency Act (“BIA”) proceedings. The Court noted that the two acts are meant to operate in tandem and accordingly interpreted them harmoniously.

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