The Century Services Case - Getting The Crown's Priorities Straight

Introduction

The decision of the Supreme Court of Canada last month in Century Services Inc. v. Canada¹ is of striking interest to the tax and insolvency bars. The Court considered Crown priorities, in particular, the various "deemed trust" provisions found in section 227 of the Income Tax Act (Canada),² section 86 of the Employment Insurance Act,³ section 23 of the Canada Pension Plan (the "CPP")⁴ and in particular section 222 of the Excise Tax Act (GST Portions).⁵

Importantly, the Court described the legal context of the deemed trust provisions within Canada's insolvency legislation. With all statutory interpretation now based on "a textual, contextual and purposive analysis",⁶ the Court's description of the inter‐relationship between the Bankruptcy and Insolvency Act ⁷(the "BIA") and the Companies' Creditors Arrangement Act⁸ (the "CCAA") and the interpretation to be given to tax legislation and other Crown priority conferring legislation in insolvencies