The Province of British Columbia appealed a decision holding that a statutory trust created by the Social Service Tax Act for collected but unremitted sales tax did not give the Province priority over other creditors under the Bankruptcy Act.
The Supreme Court of Canada dismissed the appeal, holding that the statutory trust is not a trust within the meaning of s. 47(a) of the Bankruptcy Act once the funds are commingled and cannot be traced.
Instead, it is merely a Crown claim under s. 107(1)(j) of the Bankruptcy Act, which ranks lower in priority.
