On December 27, 2022, the IRS issued two notices providing key initial guidance for the new excise tax on corporate stock buybacks and the new corporate alternative minimum tax (CAMT). Both the excise tax and the CAMT were enacted as part of the Inflation Reduction Act that Congress passed in August 2022.¹

In a unanimous decision issued November 8, 2018, the Supreme Court of Canada granted the appeal of the decision of the Federal Court of Appeal in Canada v Callidus Capital Corp, 2017 FCA 162.

In a unanimous decision issued November 8, 2018, the Supreme Court of Canada granted the appeal of the decision of the Federal Court of Appeal in Canada v Callidus Capital Corp, 2017 FCA 162.

We have recently profiled conflicting cases (available here and here) dealing with a priority contest between supe

Unremitted source deductions are subject to a deemed trust in favour of the Crown under Section 227 of the Income Tax Act (the “ITA”), Section 86 of theEmployment Insurance Act (the “EIA”) and Section 23 of the Canada Pension Plan (the “CPP”). Subsection 227(4) of the ITA creates the trust for income tax deductions and Subsection 227(4.1) creates a super-priority lien in favour of the Crown, in the amount of the trust, over all the debtor’s assets.

Recent regulations confirm that the GST/HST deemed trust has priority over all security interests and charges except for land or building charges. That exception has its own limitations. It is limited to the amount owing to the secured creditor at the time the tax debtor failed to remit the GST/HST. It also forces the secured creditor to look first to its other security; a kind of forced marshalling.

In its recent decision in Century Services Inc v Canada,1 the Supreme Court of Canada (the “SCC”) held that, in the context of a Companies’Creditors Arrangement Act2 (the “CCAA”) proceeding, the Crown does not have a superpriority claim over the property of a debtor for unremitted goods and services tax (“GST”) amounts. The decision of the SCC majority rejected existing appellate-level case law, and brought the priority of Crown claims in-line with what they are in bankruptcy proceedings.

2010 SCC 60 (Released 16 December 2010)

Bankruptcy and Insolvency – Companies’ Creditors Arrangement Act – Priorities

In the first decision of the Supreme Court of Canada considering the Companies’ Creditors Arrangement Act (“CCAA”), the court discusses the principles of interpretation for the CCAA. Apart from its importance in that respect, the decision is also of interest for its discussion of statutory interpretation, particularly with respect to statutory amendments.

Century Services Inc. v. Canada (Attorney General), 2010 SCC 60

Section 222(3) of the Excise Tax Act creates a deemed trust for unremitted GST, which operates despite any other act of Canada, except the Bankruptcy and Insolvency Act. However section 18.3(1) of the Companies’ Creditors Arrangement Act (the "CCAA") provides that any statutory deemed trust in favour of the Crown does not operate under the CCAA, subject to certain exceptions which do not mention GST.

The Supreme Court of Canada recently ruled in the Century Servicesi case that Goods and Services Tax (“GST”) deemed trusts under the federal Excise Tax Act (“ETA”) are ineffective in proceedings under the Companies’ Creditors Arrangement Act (“CCAA”).