Constitutional Question, Bankruptcy & RTA Termination

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Date Retrieved:	2025-06-21
CLNP Page ID:	2438
Page Categories:	[Constitutional Law], [Bankruptcy], [Bankruptcy & Consumer Proposals (BIA)], [Payment of Rent (LTB)]
Citation:	Constitutional Question, Bankruptcy & RTA Termination, CLNP 2438, <https://rvt.link/dx>, retrieved on 2025-06-21
Editor:	Sharvey
Last Updated:	2024/11/04

407 ETR Concession Co. v. Canada (Superintendent of Bankruptcy), 2015 SCC 52 (CanLII), [2015] 3 SCR 397

[21] I consequently agree with the Court of Appeal that the purpose and the effect of s. 22(4) of the 407 Act are to allow a creditor, ETR, to enforce the collection of toll debts, which in the context of this appeal constitutes a claim provable in bankruptcy. The remaining issue is whether this enforcement scheme conflicts with s. 178(2) of the BIA.

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[24] In my view, the respondent is correct on this issue of operational conflict. Pursuant to s. 178(2) of the BIA, creditors cease to be able to enforce their provable claims upon the bankrupt’s discharge: Schreyer v. Schreyer, 2011 SCC 35, [2011] 2 S.C.R. 605, at para. 21. As I indicate in the companion appeal, it is undisputed that a discharge under s. 178 of the BIA releases a debtor, thus preventing creditors from enforcing claims that are provable in bankruptcy. They are deemed to give up their right to enforce those claims. This includes both civil and administrative enforcement. In this case, ETR, the creditor, is faced with a clear prohibition under s. 178(2) of the BIA. It cannot enforce its provable claim, which has been released by an order of discharge. Since the debt collection mechanism put in place by s. 22(4) provides the creditor with an administrative enforcement scheme, it is impossible for ETR to use that remedy while also complying with s. 178(2): Canadian Western Bank v. Alberta, 2007 SCC 22, [2007] 2 S.C.R. 3, at para. 72; Husky Oil Operations Ltd. v. Minister of National Revenue, 1995 CanLII 69 (SCC), [1995] 3 S.C.R. 453, at para. 46. Indeed, ETR’s toll debt is not listed as an exemption under s. 178(1), and the resulting financial liability of the debtor cannot survive his or her discharge. As a result, the 407 Act says “yes” to the enforcement of a provable claim, while s. 178(2) of the BIA says “no”, such that the operation of the provincial law makes it impossible to comply with the federal law.

[25] In other words, while the provincial scheme has the effect of maintaining the debtor’s liability beyond his or her discharge, the federal law expressly releases him or her from that same liability. Both laws cannot “apply concurrently” (Western Bank, at para. 72) or “operate side by side without conflict” (Marine Services International Ltd. v. Ryan Estate, 2013 SCC 44, [2013] 3 S.C.R. 53, at para. 76); a debtor cannot be found liable under the provincial law after having been released from that same liability under the federal law: British Columbia (Attorney General) v. Lafarge Canada Inc., 2007 SCC 23, [2007] 2 S.C.R. 86, at para. 82; M & D Farm Ltd. v. Manitoba Agricultural Credit Corp., 1999 CanLII 648 (SCC), [1999] 2 S.C.R. 961, at para. 41; Multiple Access Ltd. v. McCutcheon, 1982 CanLII 55 (SCC), [1982] 2 S.C.R. 161, at p. 191. I respectfully disagree with my colleague that this conflict is “indirect” or concerns something that is merely “implicitly” prohibited by s. 178(2) of the BIA (Moloney, para. 92), or that I am resorting to a broad interpretation of s. 178(2) in order to find that an operational conflict exists (para. 36). Under the federal law, the debt is not enforceable; under the provincial law, it is. The inconsistency is clear and definite. One law allows what the other precisely prohibits.