Piekut v. Canada (National Revenue),2023 BCCA 181, 2025 SCC 13 (40782)
“The bankrupt pursued post-secondary education programs from 1987 to 1994, 1994 to 1995, 2002 to 2003, and 2006 to 2009. She financed the final program herself, but received federal student loans for her other programs. In October 2013, the bankrupt made a consumer proposal under the Bankruptcy and Insolvency Act (“BIA”), listing her student loan debt among her liabilities. In December 2017, she was granted a certificate of full performance of her consumer proposal under the BIA.
In June 2019, the bankrupt applied for a declaration that she “ceased to be a full‑ or part‑time student” under s. 178(1)(g)(ii) of the BIA in 2003, and that her student loan debt was therefore released under s. 178(2). Section 178(2) of the BIA provides that an order of discharge releases a bankrupt from all claims provable in bankruptcy, except for specific claims listed in s. 178(1). Section 178(1)(g)(ii) provides that an order of discharge does not release the bankrupt from any debt or obligation in respect of a government student loan where the date of the bankruptcy occurred “within seven years after the date on which the bankrupt ceased to be a full‑ or part-time student”. The bankrupt argued that a multiple‑date approach to s. 178(1)(g)(ii) should be adopted —under that approach there can be several dates on which the bankrupt ceased to be a student, corresponding to the end dates of the bankrupt’s various programs of study — as opposed to a single‑date approach — under which there can only be one date on which the bankrupt ceased to be a student, that is, the last date the bankrupt ceased to be a student before the date of bankruptcy. She claimed that, for the purposes of s. 178(1)(g)(ii), she ceased to be a student in 2003, when she completed her last period of study funded by a government student loan.
The chambers judge dismissed the bankrupt’s application. As a matter of stare decisis, he followed the single‑date approach previously endorsed by the Supreme Court of British Columbia and found that the bankrupt ceased to be a student in 2009, at the end of her last study period. The Court of Appeal dismissed the bankrupt’s appeal. The bankrupt appeals to the Court, and also raises a new legal issue: whether a creditor must obtain a separate court order regarding their claim under s. 178(1)(g) before the claim is enforceable.”The SCC dismissed the appeal (6:3, in part).
Justice Jamal wrote as follows (at paras. 2, 5-7, 118-121):
“Section 178(2) of the BIA provides that an order of discharge releases a bankrupt from all claims provable in bankruptcy, except for claims listed in s. 178(1). Specifically, s. 178(1)(g)(ii) provides that an order of discharge does not release the bankrupt from any debt or obligation in respect of a government student loan where the date of the bankruptcy occurred “within seven years after the date on which the bankrupt ceased to be a full- or part-time student”. Section 178 also applies to consumer proposals, which provide a quicker, more efficient, and less costly alternative to bankruptcy for individuals under certain circumstances. The question raised on this appeal is: When does a bankrupt cease to be a full- or part-time student under s. 178(1)(g)(ii)?
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Applying the modern principle of statutory interpretation and interpreting s. 178(1)(g)(ii) based on its text, context, and purpose, I conclude that the single-date approach is the correct interpretation. Critically, the single-date approach promotes the statutory purposes or policy goals of this provision: to reduce government losses on student loan defaults; to ensure the sustainability of student loan programs for future generations; and to ensure borrowers have a reasonable time after finishing their studies to capitalize on all their education to allow them to repay their student loans, thus deterring opportunistic bankruptcies.
Because the appellant, Ms. Izabela Piekut, was a full- or part-time student until 2009 and filed a consumer proposal only four years later, in 2013, she could not be released from her student loan debt by s. 178(1)(g)(ii) and (2) of the BIA.
The appellant also raises a new legal issue for the first time before this Court. She claims that a creditor must obtain a separate court order regarding their claim under s. 178(1)(g) before the claim is enforceable. I disagree. Student loan debts arise under legislation, are easily proved, and fall under s. 178(1)(g) without requiring a separate court order.
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The appellant’s reliance on this Court’s decision in Montréal (City) v. Deloitte Restructuring Inc., 2021 SCC 53, [2021] 3 S.C.R. 736, is misplaced. That case involved a creditor’s burden to prove debts relating to property or services obtained by false pretences or fraudulent misrepresentation under s. 19(2)(d) of the Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, which was analogous in every respect to s. 178(1)(e) of the BIA (paras. 24 and 25; see also Poonian, at para. 67). Contested allegations of fraud are often complex and inherently factual and thus require a separate judicial determination. Student loan debts, by contrast, arise under legislation, are easily established, and do not raise the same problems of proof.
This conclusion is confirmed by public guidance issued by the Office of the Superintendent of Bankruptcy, which states that separate court orders are not required with regard to student loan debts under s. 178(1)(g), even though they may be needed for other debts under s. 178:
‘. . . if it had been less than seven years since the bankrupt ceased to be a full- or part-time student at the time the bankruptcy was filed, then the student loan debt falls within paragraph 178(1)(g) of the BIA and is, therefore, an undischargeable debt that will not be released by an order of discharge. No further court order is needed with regard to these debts. Similarly, orders obtained prior to bankruptcy that conclusively bring a debt within section 178 do not require a further court order after the trustee’s discharge.
For all other debts that are alleged to fall under section 178 of the BIA, a court ruling is the only conclusive way to confirm that this is the case and the onus is on the creditor to prove that its claim falls within subsection 178(1) of the BIA. [Emphasis added.] …’
In addition, here, the appellant acknowledged her student loan debts and led evidence on the amounts owing in her consumer proposal and application for release.
I would therefore reject the appellant’s argument that a student loan creditor must obtain a judicial determination regarding their claim before it can be enforced under s. 178(1)(g) of the BIA.”