Under the Excise Tax Act, GST that is collected is deemed to be held in trust for the Crown, and that this takes precedence over any other statute other than the BIA.

The British Columbia Supreme Court ruled that, as the funds were being held pending the emergence of a viable reorganization plan, the fact that this was unsuccessful meant that the Crown would lose its priority as a result of the assignment into bankruptcy.

Recent legislative amendments of the BIA and CCAA have served to harmonize key aspects, such as the use of single proceedings, a common priority of claims structure, and encouraging reorganization over liquidation.

The Parliament of Canada's recent legislative activity has tended to favour the diminishing of the Crown's priority in BIA and CCAA proceedings, and both have been expressly amended accordingly.

The legislation is remedial in the purest sense in that it provides a means whereby the devastating social and economic effects of bankruptcy or creditor initiated termination of ongoing business operations can be avoided while a court-supervised attempt to reorganize the financial affairs of the debtor company is made.This is noted together with s. 11 of the CCAA, which states that a court may, "subject to the restrictions set out in this Act, .

Similarly, the Crown does not dispute that under the scheme of distribution in bankruptcy under the BIA the deemed trust for GST ceases to have effect.

Thus, after reorganization under the CCAA failed, creditors would have had a strong incentive to seek immediate bankruptcy and distribution of the debtor's assets under the BIA.

's order staying Crown enforcement of the GST claim ensured that creditors would not be disadvantaged by the attempted reorganization under the CCAA.

[77] The CCAA creates conditions for preserving the status quo while attempts are made to find common ground amongst stakeholders for a reorganization that is fair to all.

Century Services was the first opportunity to explain the complete nature of Canadian insolvency law and how each of the statutes work within that framework.

In exercising CCAA authority, the court is to bear in mind the requirements of appropriateness, good faith and due diligence as baseline considerations.

As to appropriateness, the court is to inquire whether the order sought advances the public policy objectives of the CCAA – avoiding the social and economic losses resulting from a liquidation.