In Canada v. Canada North Group Inc., 2019 ABCA 314, the Court of Appeal of Alberta (the ABCA) upheld the decision of the Court of Queen's Bench of Alberta (the Lower Court), which held that the Companies' Creditors Arrangement Act (the CCAA) permits courts to subordinate statutory deemed trusts in favour of the Crown to court-ordered insolvency priming charges.
Priming charges (or super-priority charges) are created by court order pursuant to discretion granted under sections 11.2, 11.51 and 11.52 of the CCAA to facilitate a debtor's access to interim financing for the purpose of completing a restructuring or arrangement process. They rank ahead of claims held by secured creditors who would otherwise rank in priority, and may even supersede prior-granted priming charges if the court so orders.1
In July 2017, the Lower Court issued an initial order granting Canada North Group Inc. and certain related companies (collectively, theDebtors) protection under the CCAA and approving priming charges totalling $1,650,000 (comprised of an administration charge, an...
