In the recent decision of Piekut v Canada (National Revenue), 2025 SCC 13 ('Piekut'), the Supreme Court of Canada ('SCC') considered when bankrupts are able to discharge their student loans under section 178(1)(g) of the Bankruptcy and Insolvency Act (the 'BIA'). Despite confusion across Canada as to whether the 'single-date' or 'multiple-date' approach applied, the SCC found that a proper interpretation of the text, context, and purpose of section 178(1)(g) mandated the single-date approach. The SCC held that a single-date approach met the statutory objectives of the section, while balancing fairness to student borrowers. Ultimately, this decision provides much needed clarity on the operation of section 178(1)(g) and the scope of dischargeable student loans in bankruptcy.
Background Facts
Pursuant to the BIA,a discharge order releases a bankrupt individual from all claims provable in bankruptcy, except for those listed under section 178(1). Section 178(1)(g)(ii) states that an order of discharge does not release the bankrupt from government student loan debt claims where the bankruptcy has occurred 'within seven years after the date on which the bankrupt ceased to be a full- or part- time student.'
While the BIA is clear that government student loans are dischargeable after seven years, determining when a bankrupt has ceased to be a student and when the seven year period has passed has been the subject of much disagreement across Canada. Courts in Québec and British Columbia have followed a 'single-date' approach where a bankrupt stops being a student on the last day they finish their...
