Case in Brief

A Case in Brief is a short summary of a written decision of the Court, drafted in plain language. These summaries are prepared by communications staff of the Supreme Court of Canada. They do not form part of the Court’s reasons for judgment and are not for use in legal proceedings.

Piekut v. Canada (Minister of National Revenue)

Case summary

The Supreme Court holds that for bankruptcy purposes, there can only be a single date when a person stops being considered a student.

This appeal asks the Court to clarify when government-issued student loan debts are released under the Bankruptcy and Insolvency Act (“BIA”).

The appellant pursued several post-secondary education programs between 1987 and 2009. From 1987 to 1994, she studied for a Bachelor of Arts degree, and from 1994 to 1995, she pursued a teaching diploma, both at the University of Calgary. A few years later, the appellant returned to university. From 2002 to 2003, she studied for a Bachelor of Education degree, and from 2006 to 2009, she pursued a Master of Education degree, both at the University of British Columbia. The appellant received federal student loans for all her post-secondary education programs, except for her Master of Education, which she financed herself.

In 2013, Ms. Piekut made a consumer proposal under the BIA. A consumer proposal is a legally binding agreement between a consumer and their creditors. It offers an alternative to bankruptcy, allowing the consumer to repay a portion of their debts over a set period, while avoiding the loss of assets.

Under the BIA, a person cannot be discharged from government-issued student loan debt before seven years have passed from the date on which they ceased to be a student. In 2019, Ms. Piekut applied for a declaration that she “ceased to be a full- or part-time student” in 2003, and requested that her student loan debt be released under section 178(2) of the BIA. She argued that, for the purposes of section 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. She further argued that her part-time student status during her master’s degree should not be considered as the date she was last a student because that degree was self-funded.

The chambers judge at the Supreme Court of British Columbia dismissed her application. He found that Ms. Piekut ceased to be a student at the end of her last study period in 2009. The British Columbia Court of Appeal agreed and dismissed her appeal.

The Supreme Court dismissed Ms. Piekut’s subsequent appeal.

Ms. Piekut ceased to be a student in 2009, 4 years before her consumer proposal.

Writing for a majority of judges, Justice Jamal said that because Ms. 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 sections 178(1)(g)(ii) and (2) of the BIA. Applying the modern principle of statutory interpretation and interpreting section 178(1)(g)(ii) based on its text, context, and purpose, Justice Jamal concluded that there can be only one date on which a bankrupt ceases to be a student: the last date the bankrupt ceased to be a student before the date of bankruptcy. As he explained, this “single-date” approach promotes the statutory purposes 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.