Federal Security Interests Research Study and Report 2000


Summary of legislative and regulatory provisions relating to non-consensual security interests

Excise Tax Act, R.S.C. 1985, c. E-15, ss. 314 and 317.

Section 314 allows the Minister to take security for amounts payable under the Act.; A detailed scheme is not provided, the section simply stating that the Minister can take security when the Minister considers it advisable and in an amount and form satisfactory to the Minister. Section 316 permits the Minister to issue a Ministerial Certificate, which can be registered in the Federal Court and has the same force and effect as a judgment.; Section 317 creates a scheme whereby the Minister may garnish the amounts payable from money owed to the debtor.

Income Tax Act, R.S.C. 1985 (5th Supp.) c. 1, s. 223, 224 and 227.

Section 223 allows the Minister to obtain and register a certificate in respect of amounts payable under the Act.; Once registered, the certificate is deemed to be a judgment of the Federal Court against the debtor for a debt due to Her Majesty.; Certificates may also be filed or otherwise recorded for the purpose of creating a charge on land.

Section 224 allows the Minister to order those about to make a payment to a tax debtor to make the payment instead to the Receiver General on account of the tax debtor's liability.; Section 224 also captures payments owing to secured creditors which, but for the security interest, would be owing to the tax debtor.;

Section 227 imposes a deemed trust in respect of amounts required to be withheld pursuant to regulations made under s. 153(1) of the Act.; The Crown has a lien and charge over the property and assets of the person required to withhold amounts under s. 153(1).; The Crown has been careful to draft s. 227 in such a way as to ensure that it has absolute priority in respect of claims concerning unremitted source deductions and GST.

Canada Pension Plan, R.S.C. 1985, c. C-8, as am. S.C. 1986, c. 6, s. 132, s. 23.

Section 23 of this Act creates a deemed statutory trust, similar to that created under the Income Tax Act.; Thus, the Crown holds a deemed trust in respect of amounts required to be withheld under the Canada Pension Plan.

Employment Insurance Act, S.C. 1996, Ch. - 23, s. 126.

Section 126 also creates a deemed statutory trust such that the Crown holds a deemed trust over the assets of the debtor for any amount that the debtor fails to remit under the Employment Insurance Act.

Radiocommunication Act, R.S.C. 1985, c. R-2, s. 13.

Pursuant to s. 13(1), where an individual is convicted of certain specified offences related to radiocommunications, the radio apparatus in relation to which or by means of which the offence was committed may be forfeited to the Crown.; Pursuant to this provision, the Crown is obligated to publish a notice of the forfeiture in the Canada Gazette (s. 13(2)).; Once this notice is published, anyone who "claims an interest in the apparatus as owner, mortgagee, lien holder or holder of any like interest" may make an application to any superior court of competent jurisdiction for an order declaring that his interest is not affected by the forfeiture and declaring the nature and extent of his interest and the priority of his interest in relation to other interests (s. 13(6)).; In addition, the court may order that the apparatus to which the interests relate be delivered to one or more of the persons found to have an interest therein, or that an amount equal to the value of each of the interests so declared be paid to the persons found to have those interests (s. 13(6)).

Security for Debts Due to Her Majesty Regulations, SOR/87-505, s. 3, 4.

Section 3 provides that a Minister responsible for the recovery or collection of any debt or obligation due or payable to the Crown may accept a security (as defined in section 4) in respect of any such debt, obligation or claim.; It also states that such a Minister may execute and deliver, on payment of any such debt, obligation or claim, any instrument that will effectively release or discharge any security accepted in respect of the debt, obligation or claim, or, on payment of a portion of any such debt, obligation or claim, any instrument that will effectively release or discharge any security accepted in respect of the portion of the debt, obligation or claim that has been paid.

Section 4 defines “security” as “a charge in favour of Her Majesty on the existing or future personal or real property of a debtor or on the existing personal or real property of a person who is the surety or guarantor of the debtor”.

Telecommunications Act, 1993, c. 38, s. 74.1 (amendment not yet in force)

This section is identical to s. 13 of the Radiocommunication Act, except that it deals with telecommunications apparatus instead of radiocommunication apparatus.

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