Federal and provincial tax collectors are no different from other creditors of a bankrupt company and cannot force a trustee to pay the taxes ahead of others, Canada' highest court ruled Friday.

The Supreme Court of Canada's ruling upheld a 2007 decision from the Quebec Court of Appeal, which found the relationship between tax authorities and companies that charged GST and provincial taxes on their behalf was not exempt from the provisions of the Bankruptcy and Insolvency Act.

The Court of Appeal had overturned an earlier Quebec Superior Court ruling in favour of the tax agencies.

Federal and Quebec tax authorities had argued that they were the owners of tax monies collected by suppliers on their behalf, and that the money collected should be considered separate from a bankrupt company's other money owing.

But the Supreme Court disagreed and dismissed the claim in the case, and found in favour of Raymond, Chabot Inc., the trustee for the estate of the debtor, Consortium Promecan Inc.

"When a supplier goes bankrupt, the tax authorities do not own GST and QST amounts that have been collected but not remitted or are collectible at the time of the bankruptcy," the court said in its written judgement. "Instead, they have an unsecured claim against the supplier."