When you owe money – collections at the CRA

Most taxpayers pay on time!

9 out of 10 individuals who owe tax pay it on time.

Introduction

Canada has one of the highest rates of collections compliance in the world, and the Canada Revenue Agency's (CRA's) collection activities help fund public goods and services to support Canadians. It's important that we all pay our share. Unpaid taxes mean fewer funds for important programs and services supported by the Federal Government including health care, childcare, employment insurance, and urban and rural infrastructure projects, to name a few. The quality of life that all Canadians enjoy is supported by the taxes we pay.

The CRA helps to make it easier for individuals, businesses, and other organizations to meet their tax obligations and pay their outstanding debt. The CRA works with individuals and businesses who owe money to resolve their tax debt. Those who do not pay in full and on time or do not work collaboratively on resolving their debt with the CRA can be subject to legal actions.

Debts the CRA collects

The CRA collects amounts owed for tax programs (for example, goods and services tax/harmonized sales tax [GST/HST]) and other government programs (for example, defaulted Canada Student Loans).

Tax and other government program debts collected by the CRA

Tax programs

  • Individual income tax
  • GST/HST remittances
  • Payroll deductions
  • Corporation income tax
  • Customs, excise, and other levies
  • Benefit overpayments (Canada child tax benefit, universal child care benefit, GST/HST credit)

Other government programs

  • Defaulted Canada Student Loans
  • Employment insurance overpayments and penalties
  • Training Allowances Payment System overpayments
  • Canada Pension Plan overpayments
  • Grants and contributions overpayments
  • Operations and maintenance receivables
  • Other Employment and Social Development Canada program overpayments and/or penalties

When you owe

Any amount you owe is payable in full as soon as you are notified that you have been assessed or reassessed. The CRA makes it easy for you to make a payment online; you can make your payment anytime, from anywhere.

Where applicable, the CRA charges interest at the prescribed rate on any amount owing until the balance is paid in full.

What if I want to pay in full?

Paying at once and in full helps you avoid penalties, interest, and other legal and financial consequences. The CRA encourages individuals and businesses to meet their tax obligations and get their benefit entitlements without our intervention. Using e-services to file makes it even easier for you!

Pay your tax debt

The quickest and easiest way to pay your tax debt is through your online banking service, just as you would pay your hydro or cell phone bill. For more information on this and other payment methods available to you, please go to Make a payment.

Pay your other government program debt

The quickest and easiest way to pay your government program debt is through your online banking service, just as you would pay your hydro or cell phone bill. You can also make your payment at your financial institution or by cheque or money order by following these instructions:

  • Online banking service
    • Select "Government of Canada ESDC EDSC" if available through your financial institution's Web site.
    • When paying by Internet, you cannot direct a payment—all payments are applied according to oldest debt first.
    • Payments cannot be made using the CRA's "My Payment" option.
  • At your financial institution
    • Make your payment payable to "Receiver General for Canada."
    • Write your client ID number on your cheque or money order.
    • Include your remittance slip with your payment.
    • Do not staple your payment to the remittance slip.
  • Cheque or money order
    • Make your payment payable to "Receiver General for Canada."
    • Write your client ID number on the front of your cheque or money order.
    • Include your remittance slip with your payment.
    • Mail your payment to the payment office indicated on the back of your statement of account.
    • Do not staple your payment to the remittance slip.
    • Do not send cash through the mail.

What if I cannot pay in full now?

If you cannot pay the full amount you owe, take action right away. Ignoring your debt does not make it go away. In fact, waiting may make any financial or legal consequences more serious.

You may qualify for one of the programs below that help individuals and businesses meet their obligations without causing additional hardship.

I cannot pay my whole tax debt now

Payment arrangements

A payment arrangement is an agreement that some taxpayers and businesses enter into with us, which allows them to make smaller payments over time until they have paid their entire debt. If the CRA determines that you cannot pay your debt in full, we can work with you to develop a repayment plan.

To help us determine your ability to pay, you may have to make full financial disclosure and give evidence of your income, expenses, assets, and liabilities either by telephone or by completing a financial questionnaire supplied to you by a collections officer.

If you fail to make the agreed payments or don't otherwise keep your account up to date, we may cancel the arrangement and take legal action to recover any outstanding amount.

Please contact us to discuss your debt, as it is much easier for both you and the CRA to work out an acceptable repayment plan than it is to deal with any collection actions taken as a result of avoiding the issue.

To discuss payment arrangements for individual tax programs, go to Payment arrangements. For business tax programs, call us.

Taxpayer relief provisions

In some circumstances, you may be able to ask for relief from penalties and interest charges and reduce the overall amount you owe. For more information, and to see if your situation qualifies, see Taxpayer relief provisions.

I cannot pay my whole government program debt now

Payment arrangements

A payment arrangement is an agreement that some individuals and businesses enter into with us, which allows them to make smaller payments over time until they have paid their debt. If the CRA determines that you cannot pay your debt in full, we can work with you to develop a repayment plan.

To help us determine your ability to pay, you may have to make full financial disclosure and give evidence of your income, expenses, assets, and liabilities. You may have to do this by telephone or by completing a financial questionnaire supplied to you by a collections officer.

If you fail to make the agreed payments or don't otherwise keep your account up to date, the CRA may cancel the arrangement and take legal action to recover any outstanding amount.

Please contact us to discuss your debt, as it is much easier for both you and the CRA to work out an acceptable repayment plan than it is to deal with any collection actions taken as a result of avoiding the issue.

To discuss payment arrangements for your government programs debt, call us at 1-866-864-5823.

Financial hardship provisions

Hardship provisions exist to make sure that your repayment of a debt under a government program does not cause you undue financial hardship. Undue hardship exists when making payments on an amount owed to Employment and Social Development Canada deprives you of the necessities of life. This includes accommodation, food, clothing, and medical attention, as well as public utilities such as water, electricity, and heating.

It is your responsibility to contact us if making a payment arrangement will cause undue financial difficulty. Each case will be reviewed on its own merit. The CRA will make every effort to deal with your situation fairly, and with dignity and respect.

 

Note

If you feel you are insolvent or are considering bankruptcy as a possible solution to your outstanding debt, you may want to visit the Office of the Superintendent of Bankruptcy website for more information.

What if I do not pay and do not cooperate with the CRA?

If you do not pay your debt in full and on time, the CRA can use a variety of tools to recover the money you owe. These recovery options, as described below, may result in serious financial or legal consequences for you. Once legal proceedings have begun, the CRA will not usually withdraw them until the account is paid in full, or it can be shown that the action is causing undue hardship.

Note

Detaxers and tax protesters are wrong to say that you can lawfully:

  • refuse to pay tax and other amounts that are owed to a government
  • refuse to file an income tax and benefit return
  • claim amounts from a government as a sovereign citizen

Do not be misled by such false ideas. And to avoid penalties, please pay any balance that you owe to the Receiver General for Canada.

If you do not pay your taxes

Depending on the particulars of your case, the CRA may use one or more tools such as those listed below to recover the money you owe:

Set-off

If you are owed money from the federal government, the CRA can issue a statutory set-off to have all or part of that money sent to us to be applied against your outstanding balance, or automatically offset other amounts owed to you. For example, the CRA may offset your goods and services tax/harmonized sales tax (GST/HST) credit cheque to reduce or pay your outstanding income tax balance.

Garnishment

The CRA can issue a garnishment to intercept funds held for or payable to you by a third party such as your employer, your bank, or other sources of income. The CRA sends a requirement to pay to the person or organization to have all or part of your payment redirected to us to be applied against your outstanding debt

Certifying your debt in the Federal Court of Canada

The CRA can legally register your debt with the Federal Court of Canada and get a certificate confirming the amounts you owe to the Crown. Once registered, the certificate has the same force and effect as a judgment obtained in a court and makes your debt a matter of public record.

Seizing and selling your assets

The CRA can get a writ or memorial and seize your assets and property such as your car, boat, art, cottage, rental property, or personal residence and have it advertised and sold by a court enforcement officer. If we do this, you will have to pay all reasonable costs and any other charges we incur, as well as any balance that remains after the proceeds of the sale have been applied.

Holding another party jointly responsible for your debt

The CRA may hold a third party jointly responsible for your tax debt. The third party could be your spouse, a business partner, or a related corporation. For example, if a corporation has not remitted its GST/HST debts or source deductions, the CRA can hold the directors of that corporation jointly responsible for the corporation's debt.

If you do not pay your other government debt

Depending on the particulars of your case, the CRA may use one or more tools such as those listed below to recover the money you owe:

Set-off

If you are owed money from the federal government, the CRA can issue a statutory set-off to have all or part of that money applied against your outstanding balance, or automatically offset other amounts owed to you. For example, we can offset your income tax refund to reduce or pay off your defaulted Canada Student Loan.

Garnishment

The CRA can issue a garnishment to intercept funds held for or payable to you by a third party such as your employer, your bank, or other sources of income. We send a requirement to pay to the person or organization to have all or part of your payment redirected against your outstanding debt.

Certifying your debt in the Federal Court of Canada

The CRA can legally register your debt with the Federal Court of Canada and get a certificate confirming the amounts you owe to the Crown. Once registered, the certificate has the same force and effect as a judgment obtained in a court and makes your debt a matter of public record.

Seizing and selling your assets

The CRA can get a writ or memorial and seize your assets and property such as your car, boat, art, cottage, rental property, or personal residence and have it advertised and sold by a court enforcement officer. If we do this, you will have to pay all reasonable costs and any other charges we incur, as well as any balance that remains after the proceeds of the sale have been applied.

Get help

For detailed information on how the CRA collects, see the following information circulars:

Tax debt

To talk to an agent about your debt, or for more information on our collection policy, you can call us at the following numbers:

  • For individual tax debt: 1-888-863-8657
  • For GST/HST debt: 1-877-477-5068
  • For payroll tax debt: 1-877-548-6016
  • For corporation tax debt: 1-866-291-6346
  • Teletypewriter (TTY): 1-800-665-0354 (also see Services for persons with disabilities)

Other government program debt

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