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. individuals, businesses, and other organizations to meet their tax obligations and pay their outstanding debt.
The CRA will work 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 will be subject to CRA Collections and CRA legal actions.
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 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.
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.
CRA’s options when you do not pay your taxes owed
- Issue an Order to pay to your employer, just like a garnish on your wages without having to go to Court. An order to pay (Letter) is sent to your employer
- Place a Writ or Judgement on your home or any other property you own. This acts just like a mortgage, you sell they get paid this also prevents any further borrowing against the home
- If you are a business or self employed, they can place an order to pay against your receivables by sending a letter to the people you do business with; same as an order to pay.
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
For detailed information on how the CRA collects, see the following information circulars:
- IC98-1R5, Tax Collections Policies
- IC13-2R1 – Government programs collections policies
- IC13-3 – Customs collections policies