Get relief from CRA debt.

If you owe income tax debt, EI/CERB overpayments or small business debt with the Canada Revenue Agency (CRA), filing a consumer proposal or bankruptcy could be your best solution.

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Common reasons for CRA debt. Personalized solutions to help.

Thousands of Canadians owe debt to the CRA—but not all for the same reasons. Finding the right debt solution starts with understanding the type of CRA debt you’re dealing with.

Scenario 1

I owe taxes, EI, or CERB repayments.

  • A consumer proposal or bankruptcy includes CRA debt such as back taxes and EI/CERB overpayments.
  • Combine all your unsecured debt into one manageable interest-free monthly payment.
  • A consumer proposal could reduce your debt by up to 80%!
Learn more about CRA debt
Scenario 2

I'm self-employed and owe taxes or other CRA debt.

  • Personal insolvency options can address certain CRA business‑related debts—like GST/HST arrears and CPP contributions—alongside income tax debt.
  • A consumer proposal can help reduce tax debt while protecting your assets.
Learn more about CRA debt and self-employment
Scenario 3

The CRA is taking collection action, and I need help.

  • Only a Licensed Insolvency Trustee can provide legal protection against collection activity, including actions from the CRA.
  • A free consultation can help you understand the impact on your assets, income, and—if applicable—your business.
Book a free consultation

Why do I owe money to the CRA?

After filing your tax return with the CRA, you may receive a refund, break even, or owe additional money. If you can’t pay what you owe by the deadline, the balance becomes income tax debt. The CRA may then begin accruing interest, charging penalties, or even taking collection actions. Common reasons for owing income tax debt include:

  • Having multiple sources of income
  • Your employer not withholding enough tax from your pay, or changing jobs during the year
  • Owing government benefit repayments (such as CERB or EI)
  • Being self-employed and not remitting enough tax
  • Withdrawing funds from your RRSP
  • Having unfiled tax returns from previous years

What if I can't pay my CRA tax debt?

The CRA has unique debt‑collection powers that go beyond those of most other creditors. Depending on the situation, the CRA may:

  • Keep money owed to you, such as tax refunds or certain benefits
  • Garnish your income
  • Register judgments against assets, including your home
  • In some cases, hold other people liable for your tax debt if you transferred assets or made gifts to them
Woman sitting in a chair with her head in her hands, experiencing financial stress over collection calls, past due bills, and high debt.

Frequently asked questions about tax debt.

Yes. CRA tax debt is considered unsecured debt and can be included in a consumer proposal or bankruptcy proceeding.

If the CRA has placed a lien on an asset to secure an unsecured debt, neither bankruptcy nor a consumer proposal will remove that lien or resolve the debt associated with it. In these situations, the only way the CRA lien is removed is if the amount of the lien is paid in full, or if the asset is sold and the lien is settled from the sale proceeds. A Licensed Insolvency Trustee can review the lien and explain your available options during a free consultation.

  • Consumer proposal: Generally, yes. The CRA may apply refunds or credits toward the debt you owe, but only for the year you file your proposal. Any future tax refunds remain yours.
  • Bankruptcy: Generally, no. Tax refunds for years up to and including the year of bankruptcy are used to pay your creditors. Any tax refunds you receive after your bankruptcy is complete are yours to keep.

Yes. While both a consumer proposal and bankruptcy can include CRA tax debt, they work differently.

  • Consumer proposal
    A consumer proposal allows you to repay your unsecured debts—often at a reduced, affordable amount—over a period of up to five years. CRA tax debt is typically considered unsecured and is treated like other unsecured debts. Once the proposal is filed, CRA collection actions and interest stop. Unlike bankruptcy, you generally keep your assets and future tax refunds.
  • Bankruptcy
    Bankruptcy can eliminate most unsecured debts, including CRA tax debt. Like a consumer proposal, it immediately stops CRA collection actions. However, bankruptcy may affect your assets, tax refunds, and certain government credits, depending on your situation and provincial regulations.

A Licensed Insolvency Trustee can help you compare both options and determine which one makes the most sense for your tax debt.

Yes. Filing a consumer proposal or bankruptcy through a Licensed Insolvency Trustee triggers a legal stay of proceedings, which immediately stops CRA collection actions. In addition to collection calls and notices, a stay of proceedings can stop wage garnishments and bank account freezes. Once you file a proposal or bankruptcy, the CRA must communicate through your trustee rather than contacting you directly.

Not necessarily—but you will need to file any outstanding tax returns as part of the process.

For both a consumer proposal and bankruptcy, the CRA generally expects all required tax returns to be filed so it can confirm exactly how much is owed. In many cases, you can start a consultation and even begin the process before everything is filed, with the understanding that any outstanding returns will be completed shortly afterward.

Don't just take our word for it.

We've helped others find relief from their CRA debt, and we can help you too!

I could not see a future without debt.

I had a great amount of stress before meeting with Marcia as the prior events made me feel alone and unresolved. Additionally, as money is still tight, I could not see a future without debt. She assured me she was part of a team which had solutions that were manageable for every situation and that they were there to help me navigate the unexplained assertions of CRA and collection agencies. She reviewed my documents and guided me without judgement in the most positive and encouraging manner. I feel after one session I have come away with a renewed vigor.

— Joan (Vancouver, BC)

No more sleepless nights trying to figure out how to pay off that overwhelming debt.

The only thing I regret is not calling them sooner. The professionalism of our agent was remarkable. After examining our financial situation, he made us quickly realize that proceeding with a proposal was the best thing to do in our situation. The amount of stress that was lifted off our backs was enormous. No more sleepless nights trying to figure out how to pay off that overwhelming debt. The phone calls from CRA and all our creditors ceased almost immediately. We are no longer afraid to answer the phone or opening the mailbox. I highly recommend the professionals at the Moncton offices of Grant Thornton.

— Dan (Moncton, NB)

Take the first step to debt freedom

Speak to one of our debt solutions professionals during a free, no-obligation consultation.

Book a free consultation

Looking for assurance, tax, and business advisory services? Visit Doane Grant Thornton LLP.

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