GOVERNMENT COLLECTION POLICIES: When You Owe the Government Money Other than Taxes

Canadian GOVERNMENT COLLECTION POLICYCRA collects amounts owed for not just tax programs, but also for other government programs, including, for example:

  • defaulted Canada Student Loan;
  • Employment Insurance overpayment;
  • Canada Pension Plan overpayment;
  • Old Age Security overpayment;
  • Labour Program receivable; and
  • other Employment and Social Development Canada (ESDC) programs.

On November 1, 2014, CRA provided a general overview of the Government Programs Collection Policy for individuals, businesses and organizations that owe money other than taxes to the Crown.

They noted that amounts owed to the Government of Canada are payable in full without delay although, if a taxpayer cannot pay the total amount or the minimum payment owing on their statement of account immediately, they could contact the Revenue Collections and Client Services Division with respect to making payment arrangements.

CRA also noted that if amounts are not paid voluntarily, CRA may take legal action to:

  • recover amounts from any benefits or other applicable credits they may receive from ESDC;
  • recover from credits the Crown may owe to the taxpayer such as income tax refunds and/or GST/HST credits;
  • garnishee income sources and/or bank accounts; or
  • use any other means under any applicable statutes or law to collect an amount owing.

Garnishment action allows the Government to intercept funds payable to the taxpayer by a third party, such as a taxpayer’s employer, bank, or other sources of income.

Similarly, if any other Federal Government department owes the taxpayer money, a statutory set-off to that department may be made to have all, or part, of that money sent to the department to which the taxpayer is indebted.

Action Item: If you are struggling to pay your Government debts, contact us sooner, rather than later as options may be available.

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