Section 3 – Introduction to the Canada Revenue Agency

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COLLECTIONS

COLLECTIONS OVERVIEW

The Canada Revenue Agency's (CRA) Collections Program:

• collects accounts receivable for all taxes, levies, duties, and other accounts administered by the CRA, including amounts withheld in trust on behalf of the Crown;
• prevents and/or deters taxpayer non‑compliance and ensures early resolution of accounts prior to entry into more resource intensive collection workflows through the use of automated operations and remittance strategies; and
• provides collections services to other federal departments and provincial governments (including, but not limited to, defaulted Canada Student Loans, Employment Insurance overpayments, and Canada Pension Plan overpayments).

Collection Outcomes

• 90% of taxpayers pay their taxes on time without intervention
• $52.5 billion in  tax debt was resolved in 2014-2015
• $37.9 billion in outstanding tax debt in 2014-2015
• 4 million taxpayers owing various types of tax debt

Collections Overview

• The Canada Revenue Agency is committed to responsible enforcement in order to preserve the integrity of Canada's tax base and to protect the interests of the Crown.
• The CRA's collection policies seek to resolve issues in a mutually satisfactory way. Taxpayers are encouraged to contact us and work with us to create suitable payment arrangements based on their ability to pay. 
• The CRA makes every effort to reach a mutually acceptable payment arrangement before proceeding with garnishment or other forms of legal action to satisfy the debt, such as seizure of properties and assets. 
• The CRA is sensitive to cases of hardship. Taxpayer Relief provisions are used wherever possible to provide eligible taxpayers with relief of interest and penalties.
• Responsible stewardship of the CRA debt management portfolio means:
  • Maximizing recoveries.
  • Writing off unrecoverable accounts when appropriate.

MANAGING TAX DEBT

• The Collections Program is addressing the growth of the tax debt through its transformation agenda; incorporating enhanced business intelligence and analytics, and through the use of risk-based approaches:

WRITE-OFFS

• An uncollectible debt is an amount that the CRA is unable to collect for a number of reasons, such as:
  • collection avenues have been exhausted;
  • the debt cannot be located; or
  • the debtor does not have the ability to pay.
• Under specific legal requirements, uncollectible debts can be written off to remove them from the CRA's inventory, under the authority of the Financial Administration Act.
• The CRA has multiple delegated authority levels to approve debt write-offs. 
• Writing off a debt does not forgive or extinguish the legal right of the CRA to collect the debt, nor does it release the debtor from the obligation to pay.

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