CRA Collections Timeline: From Assessment to Garnishment (2026)

CRA does not chase you forever at the same intensity. Collection follows a predictable escalation. Understanding the timeline tells you exactly how much time you have before CRA takes action — and when the window to act on your own terms closes. The short version: you have roughly 90-180 days from assessment before CRA starts garnishing wages or freezing accounts. But CRA can move faster, and there is no guarantee of the full window.

The CRA Collection Escalation Timeline

Day 1-30: Assessment and Initial Contact

Your tax return is assessed. The Notice of Assessment shows a balance owing. Interest at 7% begins accruing the day after the payment deadline.

Within the first 30 days, CRA typically:

• Sends the Notice of Assessment showing the balance
• May attempt phone contact to discuss payment
• Applies any refunds or credits you are owed against the balance automatically
• Notes your file for follow-up if no payment is received

Your window: This is the widest opening. Set up a payment arrangement or contact a Licensed Insolvency Trustee for a free assessment. Acting now gives you the most options and the most control.

Day 30-90: Written Demands and Escalation

If you have not paid or contacted CRA, the file moves to Collections. CRA sends formal written demands specifying:

• The exact amount owed including accumulated interest
• A deadline to pay or make arrangements
• A warning that legal collection action may follow

Phone calls from CRA Collections increase in frequency. Collectors attempt to negotiate a payment arrangement over the phone. They will ask detailed questions about your income, expenses, assets, and ability to pay.

Your window: Still open but narrowing. A consumer proposal filed during this period prevents escalation to garnishment. CRA has not yet issued a Requirement to Pay, so your wages and bank account are still untouched.

Dominic from Sudbury received his Notice of Assessment showing $22,000 owing in February. He ignored it. In April, CRA Collections called twice per week. He avoided the calls. By May, he received a formal demand letter with a 30-day warning. He called a LIT on day 85 and filed a proposal on day 91 — just before CRA issued the Requirement to Pay.

Day 90-180: Legal Warning Period

CRA sends a final legal warning — typically a letter stating that if payment is not received within 30 days, CRA will exercise its legal collection powers. This is not a bluff.

During this period, CRA may:

• Offset all government payments to you (GST/HST credits, Canada Child Benefit, refunds)
• Prepare a Requirement to Pay for your employer or bank
• Register a lien against your property at the land registry

Your window: Closing fast. If you file a consumer proposal during this period, you prevent the Requirement to Pay from being issued. Once CRA issues it, the damage is immediate — your employer sees it, your bank freezes funds, and recovery takes days even after filing.

Day 180+: Active Legal Collection

CRA issues one or more of its collection instruments:

Wage garnishment: A Requirement to Pay goes to your employer. They must withhold up to 50% of your net wages and send it to CRA. There is no court hearing. Your employer finds out you owe CRA money. The garnishment continues until the debt is paid or you file a consumer proposal/bankruptcy.

Bank account freeze: A Requirement to Pay goes to your bank. Your account is frozen immediately. Your entire balance — including any incoming deposits — is seized and sent to CRA. Your rent cheque, mortgage payment, and pre-authorized debits bounce.

Property lien: CRA registers a certificate at the land registry. Your home cannot be sold or refinanced without paying CRA first. CRA does not typically force a sale, but the lien prevents you from accessing your equity.

Client garnishment (self-employed): For freelancers and contractors, CRA sends Requirements to your clients. Your clients must send your invoice payments to CRA instead of to you.

Why CRA Moves Faster Than Other Creditors

A credit card company that wants to garnish your wages must:

1. Send demand letters (30-60 days)
2. File a lawsuit (30-60 days)
3. Serve you and wait for response (21-30 days)
4. Obtain a default judgment (30-60 days)
5. Apply for a garnishment order (14-30 days)

Total: 4-8 months minimum. Requires court involvement.

CRA must:

1. Send a Requirement to Pay to your employer or bank

Total: One letter. No court involvement. Done.

This is why CRA debt is the most urgent type of debt in Canada. Every other creditor gives you months of legal process before they can touch your money. CRA gives you a letter.

The No-Statute-of-Limitations Reality

Private creditors in Canada face limitation periods of 2-6 years depending on province. After that, they cannot sue you. The debt still exists but is legally unenforceable.

CRA has no limitation period. A tax debt from 2010 is just as collectible as a tax debt from last month. CRA can and does pursue old debts. Interest at 7% has been compounding the entire time. A $10,000 debt from 10 years ago has accumulated roughly $7,000 in interest — before penalties.

There is no “waiting it out” with CRA debt. The balance grows. The collection powers remain. The only exits are payment in full, Taxpayer Relief (penalties/interest only), consumer proposal, or bankruptcy.

How to Stop CRA Collection at Any Stage

Before garnishment (Days 1-180): Maximum options. Payment arrangement for small debts. Taxpayer Relief for penalties and interest. Consumer proposal for debts over $10,000 or combined with other debt.

During active garnishment: Consumer proposal or bankruptcy. These are the only two options that create a legal stay of proceedings. A payment arrangement does not stop an active garnishment. Taxpayer Relief does not stop an active garnishment. Only the BIA stops CRA.

Sonia from London, Ontario discovered her bank account was frozen on a Tuesday morning. $4,200 gone — including her rent payment. CRA had issued a Requirement to Pay for $19,000 in tax debt she had been ignoring for 8 months. She called a Licensed Insolvency Trustee Tuesday afternoon. Filed a consumer proposal Wednesday morning. The stay of proceedings reached CRA by Thursday. Her bank released the remaining funds Friday. Total time from freeze to resolution: 4 days.

Don’t wait for the Requirement to Pay. The timeline is predictable. Act before CRA does.

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