If a debtor owes Canada Revenue Agency (formerly Canada Customs & Revenue Agency and Revenue Canada) for outstanding personal income taxes or GST, these debts can be included in a Consumer Proposal. A Consumer Proposal is the only mechanism in Canada that can be used to settle CRA debts for less than the full amount owing.
Canada Revenue Agency (“CRA”) is amenable to receiving less than full payment through a Consumer Proposal, provided the debtor:
- has filed all of the prior income tax and GST returns,
- will file future income tax and GST returns on time and make payment of any outstanding balances at time of filing, and
- in the case of self-employed individuals, make arrangements for payment of installments of future taxes.