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Ottawa, March 4, 2004
2004-017

Minister of Finance Proposes Amendments to Change the Limitation Period for the Collection of Federal Tax Debts

Related document:

• Backgrounder.

Minister of Finance Ralph Goodale announced today his intention to propose amendments to the Income Tax Act and other acts that will establish a 10-year limitation period for the collection of federal tax debts.

The proposed new limitation period responds to a Supreme Court of Canada decision that the collection of federal income tax debts was subject to the 6-year limitation period set out in the Crown Liability and Proceedings Act. Previously, no limitation period was provided for in the Income Tax Act.

"The Government agrees that a limitation period for the collection of taxes is needed. We believe a 10-year limitation period is appropriate and recognizes the special reporting and assessment system in federal tax acts," Minister Goodale explained. "It provides a reasonable amount of time for the Canada Revenue Agency and taxpayers to deal with tax debts."

In the case of taxes that became payable before today’s date but remain unpaid, the limitation period will end 10 years from today.

The proposed amendments also ensure that taxes that were collected beyond any limitation period will not be reimbursed to those taxpayers.

"Allowing reimbursement of past collections would give late payers a windfall benefit at the expense of the vast majority of Canadians who pay their taxes on time," Minister Goodale noted.

To prevent such a result, the proposed amendments will preclude all claims against the Government of Canada in respect of tax debts collected before today.

The attached backgrounder provides a more detailed description of the planned amendments and lists the statutes that are proposed to be amended.

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