CRA Collections Limitation Period: What Restarts the 10 Years
A small payment sent to show good faith is, under the Income Tax Act, an acknowledgement of the debt. If it arrives before the CRA collections limitation period ends, that period starts again from that day, and the ten years run afresh. For a reader counting on the clock rather than on paying, that gesture is the expensive one.
The clock starts 90 days after the notice, not on the due day
Under ITA s.222(4), the limitation period begins on “the day that is 90 days after the day on which the last one of those notices is sent or served” and ends, “subject to subsection (8)”, on the day 10 years later. Section 225.1(1.1)(c) uses the same 90 days for the collection-commencement day.
Interest does not wait. Under s.161(1) it runs on the unpaid excess from the balance-due day “for the period during which that excess is outstanding”, and under s.248(11) that interest “shall be compounded daily”. CRA’s announcement of the interest rates for the fourth calendar quarter says the rates “will be in effect from October 1, 2026 to December 31, 2026” and that “The interest rate charged on overdue taxes, Canada Pension Plan contributions, and employment insurance premiums will be 7%.” Rates reset quarterly, so we use 7% throughout and hold it constant. Every multi-year figure below is a scenario at today’s rate, not a forecast.
Here is a $10,000 balance owing for the 2026 tax year, with the notice date assumed for illustration. Data as of 2026-11-07.
| Step | Date or figure |
|---|---|
| Balance-due day, 2026 tax year | 30 April 2027 |
| Notice of assessment sent (illustrative) | 15 May 2027 |
| Collection-commencement day, s.225.1(1.1)(c) | 13 August 2027 |
| Limitation period ends, s.222(4)(b) | 13 August 2037 |
| Days interest runs before the clock starts | 105 |
| Interest over those 105 days on $10,000 | $203.39 |
| Tax plus arrears interest at clock end, 7% held constant | $20,557.55 |
A balance doubles inside the ten years
At 7% compounded daily, held constant, a balance first exceeds twice its size on day 3,615 of accrual from the balance-due day, which is 9.90 years. On the dates in the table that falls on 23 March 2037, inside the ten-year period with 143 days to spare. This is the same arithmetic as daily compounding in a portfolio, running against you. Someone who waits owes roughly twice the starting balance for the final stretch and is exposed to garnishment and liens the whole way.
Your own dates are worth working out rather than guessing at. For the year you are counting, find the date on the most recent notice of assessment or reassessment for that debt, since s.222(4) runs from “the last one of those notices”, and count 90 days forward from it. A reassessment resets that start date: one issued in year six begins a fresh period 90 days later, and the ten years run from there. CRA states the same rule as “the 91st day after” the notice, which lines up with the statute on our reading if the notice day itself is counted as day one. Ten years from that day is the end date, unless something has restarted it, in which case the only date that matters is the most recent restart. Ten years from that one. Each assessment carries its own period, so a reader with four years of balances is running four clocks, not one.
What restarts the ten years
Section 222(5) restarts the period “on any day, before it would otherwise end” on which the taxpayer acknowledges the debt, the Minister commences an action to collect it, or the Minister assesses another person in respect of it under s.159(3), s.160(2) or paragraph 227(10)(a). Under s.222(6)(c), a payment on account of the debt is an acknowledgement, and it operates through s.222(5)(a).
That makes a payment arrangement itself a restart. CRA’s Arrange to pay your debt over time says: “To start your payment arrangement, you need to make your first payment towards your debt.” The restart is the price of the arrangement. A reader who intends to clear the balance is not harmed by a clock they never meant to outlast.
CRA’s own page, How long a debt can be collected by the CRA, lists the rest: a written acknowledgment of debt, a letter proposing a payment arrangement, offering security, a written request for a reassessment, a notice of objection, an appeal, or merely asking whether you can make pre-authorized debit payments. CRA lists an objection under both restarting and extending the period, noting that it extends “only for tax debts subject to collection restrictions”. CRA’s own actions restart it too, among them a garnishment or set-off, certifying the debt in the Federal Court, and seizing assets.
Two details come from s.222(6) and (7). A written acknowledgement counts “whether or not a promise to pay can be inferred from the acknowledgement and whether or not it contains a refusal to pay,” so a letter saying you owe the money and cannot pay restarts the ten years. A payment counts even where it is “a purported payment by way of a negotiable instrument that is dishonoured”, so a cheque that bounces still restarts the ten years. And an acknowledgement by your agent or legal representative has the same effect, so a letter from an accountant acting for you counts too.
A token payment late in the clock
Take the example above and suppose a payment is made on 10 August 2036, nine years in and before the period would otherwise end. The period that would have ended 13 August 2037 now ends 10 August 2046. That is 3,284 more days, nine more years in which garnishment, certification and seizure are available, and the size of the payment makes no difference to that. At 7% held constant, the balance at the new end date is $38,589.34, against $20,557.55 at the original one.
What the end of the ten years does, and does not, do
What the end of the period actually buys is narrower than it looks. Section 222(3) says the Minister “may not commence an action to collect a tax debt after the end of the limitation period”, and that is the whole of it. CRA puts the rest plainly: “Usually we can’t take any other action to collect your debt once the limitation period ends. However, your debt remains and you can make voluntary payments.” The collection power expires. The liability does not.
Note the verb. Section 222(3) bars the Minister from commencing an action, and CRA’s own wording is that it usually cannot take any “other action”. Neither says anything about a step already taken. A reader with a lien already registered should read that alongside what CRA says about liens, which is that in most cases it removes one “when the debt is paid”, not when a clock runs out. On our reading the expiry of the period stops new collection action rather than unwinding what is already in place.
Within that, the boundary matters. CRA: “Any voluntary payments you make after the limitation period ends should not restart it.” The page names two exceptions, a voluntary payment on a Canada Student Loan or Canada Apprentice Loan, and an acknowledgement of a COVID-19 individual benefit debt. And for one debt the advice reverses: “For EI debt, do not make any payments after the limitation period expires.”
Both the length and the starting point depend on the debt. GST/HST remittance debt runs 10 years from the day after the notice, with no 90-day delay. Payroll debt runs 6 years from the day after the notice, EI overpayments 6 years from the day the overpayment happens, and CPP and OAS have no limitation period at all. The 90-day rule above is the individual and corporate tax one, not a general rule.
Leaving the country does not run the clock down either. Section 222(8)(c) adds back every day a taxpayer resident here at the start of the period spends as a non-resident, and s.222(8)(d) does the same for any day collection is barred under the Bankruptcy and Insolvency Act, the Companies’ Creditors Arrangement Act or the Farm Debt Mediation Act. An insolvency filing pauses the clock rather than beating it.
What the 90-day shield covers, and what it does not
Until the collection-commencement day, s.225.1(1) bars six things: court proceedings, certifying the amount under section 223, the three kinds of requirement to pay in s.224(1), s.224(1.1) and s.224.3(1), and seizure under s.225(1). The shield is narrower than it looks. Section 225.1(6) excludes amounts required to be deducted or withheld, and CRA says that where “your business owes a payroll or GST/HST remittance debt, we may begin legal actions right after you are notified of your debt.” A payroll debtor has no 90 days.
Several things sit outside it. Interest under s.161(1) keeps compounding daily. Set-off under s.164(2) is not barred: the Minister may apply a refund or repayment to the other liability and “notify the taxpayer of that action”, and nothing in the subsection requires that notice to come first. And the shield can be lifted entirely. Where CRA decides there is a risk of not collecting the debt while it is still under collections restrictions, it can apply to the Federal Court or a provincial superior court for a jeopardy order, which in CRA’s words “allows the CRA to take immediate legal actions to collect the debt.”
Section 222(1) defines an “action” to include anything done by the Minister under s.164(2). On our reading, together with s.222(5)(b), a set-off is an action that restarts the ten years, so CRA taking a credit restarts the clock without you doing anything. CRA’s own list names applying a refund or credit as a restarting action.
The objection trade
Filing a notice of objection extends the shield. Under s.225.1(2), once an objection is served the Minister cannot take those actions until 90 days after notice that the assessment was confirmed or varied, and under s.222(8) every one of those shielded days is added to the end of the limitation period. Do not let that deter a valid objection: an objection can eliminate the assessment itself, which is worth more than any number of clock days.
Collection in practice is a letter, then a judgment
Under s.224(1), where the Minister “has knowledge or suspects that a person is, or will be within one year, liable to make a payment to” the debtor, the Minister can require in writing that the person pay the Receiver General instead. CRA can send one to an employer, a bank, a spouse or another government department. No court order is involved. The section is a letter.
A lien or seizure takes more, and it starts with certification. In CRA’s words, “Before we can place a lien on or seize your assets, we must legally certify the amount you owe by getting a provincial judgement or a certificate from the Federal Court. This makes your debt a matter of public record.” Under s.223(3), once registered, the certificate “has the same effect, and all proceedings may be taken thereon, as if the certificate were a judgment obtained in the Court.” Certification turns a tax balance into the operational equivalent of a Federal Court judgment, and under s.223(4) all reasonable costs and charges of registering it and of proceedings to collect are recoverable as if included in the amount certified.
A lien on a house or car “establishes our priority as a creditor when an asset is sold. It means your debt will be automatically paid with the funds from the sale, before you receive any proceeds.” If CRA seizes and sells, any bailiff costs come out of the proceeds, and “You will still have to pay any remaining debt.”
Putting the house in a spouse’s name does not escape it. Where the debt already existed in the year of the transfer or earlier, s.160(1) makes the transferee “jointly and severally, or solidarily, liable” with the transferor, capped at the lesser of the transferor’s liability and the amount by which the property’s value exceeded what the transferee paid for it.
Before legal action CRA will “generally” attempt a verbal warning by phone and send one written warning letter, and that warning “is valid for 180 days. The CRA can start legal action at any time during this period even if the balance changes.” CRA sets this out on If you don’t pay your debt.
Routes that beat waiting
Relief from the interest
Interest is what doubles the debt, so the first question is whether any of it can be removed. On CRA’s cancel or waive penalties and interest page: “When events beyond your control prevent you from meeting your tax obligations, the CRA may grant relief of penalties and interest.” Note what that covers. Penalties and interest can go; the tax itself is not cancelled by this route. It is discretionary and slow, and CRA says on the same page that “the current average processing time is approximately 16 months”, which on a balance compounding daily is itself a cost. We have set out how the ten-calendar-year relief window works.
A payment arrangement
CRA’s collections hub offers “deferring a payment to a later date, making a payment arrangement and other options.” Work out what you can afford first: CRA publishes a monthly income and expense worksheet to “determine what you can afford to pay on a regular basis”. Payments can then be scheduled as pre-authorized debits in your CRA account, or set up by phone, and CRA’s automated TeleArrangement line handles personal income tax debt.
Two things an arrangement does not do. Interest keeps running: s.161(1) charges it “for the period during which that excess is outstanding”, and paying by instalments does not stop that. And CRA keeps taking credits, saying on the same page that “Even if you have a payment arrangement and are making payments, we may use some benefits and other credit payments you receive to pay your debt.” If a set-off is itself a restart, as we read it above, then for anyone who files and is owed something back the clock was likely to be restarted by CRA regardless.
The conditions are strict: you “must continue to make payments on the agreed upon dates,” file all future returns on time, and if you pay less than you agreed without changing the arrangement first, CRA “may proceed with legal actions to collect what you owe.” The order matters. Call and change the arrangement before you underpay, not after.
One protection survives all of this. CRA’s offset page says it may automatically apply a tax refund and CRA credits other than child benefits to an individual tax debt. The payment it lists as not applied automatically: “Child benefits: federal, provincial, and territorial.”
If the next question is whether to clear the balance with borrowed money, we measured what borrowing to pay a CRA balance actually costs. At month-end August 2026, of the six categories the Bank of Canada tracks for chartered banks’ rates on outstanding balances, only a line of credit secured on a home at 3.90% and an uninsured residential mortgage at 4.20% came in under CRA’s 7.25% effective rate once daily compounding is applied.
The clock is real, and so are the ways out
The ten years are real, the restarts are real, and CRA applying a credit restarts the clock without you doing anything. The useful response is not to count on the clock but to pick a route: ask for relief where events beyond your control are the cause, set up an arrangement with the restart understood, and take advice on insolvency where the balance is genuinely beyond reach. Put questions about your own situation to the CRA or a qualified professional.
Figures are illustrative scenarios at 7% held constant. The 15 May 2027 notice date is an assumption, and rates reset quarterly. Statute as consolidated on Justice Laws, CRA pages as of 2026-11-07.
Disclaimer: The content on bestcanadianstocks.ca is for informational and entertainment purposes only and does not constitute financial advice. Past performance is not indicative of future results. Always consult a qualified financial advisor before making investment decisions. The collections limitation period, its start, its restart and its extension come from the Income Tax Act as consolidated on Justice Laws: s.222(1) defining an action to include anything done under s.164(2), s.222(4) starting the period 90 days after the notice of assessment is sent and ending it 10 years later, s.222(5) and s.222(6) on restart and what counts as an acknowledgement, s.222(7) on an agent or legal representative, and s.222(8) adding shielded days back. The collection restrictions are s.225.1(1), whose six live paragraphs are (a) through (g) with (e) repealed, s.225.1(1.1)(c) fixing the collection-commencement day at 90 days after the notice of assessment is sent, and s.225.1(2) on an objection. Garnishment is s.224(1), certification and its recoverable costs are s.223(2) to s.223(5), and set-off is s.164(2). CRA’s own statements come from six of its pages, each named in the body: How long a debt can be collected by the CRA dated September 18, 2026, If you don’t pay your debt dated September 18, 2026, Garnishing your income and accounts dated October 24, 2024, Putting a lien on or seizing your assets dated March 15, 2024, How we automatically apply credits and refunds to your debt dated September 18, 2026, and Arrange to pay your debt over time dated October 27, 2026. The prescribed rate CRA charges on overdue income tax is 7% for the fourth quarter of 2026 from CRA’s own announcement, and the same 7% for the first quarter of 2027 is this site’s own derivation published November 5, 2026 and labelled as ours. Interest is charged under s.161(1) and compounded daily under s.248(11). Every dollar figure, day count and date in the article and in the chart comes from a single engine that the chart script imports, so the chart cannot disagree with the article. Its compounding convention is fixed by a control test reproducing to the cent the $362.50 and $256.34 this site published on November 5, 2026, a second control test on the effective annual rate of 7.2501%, two control tests on the date arithmetic, and a bracket test confirming the ten-year daily-compounded result sits between simple and continuous compounding. The $10,000 balance, the 15 May 2027 notice of assessment date and every multi-year figure are a scenario at a rate held constant at today’s 7%, labelled as such wherever they appear, and never a forecast: Regulation 4301 resets the rate every quarter.
