CRA Enforcement Action: Freezing Bank Accounts, Garnishing Wages, Seizing GST/QST Funds, and Shutting Down Business Cash Flow — What Every Canadian Business Owner Must Know (Montreal CPA Firm Guide)

When the Canada Revenue Agency decides to enforce, the consequences are immediate, severe, and often devastating. Most taxpayers believe CRA will first negotiate, call, or send gentle reminders. But once your file reaches the Collections stage, CRA can freeze your bank account, garnish wages, seize GST/QST refunds, intercept client payments, place liens on property, or even shut down your cash flow—without a court order.
This guide explains the full scope of CRA’s enforcement powers, why certain files are targeted, what immediate legal risks businesses face, and the exact steps required to protect yourself, stop enforcement, and regain financial stability.

Legal and Regulatory Framework

CRA’s authority comes from federal legislation including the Income Tax Act, the Excise Tax Act, and the Employment Insurance Act. These laws allow CRA to take money directly from banks, employers, clients, tenants, or payment processors.
Key legal principles include:
• CRA does not need a court order to seize funds.
• CRA can issue a Requirement to Pay to anyone who owes you money.
• CRA can freeze bank accounts, garnish wages, and redirect deposits instantly.
• Objections stop enforcement only for income tax—never for GST/QST or payroll.
• CRA may register the debt in Federal Court, giving it the power of a civil judgment.
• CRA can hold directors personally liable for GST/HST and payroll trust amounts.
• CRA can seize GST/QST refunds to offset any federal or provincial debt.

These laws give CRA far stronger powers than any bank, creditor, or collection agency.

Key Court Decisions

Courts have consistently upheld CRA’s broad powers, emphasizing four pillars:
• CRA can assume facts and taxpayers must disprove those assumptions.
• Financial hardship does not invalidate a Requirement to Pay.
• CRA enforcement cannot be appealed directly; only the underlying tax assessment can.
• Federal Court will rarely intervene unless CRA breaches procedural fairness.

Judges routinely confirm that enforcement is “administrative” rather than punitive, meaning CRA is not required to consider the taxpayer’s financial situation before acting.
This legal environment makes speed, documentation, and professional representation essential.

Why CRA Targets Certain Files

CRA uses internal risk scoring to determine which files require aggressive enforcement. Categories at highest risk include:
• unfiled GST/QST returns
• late payroll remittances
• unpaid GST/QST trust funds
• estimated assessments not challenged
• repeated late filings
• businesses in construction, e-commerce, trucking, restaurants, retail, and contracting
• real estate investors with unreported capital gains
• self-employed individuals with irregular reporting
• corporations with poor bookkeeping or missing records
• overdue audits, including net-worth calculations

Quebec and Ontario files involving GST/QST are targeted the fastest because these are trust amounts.

Comprehensive Analysis of CRA Enforcement Tools (4-Page Deep Expansion)

1. Bank Account Freezes

When CRA issues a Requirement to Pay to your bank:
• the bank must legally freeze the account
• all incoming deposits redirect to CRA
• cheques start bouncing
• suppliers stop shipping
• payroll becomes impossible
• business operations can collapse in days
The freeze remains until CRA issues a formal release.

2. Wage Garnishments

CRA may order employers to redirect up to 50 percent of wages. Self-employed individuals may face garnishment from clients, platforms, or contractors.

3. Accounts Receivable Seizures

CRA can order clients to send payments directly to CRA, bypassing the business entirely.
This often destroys cash flow and supplier relationships.

4. GST/QST Refund Seizures

CRA may intercept GST/QST refunds to apply against tax debts—even if the refund relates to a different reporting period or business.

5. Payment Processor Intercepts

CRA can issue RTPs to:
• Stripe
• PayPal
• Square
• Shopify
• Amazon
• Uber
• DoorDash
• Airbnb
• Booking.com

Digital businesses are increasingly targeted.

6. Federal Court Liens and Certificates

Once registered, CRA can:
• place liens on property
• seize assets
• force payment through refinancing
• pressure banks to call loans

These certificates are extremely difficult to remove without structured negotiation.

7. Director Liability

Corporation directors can become personally liable for:
• GST/HST trust amounts
• payroll source deductions
• penalties and interest
This is one of CRA’s most aggressive collections tools.

How CRA Decides to Enforce

Internal CRA collections systems evaluate:
• non-compliance patterns
• missed filings
• high debt relative to income
• perceived risk of tax evasion
• ignored CRA correspondence
• industry risk profile
• unremitted trust funds

Once your file is coded as high-risk, enforcement is automatic.

Immediate Risks to Businesses

A CRA enforcement action can create immediate operational interruption, including:
• frozen operating accounts
• inability to pay payroll (legal risk)
• supplier credit holds
• project delays
• loan defaults
• bounced cheques and NSF fees
• employee departures
• reputational damage
• cancelled contracts
• CRA escalating to seizures

Many businesses fail because their cash flow collapses before corrective action is taken.

Mackisen Strategy

Stopping CRA enforcement requires speed, precision, and complete documentation. Mackisen CPA has developed an advanced multi-stage defence protocol used in severe CRA collections cases across Quebec and Ontario.

Step 1 — Immediate CRA Intervention

We contact CRA Collections the same day to request:
• temporary freeze lift
• confirmation of exact balances
• identification of missing filings
• suspension of new enforcement
This prevents further damage.

Step 2 — Establish Legal Shield

We analyze whether to:
• file Notices of Objection
• request collections relief
• challenge incorrect assumptions
• submit Taxpayer Relief for penalties
• block enforcement based on dispute rights
We position your file legally before negotiation begins.

Step 3 — Rapid Filing and Correction

CRA will not negotiate long-term if your file is non-compliant.
We immediately complete:
• GST/QST filings
• payroll remittances
• T2/CO-17 corporate returns
• T1 personal filings
• adjustments for errors
• missing year-ends
• corrected input tax credits
Filing ensures CRA can no longer escalate based on “unknown risk.”

Step 4 — Cash Flow Capacity Analysis

CRA requires full disclosure to negotiate. Mackisen prepares:
• projected cash flow
• accounts receivable aging
• debt repayment structure
• payroll forecast
• supplier schedule
• operating costs
• rent, loans, and financing obligations
This determines a realistic payment plan that CRA can accept.

Step 5 — Negotiation and Resolution

We negotiate:
• full removal of freezes
• partial access to accounts
• structured payment plans
• weekly or monthly installments
• pause on enforcement
• penalty reduction
• time to refinance or reorganize

The goal is stability, compliance, and long-term protection.

Step 6 — Monitoring and Compliance Protection

Once the freeze is lifted, we maintain the file to prevent re-enforcement:
• monthly remittances
• GST/QST review
• payroll audits
• installment planning
• year-end tax planning
• CRA communication management

This is how businesses stay safe going forward.

Real Client Experience

A Quebec distribution company with 27 employees had its bank accounts frozen due to unremitted GST/QST and late returns. CRA also issued garnishments to two major clients. The business was on the verge of shutting down.
Mackisen intervened the same day, filed missing returns, identified substantial ITCs that reduced the balance, performed a cash flow analysis, and negotiated a conditional removal of the freeze.
The business returned to full operations within 72 hours.

Another client, a self-employed trucker, had his Stripe and PayPal accounts frozen. CRA seized all incoming payments. We filed an objection, prepared financial disclosure, secured a temporary lift, and structured a weekly plan that CRA accepted.

Common Questions

• Can CRA freeze my bank account without warning? Yes.
• Can CRA take all incoming payments? Yes.
• Can CRA intercept money from Stripe, Shopify, PayPal, Uber, or Amazon? Yes.
• Can CRA freeze personal and business accounts simultaneously? Yes.
• Does bankruptcy stop CRA? Not for GST/QST trust amounts.
• Can CRA freeze a joint account with my spouse? Yes.
• Do objections stop collections? Only for income tax, not GST/QST or payroll.
• Can CRA seize RRSPs or TFSAs? They cannot seize them directly, but withdrawals are captured.

Why Mackisen

With more than 35 years of combined CPA experience, Mackisen CPA Montreal helps businesses stay compliant while recovering the taxes they’re entitled to. Whether you’re filing your first GST/QST return or optimizing multi-year refunds, our expert team ensures precision, transparency, and protection from audit risk.