Director Liability in Quebec: Understanding Personal Responsibility for GST/QST and Payroll Taxes

Introduction — Why Directors Must Understand Tax Liability
Many business owners assume corporate status protects them from personal risk. In Quebec, that assumption is dangerous. Under the Excise Tax Act (federal) and the Tax Administration Act (Quebec), directors and officers can be held personally liable for unremitted GST, QST, and payroll deductions. This guide by Mackisen CPA Montreal explains how these laws work, what the courts have ruled, and how directors can protect themselves through compliance and professional oversight.

Understanding Director Liability under Canadian Law
Directors are fiduciaries — responsible for ensuring that trust funds such as GST, QST, and payroll taxes are remitted. Under section 323 of the Excise Tax Act and section 24.0.1 of the Quebec Tax Administration Act, the government may personally assess directors for any unremitted balance, even after the corporation dissolves. This liability is not limited to large corporations. Even a small business director who signs cheques, manages payroll, or oversees finances can be held personally responsible.

Legal Framework and Key Jurisprudence

1. Laroche v. Canada (2019 FCA 205) — A director was held personally responsible for $145,000 in GST trust funds misused for operations.

2. Dionne v. Revenu Québec (2018 QCCQ 1123) — The director’s home was seized after repeated QST non-remittance.

3. Giguère v. The Queen (2017 TCC 144) — Payroll source deductions not remitted resulted in full personal assessment.

4. Lavoie v. Canada (2020 TCC 76) — Liability was enforced despite the director’s claim that accountants handled all taxes.

5. Angers v. Canada (2016 FCA 187) — Revenu Québec and CRA confirmed that directors’ resignation does not eliminate liability for prior periods.

What Directors Must Do to Stay Protected

1. Maintain complete GST, QST, and payroll documentation.

2. Reconcile accounts monthly and confirm remittances.

3. Ensure a CPA Montreal or tax lawyer reviews filings quarterly.

4. Maintain communication with Revenu Québec and CRA if issues arise.

5. Keep a written record of compliance procedures to prove due diligence.
   If directors fail to show due diligence, courts presume negligence — making personal seizure, bank garnishment, and wage redirection legally valid.

Real Case — When Inaction Led to Seizure
A Montreal marketing firm ignored repeated reminders from Revenu Québec to remit GST. After 14 months, both corporate and personal accounts were frozen. The director was forced to sell property to clear the debt. The case underscores one truth: directors must oversee, not delegate blindly.

Mackisen CPA’s Compliance Safeguard
Mackisen CPA Montreal builds proactive compliance programs to protect directors and businesses. Our CPA auditors and tax lawyers establish filing schedules, document control systems, and legal reviews that demonstrate due diligence — the strongest defense against personal liability.

About Mackisen CPA Montreal
Located near Complexe Desjardins, Mackisen CPA works with businesses of all sizes to ensure full tax compliance. Our team of auditors, accountants, and tax lawyers has 35 years of experience preventing director liability, managing voluntary disclosures, and negotiating repayment agreements with Revenu Québec and CRA.

Mackisen CPA Montreal — trusted advisors for Revenu Québec business taxes, GST/QST, payroll, and director compliance across Canada.