Section 222


Doig v. Canada, 2011 DTC5064 [at 5725], 2011 FC 371

The taxpayer sought a declaration that he had paid taxes between the years 1971 and 1984. Zinn J. found that the limitations period in s. 222 only applies to actions commenced by the Minister, and not to the taxpayer. Instead, the general limitations period in s. 32 of the Crown Liability and Proceedings Act applies. The taxpayer was beyond this limitation period, so his application was dismissed.

Zinn J. found in the alternative that the doctrine of laches would bar the taxpayer's application. The taxpayer had allowed far too long a delay before bringing his application, knowing full well of the tax debt claimed by the CRA.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Laches 103

Boucher v. Canada, 2004 DTC 6085, 2004 FCA 47

The Tax Court lacked jurisdiction to consider the allegation of the taxpayer that an amount received by her from her employer was net of employee source deductions, so that she had already paid the tax in question. Such an allegation could be asserted by her in the Federal Court when the Minister attempted to recover the sums he considered to be payable.

Markevich v. Canada, 2001 DTC 5305, 2001 FCA 144

Rothstein J.A. rejected the contention of the Minister that the Act was a complete code which provided for no limitation period in respect of collection procedures. Instead, Parliament's intention was that section 32 of the Crown Liability and Proceedings Act was to apply when Acts of Parliament (such as the Income Tax Act) were silent on the issue of limitations. Accordingly, the Minister was precluded by s. 3(5) of the Limitation Act (B.C.) from instituting collection proceedings against the taxpayer more than six year after the indebtedness of the taxpayer for federal and provincial income tax became collectible (i.e., six years after the expiry of the 90-day period referred to s. 225.1(1)).

Locations of other summaries Wordcount
Tax Topics - Statutory Interpretation - Absurdities 106

Frankel v. The Queen, 84 DTC 6220, [1984] CTC 259 (FCTD)

In a meeting between the individual taxpayer and representatives of the Department, it was tentatively agreed that a global amount of $122,000 owed by the individual and 4 companies which he owned or ran, would be retired by him paying $1,000 per month. It was held that in the circumstances the choice of the Department as to which of the 5 accounts it applied the monthly payments bound the taxpayers.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Evidence 51

DiLorenzo v. The Queen, 82 DTC 6085, [1982] CTC 151 (FCTD)

Where two individuals, who carried on a construction business in partnership with each other as well as through 9 incorporated companies, knew that payments being made by them to the Receiver General respecting arrears of taxes of the partnership and the companies were being credited to the companies' accounts, they were later precluded from arguing that the payments should have been applied by the Department instead to reduce the amount of the debt owing by the partnership to the Receiver General.

Administrative Policy

91 C.R. - Q.63

RCT will not hold collection action in abeyance based upon anticipated non-capital losses to be incurred at some future time.

91 C.R. - Q.62

Discussion of when collection actually will be temporarily delayed in light of the financial situation of the tax debtor.

Subsection 222(1)

Tax debt


Bechthold Resources Ltd. v. MNR, 86 DTC 6065, [1986] 1 CTC 195 (FCTD)

tax liability arose when designation made and before assessment

The taxpayer made a designation on January 17, 1985 under former s. 194(4) of $30 million in respect of scientific research tax credits, which resulted in a Part VIII tax liability of $15 million, for which the taxpayer was assessed under Part VIII on March 26, 1985. In addressing an argument that the assessment was a nullity so that a requirement to pay issued to the taxpayer also was a nullity, Addy, J. stated (at p. 6069):

Liability to pay tax or to pay any amount on account of tax does not depend on any Notice of Assessment. It has long been firmly established that liability is created by statute and exists regardless of whether there has been an assessment by the Minister. ...

The principle was DTC 6373 (F.C.A.)... .

The Queen v. Sands Motor Hotel Ltd., 84 DTC 6464, [1984] CTC 612 (Sask QB)

taxpayer insolvent in light of unassessed tax liability

It was held that under the Act, a debt of the taxpayer to the Crown comes into existence the moment that taxable income is earned, notwithstanding that assessment is not made by the Minister until considerably later. The taxpayer corporation accordingly was insolvent for purposes of section 40 of the Business Corporations Act (Saskatchewan) by virtue of paying dividends equal to all its remaining net assets, including proceeds of disposition of land which it had reported as a capital transaction, notwithstanding that the taxpayer was not reassessed on the basis that the disposition had been on capital account until after the payment of the dividends.

The Queen v. Simard-Beaudry, 71 DTC 5511 (FCTD)

liability for tax arose before assessment

The taxpayer agreed in Montreal on December 15, 1964 to acquire assets of another company for consideration which included the assumption of all corporate income taxes which had been incurred prior to January 1, 1965. The Minister subsequently reassessed the vendor for corporate income taxes on August 14, 1969 and then called upon the taxpayer to discharge this debt. In rejecting the taxpayer’s position that it was not liable for such taxes as they had not yet been assessed at the time of its assumption under the purchase agreement , Noël J stated (at p. 5515):

As to his second argument, namely that the debt arising from re-assessment of the taxpayer dates only from the time that the taxpayer is assessed, and that it did not, accordingly, exist at the time the agreement was made, it seems to me that the answer to this is that the general scheme of the Income Tax Act indicates that the taxpayer's debt is created by his taxable income, not by an assessment or re-assessment. In fact, the taxpayer's liability results from the Act and not from the assessment. In principle, the debt comes into existence the moment the income is earned, and even if the assessment is made one or more years after the taxable income is earned, the debt is supposed to originate at that point.


Colin Campbell, "Liability for the Tax on SIFT Partnerships: A Rejoinder", 2011 Canadian Tax Journal, Vol 59, p. 709:

"Liability" v. "debt" (pp. 716-717)

The distinction so clearly made by Jackett P in Terra Nova Properties [67 DTC 5064] between liability for tax and amounts actually payable (and therefore debts due to the Crown) 26 was unfortunately muddied somewhat in the decision of Noël J in The Queen v. Simard-Beaudry… .

With respect, the references to "debt" in this passage are consistent with the prior jurisprudence only if they are read as references to "liability." Because the agreement in question referred to "liability for income and corporation taxes" and not to "debts" in respect of taxes, Noël J's references to "debt" are in obiter and reflect an unfortunate confusion in terminology.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 152 - Subsection 152(1) 39

Subsection 222(2)


Marie-Andrée Beaudry, Dean Kraus, "Selected Income Tax Considerations in the Court-Approved Debt Restructurings and Liquidations", 2015 Annual CTF Conference paper

Stay of assessment in CCAA proceedings (p. 13:38)

In…Girard, the Québec Court of Appeal concluded that a notice of assessment or reassessment constituted a proceeding and was therefore subject to the stay of proceedings under the BIA. The court determined that a notice of assessment or reassessment issued while the stay is in effect will not have the legal effect conferred on it under the ITA unless the tax authorities obtain the leave of the court under section 69.4 of the BIA. [fn 132: …2014 QCCA 1922] …While in Girard the stay of proceedings was issued under section 69.3 of the BIA, the language in that provision is quite similar to the stay provision in section 11.02 of the CCAA. ...

Words and Phrases

Subsection 222(3) - No actions after limitation period

Administrative Policy

23 June 2014 Internal T.I. 2013-0501521I7 - Collection Limitation Period

limitation period does not extinguish tax debt

An office which acted as the trustee for various individuals who have not been bankrupt asked whether debts that are "written off" by CRA must still be paid. CRA stated:

There are no provisions…. that permit the Minister to write-off a debt. …Notwithstanding that a debt cannot be written off, section 222… imposes a limitation period after which [subject to extension under s. 222(8)] the CRA may not take collection actions to enforce the debt. … After the end of the limitation period, the CRA may not take collection actions; however, the debt remains payable by the taxpayer and the CRA will accept payments on account of the debt.

Subsection 222(4) - Limitation period


Collins v. Canada (Customs and Revenue Agency), 2005 FC 1431

The 2004 amendment to s. 222(4)(a)(ii) was effective to overrule Markevich v. The Queen, so that tax debts that became prescribed due to a limitation period prior to the adoption of Bill C30 nonetheless could be enforced by the CCRA under the Act.