Subsection 224(1) - Garnishment
Cases
Wilson v. Canada (Justice), 2012 DTC 5109 [at 7113], 2012 FC 280
The taxpayer's husband had a tax debt. The Minister issued a garnishment order on an account held jointly by the taxpayer and her husband. ...
Canada Trustco Mortgage Co. v. Canada, 2011 DTC 5112 [at 5940], 2011 SCC 36, [2011] 2 S.C.R. 635
Mr. McLeod, who owed taxes, held two accounts with the appellant ("Trustco") - an account he held jointly with another person, and a trust account...
The Queen v. National Trustco, 98 DTC 6409, [1998] 4 CTC 26 (FCA)
The respondent was liable under s. 224(4) for its failure to respond to s. 224(1) demands (made both before and after the maturity of the GIC in...
Bank of Montreal v. MNR, 94 DTC 6309 (FCTD)
The Supreme Court of Canada ultimately reversed the courts below in finding that profits earned by a terminated employee of the appellant belonged...
464734 Ontario Inc. v. The Queen, 90 DTC 6206, [1990] 1 CTC 296 (FCTD)
One of the appellants ("Ontario") was awarded $41,000 in an action which it had brought against another corporation ("Konvey"). As a result of a...
DeConinck v. Royal Trust Corp. of Canada, [1989] 1 CTC 179 (N.B.C.A.)
A demand by Revenue Canada on the trustee of an RRSP was not sufficient authority for the trustee to collapse the RRSP and pay the new proceeds to...
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| Tax Topics - Income Tax Act - Section 146 - Subsection 146(1) - Retirement Savings Plan | 27 |
Ontario Development Corp. v. The Queen, 89 DTC 5134, [1989] 1 CTC 319 (FCTD)
The taxpayer was subrogated (as guarantor) to a bank which had registered an assignment by a customer ("Kitkraft") of book debts on June 7, 1977....
Re Morgan Trust Co. and Dellelce, 85 DTC 5492 (S.C.O.)
Since a tax debtor had not taken any steps to withdraw properties from his RRSP, the trustee of the RRSP had no moneys which were immediately...
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|---|---|---|
| Tax Topics - Other Legislation/Constitution - Ontario - Execution Act - Section 18 | 35 |
The Royal Bank of Canada v. The Queen, 84 DTC 6439, [1984] CTC 573 (FCTD), aff'd 86 DTC 6390, [1986] 2 CTC 211 (FCA)
A bank, which perfected an assignment to it of book debts by registering pursuant to the Personnel Property Security Act (Manitoba) prior to a s....
Walkers' Auto and Body Supplies (1972) Ltd., [1984] 4 WWR 661 (Sask QB)
S.224(1) only creates the right in the Crown to demand payment of a debt and does not give the Crown a priority. "The crown simply acquires a debt...
Re Zurich Insurance Co., 84 DTC 6232, [1984] CTC 639 (Ont CA)
After a fire damaged the insured premises of a licensee under the Excise Tax Act and the licensee defaulted under a loan agreement with a bank...
Bain v. Rosen, 84 DTC 6212, [1984] CTC 589 (S.C.O.)
It was indicated that the 70% exemption pursuant to s. 7(1) of the Wages Act (Ontario) is calculated before any deduction is made of the amount of...
Re Marks & Spencer Canada, Inc., 84 DTC 6037 (Nfld. S.C.)
Since s. 224 is a garnishee provision that only binds or attaches the interest of the taxpayer, it does not apply to book debts that were assigned...
Sorenson v. MNR, 82 DTC 6246 (FCA)
There is no requirement that the Minister file a certificate under s. 223 before he may exercise the power given to him by s. 224 to require a...
Stephens Estate v. The Queen, 82 DTC 6132, [1982] CTC 138 (FCA)
As a demand on third parties pursuant to s. 224 does not involve an interference with corporeal property, a wrongful demand cannot give rise to an...
CIBC v. The Queen, 81 DTC 5345, [1981] CTC 435 (FCTD)
Book debts which are included in the security granted under s. 178 of the Bank Act by a taxpayer to a bank become the property of the bank from...
Hutterian Brethren Church v. Prov. Treas. (Alta), 80 DTC 6228 (Alta. C.A.)
"[S]ervice of a demand should not be construed as altering generally the terms of a bona fide contract entered into between a judgment debtor and...
Bank of Montreal v. The Queen, 80 DTC 6024, [1980] CTC 68 (FCTD)
An assignee of book debts ranks behind the Crown to the extent that the debtor pays the Crown pursuant to a s. 224(1) demand before the debtor has...
Qureshi v. MNR, 79 DTC 5161, [1979] CTC 216 (FCTD)
The Minister's decision to attempt collection by way of garnishment is purely an administrative decision that is not subject to review under...
In re Gero, 79 DTC 5228, [1979] CTC 309 (FCTD)
The funds standing to the credit of the annuitant in his registered retirement savings plans were not sheltered from seizure by the Crown under a...
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| Tax Topics - Income Tax Act - Section 146 - Subsection 146(1) - Retirement Savings Plan | the funds in an RRSP were seizable | 32 |
See Also
2405124 Ontario Ltd. v. The King, 2023 TCC 57 (Informal Procedure)
The appellant (240 Ontario) had a real estate purchase and sale business. It received a Requirement to Pay (the Requirement) issued pursuant to s....
De Vries v The Queen, 2018 TCC 166
After the sale to the taxpayers (its shareholders) of its assets for cash proceeds equal to those assets’ fair market value, the taxpayers’...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 160 - Subsection 160(1) | if requirement to pay assessment had been valid, it would have flowed through with a dividend | 302 |
| Tax Topics - General Concepts - Effective Date | oral agreement to postpone changed terms of loan | 181 |
3087-8847 Quebec Inc. v. The Queen, 2007 TCC 302
In finding that a corporation which was obligated under its shareholder loan account with its shareholder for failure to pay under a s. 224(1)...
Manufacturers Life Insurance Co. v. MNR, 91 DTC 1055, [1991] 2 CTC 2171 (TCC)
A whole life insurance policy registered as an RRSP was not garnishable under s. 224(1) given the absence of evidence that the owner had requested...
Thomas v. MNR, 90 DTC 1806, [1990] 2 CTC 2315 (TCC)
Because the dissolution of a corporation rendered it incapable of making a payment, a garnishment by the Minister under s. 224(1) demanding...
Thames Bandag & Tire Ltd. v. The Queen, 88 DTC 6417, [1988] 2 CTC 203 (FCTD)
After a secured creditor ("Bandag") of a company ("Olympic") had made a demand, following the default of Olympic, on the debtors of Olympic to pay...
Prowest Fabrications Ltd. v. The Queen (1984), 50 C.B.R. (N.S.) 102 (Sask QB)
A receiver-manager of the property of the debtor was appointed by the debenture-holders and a court after the debenture-holders had received a...
Administrative Policy
How to process a garnishment from the CRA, CRA Webpage, 15 March 2024
RTP extends to amounts owing or where money is held for the tax debtor
What garnishments are: RTPs, ERTPs, and DTPs
When we are unable to collect...
CRA National Collection Manual 2016
Registered retirement savings plans (RRSP)
Garnishment will not collapse an RRSP but it might freeze the account and recover funds issued out of...
25 February 2016 CBA Roundtable, Q. 4
CRA indicated that it no longer respects provincial garnishment limitations (apparently for ITA purposes as well as GST/HST purposes) except that...
| Other locations for this summary | |
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| Tax Topics - Income Tax Act - Section 224 - Subsection 224(1) | provincial garnishment limits not followed |
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| Tax Topics - Excise Tax Act - Section 317 - Subsection 317(3) | tax debtor still required to remit GST/HST on garnished receivable/provincial garnishment limits respected only in Quebec | 828 |
15 March 2013 Internal T.I. 2012-0459281I7 - Exigibility of Registered Education Savings Plans
In finding that the funds in an RESP can be seized pursuant to s. 224(1), the Directorate stated:
Notwithstanding that the funds are purportedly...
24 April 2012 Internal T.I. 2012-0441141I7 - Effect of A Requirement To Pay on Shareholder Loan
The tax debtor is the sole shareholder of a corporation who does not have a personal bank account, and is using the corporation's bank account to...
IC 98-1 "Collection Policies"
87 C.R. - Q.75
Arrangements as an alternative to issuing Requirements to Pay may be entered into provided that such arrangements expedite the collection of...
Subsection 224(1.2) - Garnishment
Cases
Bank of Montreal v. Deloitte & Touche Inc., 97 DTC 5538 (Sask. C.A.)
A trustee of bankruptcy, in its representative capacity, was liable with respect to a demand for payment of a receivable made 40 days after the...
Alberta (Treasury Branches) v. M.N.R.; Toronto-Dominion Bank v. M.N.R., 96 DTC 6245, [1996] 1 S.C.R. 963, [1996] 1 CTC 395
The Minister had priority under s. 224(1.2) of the Act and s. 317 of the Excise Tax Act over lending institutions that had taken general...
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| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 154 |
The Queen v. TransGas Ltd., 93 DTC 5391, [1993] 1 CTC 280 (Sask. C.A.), briefly aff'd (1994), 120 DLR (4th) 715, [1994] 3 S.C.R. 753
At a time a construction company ("Mid-Plains") abandoned work on a contract for a Crown agency ("TransGas"), TransGas, in addition to holding...
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| Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 91 - Subsection 91(3) | 120 |
Canadian Asbestos Services Ltd. v. The Queen, 93 DTC 5001, [1993] 1 CTC 48 (Ont. Ct. - G.D.)
S.224(1.2) was part of the pith and substance of federal tax legislation and, accordingly, was not ultra vires.
Pembina on the Red Development Corp. Ltd. v. Triman Industries Ltd., 92 DTC 6174, [1992] 1 CTC 133 (Man. C.A.)
In finding that the pre-1993 version of s. 224(1.2) of the Act was not ultra vires (before following Lloyds Bank), Scott C.J.M. stated (p....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Constitution Act, 1867 - Section 91 - Subsection 91(3) | 73 | |
| Tax Topics - Statutory Interpretation - Resolving Ambiguity | 81 |
Toronto-Dominion Bank v. The Queen, 90 DTC 6639, [1990] 2 CTC 542 (FCTD)
A general assignment of accounts and debts made by a corporation to the plaintiff bank took priority over a subsequent requirement to pay made...
Air Atonabee Ltd. v. The Queen, 90 DTC 6573 (S.C.O.)
S.224(1.2) permits the Minister of National Revenue to issue the request for payment without any regard to the provisions of the Bankruptcy Act.
Royal Bank of Canada v. Saskatchewan Power Corp., 90 DTC 6330, [1990] 2 CTC 285 (Sask QB)
Wright, J. refused to follow the decision of the Alberta Court of Appeal in Lloyds Bank v. International Warranty Co. Ltd., and found that s....
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Federal Courts Act - Subsection 17(1) | 32 | |
| Tax Topics - General Concepts - Stare Decisis | 57 |
Lloyd's Bank Canada v. International Warranty Co. (1989), 60 DLR (4th) 272 (Alta. C.A.)
A company ("IW") had made an assignment of book debts to the td Bank. After ceasing business operations, it paid salaries to its employees without...
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|---|---|---|
| Tax Topics - Income Tax Act - Section 227 - Subsection 227(10.2) | 71 | |
| Tax Topics - Statutory Interpretation - Vested Rights | 75 |
Administrative Policy
Pending Default of a Proposal under the BIA where the Canada Revenue Agency is a majority creditor: April 23, 2020 OSB Webpage
S. 60(1.1) of the Bankruptcy and Insolvency Act effectively provides that unless Her Majesty consents, any court-approved proposal must provide...
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|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Bankruptcy and Insolvency Act - Section 62.1 - Paragraph 62.1(b) - Subparagraph 62.1(b)(ii) | 176 |
Articles
Robertson, "Tax Collection and Insolvency: An Update", 1993 Conference Report, c. 8
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|---|---|---|
| Tax Topics - Income Tax Act - Section 227 - Subsection 227(5) | 0 |
Skulski, "Tax Collection in Recessionary Times", 1992 Conference Report, c.8
Account of the agreement negotiated between Revenue Canada and the Office of the Superintendent of Bankruptcy.
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|---|---|---|
| Tax Topics - Income Tax Act - Section 220 - Subsection 220(3.1) | 0 | |
| Tax Topics - Income Tax Act - Section 227 - Subsection 227(5) | 16 |
Heinrich, "Judicial Response to Director's Liability and Crown Garnishment Priorities", 1991 British Columbia Tax Conference, Volume 1.
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|---|---|---|
| Tax Topics - Income Tax Act - Section 227.1 - Subsection 227.1(3) | 0 |
Brown, "Bankruptcy and Income Tax: A Revenue Canada Perspective", 1990 Conference Report, c. 18.
Finance
28 July 1999 Letter to Douglas Schmitt: Explanation of why the deemed trust should rank ahead of fixed charges even where there were no...
Subsection 224(1.3) - Definitions
Security Interest
Cases
Caisse populaire Desjardins de l'Est de Drummond v. Canada, 2009 DTC 5951, 2009 SCC 29, [2009] 2 S.C.R. 94
A customer ("Canvrac") made a deposit of $200,000 with the Caisse and entered into a "Term Savings Agreement" under which Canvrac agreed that its...
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| Tax Topics - Income Tax Act - Section 224 - Subsection 224(1.4) | 78 |
Subsection 224(1.4) - Garnishment
Cases
Caisse populaire Desjardins de l'Est de Drummond v. Canada, 2009 DTC 5951, 2009 SCC 29, [2009] 2 S.C.R. 94
After finding that the Caisse had a security interest in a term deposit of its customer (Canvrac) with the Caisse, the Court found that the...
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 224 - Subsection 224(1.3) - Security Interest | 174 |