Secton 314

1. Is the amount of effort or documentation that a CRA collections officer is required to undertake in obtaining security a relevant factor in determining whether the amount or form of security is satisfactory for purposes of s. 314(2)?
2. What factors will the Minister consider in determining whether security to be taken pursuant to subsection 314(2) is satisfactory regarding:
   
   1. the amount of security; and
   2. the form of the security? Are there any forms of security, or types of assets to be pledged, that are categorically unsatisfactory to the Minister?

CRA responded:

(a) …[T] he amount of effort or documentation required to undertake in obtaining security from a tax debtor, pursuant to subsection 314(2) of the ETA, is not usually a relevant factor in determining if the security is satisfactory … .

(b) (i) The amount of security should be equivalent to the tax assessment amount (tax, interest, and penalties). …

(ii) The satisfactory form of security should consist of negotiable security that has the following hallmarks:

(A) liquid;

(B) equivalent, or near equivalent, to cash; and

(C) exercisable upon demand without defense or counterclaim.

Such acceptable negotiable security … is the Bank Letter of Guarantee or Irrevocable Standby Letter of Credit.

However, if a form of security is being proposed, the Minister will review the proposed security during the course of administering the ETA, and determine whether it is advisable to accept the proposed security.