What is a CRA Requirement to Pay and How Can You Stop It?

Understanding the CRA Requirement to Pay and How to Counter It

The Canadian Revenue Agency (CRA) has a potent arsenal of tools at its disposal to recover unpaid tax debts. One of the most formidable among these is a legal notice known as the Requirement to Pay or RTP. This document can significantly impact your financial life if you have tax arrears. This article aims to provide an in-depth understanding of what a CRA Requirement to Pay is and how one can stop it.

Decoding the CRA Requirement to Pay

A CRA Requirement to Pay is a legal notice issued by the CRA to a third party who might owe you money currently or in the future. This third party could be your bank, employer, or a business client. The notice instructs them to redirect the funds they owe you directly to the CRA.

The CRA resorts to this measure when a taxpayer has not cleared their tax debts and has not entered into acceptable payment arrangements to repay taxes due. In effect, an RTP acts as a CRA garnishment order, but it is issued to a third party to ensure the money they owe you ends up with the CRA.

Key Points for Taxpayers

  • The CRA can issue an RTP without requiring a court order.
  • RTPs can be issued for any arrears owed to the CRA, including income tax, HST, unpaid withholding taxes, and CPP or employment insurance overpayments.
  • An RTP can target a variety of payments, including wages, business receivables, independent contractor earnings, rental income, RRSP and pension income, and more.
  • Any recipient of an RTP is legally obligated to comply with its directive.
  • The CRA will send you a copy of the RTP.
  • Your employer is not obliged to inform you before they start garnishing your wages.
  • Your bank will freeze your bank account immediately upon receipt of an RTP.

Actions to Take If an RTP Has Been Issued

If the CRA has issued an RTP concerning taxes you owe, it is advisable to contact the CRA immediately and arrange payment plans to catch up on any tax arrears. If you have not already done so, you should also file your tax return.

If the CRA is confident that you will honor this agreement, they may voluntarily lift the RTP. A tax lawyer may be able to assist you in negotiating this repayment arrangement and resolve any tax disputes regarding the amount owed.

However, if you are unable to pay back taxes, the only options available to eliminate outstanding tax arrears are to file bankruptcy or make a consumer proposal to your creditors. To proceed with either of these options, you need to contact a Licensed Insolvency Trustee.

The Role of Licensed Insolvency Trustee

A tax lawyer or accountant cannot reduce the principal amount of taxes legitimately owed to the CRA. However, bankruptcy can eliminate tax debts and stop a CRA garnishment order or notice to pay. You can also propose a legal repayment plan to the CRA through a Licensed Insolvency Trustee.

If you face a tax debt problem, it’s always best to consult a Licensed Insolvency Trustee before the CRA initiates any legal collection action. For advice on your options, you should contact a trustee to book a free, no-obligation consultation.

Consequences of Ignoring a CRA Requirement to Pay

Ignoring a CRA Requirement to Pay can lead to severe consequences. Your bank accounts may be frozen, your wages may be garnished, and any future income may be redirected to the CRA. Therefore, it is crucial to take immediate action if you receive a Requirement to Pay notice from the CRA.


Understanding the CRA Requirement to Pay and knowing how to counter it can help you navigate the choppy waters of tax arrears. Remember, ignoring such a notice is not an option. Consult with a Licensed Insolvency Trustee to explore your options, make a plan, and regain control of your financial life.

Find Your Personal Debt Relief Solution

Licensed Insolvency Trustees are here to help. Get a free assessment of your options.

Discuss options to get out of debt with a trained & licensed debt relief professional.