What if I can’t pay CRA on time?
File anyway — the late-filing penalty is the expensive part. Then arrange payment: CRA negotiates schedules, but only with businesses that filed.
The most expensive mistake is hiding. Late-filing penalties are charged on top of what you owe; late payment alone accrues interest but no filing penalty. So the first move is always: file on time even if you cannot pay.
Then arrange the payment
CRA routinely sets up payment arrangements — a schedule you can actually keep, arranged through My Business Account or their collections line. Interest at the prescribed rate keeps running, but arrangements stop the escalation: no legal action while you keep the schedule.
Know the priority order
Not all CRA debts are equal. Payroll source deductions and HST are trust funds — directors can be personally liable, and CRA pursues them hardest. Corporate income tax is corporate debt. If cash is short, trust amounts get paid first, every time.
The structural fix
Owners rarely can’t pay — they didn’t know the number early enough to plan for it. Books that are current, with tax visibly set aside as you earn, turn CRA deadlines from emergencies into line items.
This is general information, not tax advice for your situation. Book a call and a Canadian accountant will give you the answer for your business.
Common questions
Will CRA negotiate the amount I owe?
CRA negotiates schedules, not the tax itself. Penalty and interest relief exists in genuine hardship cases through taxpayer relief provisions, but the underlying tax stands. An accountant can tell you whether a relief application is realistic.
Can CRA freeze my bank account?
Yes, for unpaid debts without a payment arrangement — garnishments and account freezes are standard collection tools, used more aggressively for trust-fund debts. An active arrangement you keep to is the protection.