CRA tax debt can grow fast because of penalties and daily interest.
A consumer proposal is one of the only legal ways to reduce what you owe the Canada Revenue Agency. Most people save about 70% of their tax balance, stop all interest, and get full protection from collections.
This page explains how CRA consumer proposals work in simple, easy-to-read steps.
Many people think CRA tax debt cannot be reduced, but that is one of the biggest myths.
A consumer proposal is one of the only legal ways in Canada to cut your tax debt, stop interest, and create a single affordable payment. CRA accepts proposals because they return more money than bankruptcy, and because the process is fully regulated by the federal government.
You can include several types of CRA balances in one proposal, such as:
A proposal brings everything together into one clear, manageable solution, even if the debt has been growing for years.
CRA is strict with collections, but they are surprisingly practical when it comes to proposals.
They usually accept proposals because they receive more than they would in a bankruptcy, and because proposals allow them to recover funds in a controlled, predictable way. CRA often supports proposals when the offer:
This balanced approach is why consumer proposals have such a high approval rate with CRA.
A consumer proposal gives you immediate legal protection called a stay of proceedings, and this protection applies to CRA. Once your trustee files your proposal, CRA must stop all collection actions. This includes:
The stay is powerful because it prevents CRA from taking any further action while you reorganize your finances through the proposal.
CRA accepts realistic settlement amounts based on your income, household expenses, and what they would receive in a bankruptcy. Most people end up paying about 30% of their tax debt, spread out over three to five years, with no interest added. CRA focuses on:
Because the proposal removes interest and penalties, the total cost becomes far more manageable than trying to pay the full balance.
Yes. CRA requires that all missing tax returns be filed before they vote on your proposal. This ensures everyone is working with accurate numbers.
The trustee helps you:
Once everything is filed, CRA can properly review your offer and decide on approval.
They can, but it’s uncommon. CRA may request adjustments if the offer is too low or if your income suggests a higher payment is reasonable.
Even then, the change is often small — such as adding a few dollars per month or extending the proposal length. Trustees understand CRA’s internal guidelines, so they build a proposal that already aligns with what CRA typically accepts. This is why rejection is rare and most proposals pass on the first vote.
Almost all CRA balances can be included in your proposal. The main exceptions are:
Everything else — tax, interest, penalties, and HST — is treated as standard unsecured debt and can be fully included.
CRA interest can grow quickly and make the debt feel impossible to manage. A consumer proposal gives you breathing room by:
This stability allows you to rebuild your finances, make a realistic plan, and avoid the overwhelming pressure that CRA collections can create.
All unsecured debts, credit cards and unsecured loans can be applied to a consumer proposal, getting you completely debt free in 5 years or less!
This consumer proposal calculator shows an approximate of how much you could save.
If you’re feeling overwhelmed by debt and not sure where to start, the best thing you can do is talk to someone who understands.
Call now and speak directly with me — Kelly Dey — for clear, honest advice that’s tailored to your situation. There’s no pressure and no judgment. We’ll look at your options together and create a plan that helps you breathe again. Getting started is easier than you think, and one simple conversation can put you back in control of your money and your life.
Let’s take that first step today, call 905-721-7506.
A. Yes. CRA accepts consumer proposals every day because they return more money than bankruptcy and create a predictable repayment plan. CRA wants missing returns filed and a fair offer based on your income, but once those steps are complete, approval is very common.
Many people are surprised to learn that CRA is much more flexible with proposals than with regular payment arrangements.
A. All interest and penalties stop immediately the moment your trustee files the proposal. CRA can no longer add daily charges or late-filing penalties, which is why people often save such a large amount. This interest freeze helps your balance stop growing, makes your payments predictable, and allows you to finally gain control over a debt that may have been increasing for years.
A. Yes. CRA requires all past-due returns to be filed before they vote.
Your trustee helps you gather your documents, prepare the missing filings, and confirm your true balance before submitting your proposal. Once everything is filed correctly, CRA reviews your offer based on accurate numbers and typically votes on it quickly.
A. No. The proposal gives you immediate legal protection called a stay of proceedings. This forces CRA to stop wage garnishments, unfreeze bank accounts, and end all direct collection activity. As long as your proposal remains in good standing, CRA cannot restart these actions.
A. The reduction depends on your income, expenses, and what CRA would receive in a bankruptcy.
Most people settle their CRA debt for about 30% of the balance, spread out over three to five years. Because the offer is based on your real budget—not the full amount owed—it becomes far more affordable than trying to pay CRA directly.
Insolvency Trustee – Kelly Dey
If you’re feeling weighed down by money or debt issues, give me a call at 905-721-7506 and lets just have conversation.
Table of Contents
Jonathan M.
4 days ago
★★★★★
I owed the CRA far more than I could ever repay, and the interest kept climbing every single day. The proposal stopped the garnishment immediately, froze all the penalties, and reduced my balance by more than half. I finally feel like I have a clear path forward instead of constantly worrying about my paycheque.
Marissa K.
1 week ago
★★★★★
CRA had frozen my bank account, and I was terrified to even open my online banking. The consumer proposal released the freeze, stopped all collections, and brought my tax bill down to something I could realistically pay. I learned that CRA does accept proposals, and it was nothing like the horror stories I had heard.
Derek P.
2 weeks ago
★★★★★
I had several years of unfiled taxes and didn’t know where to start. They helped me file everything, figure out what I truly owed, and put together a proposal the CRA accepted right away. My monthly payment is low, interest is gone, and I finally feel organized and back in control of my finances.
Sheryl A.
3 weeks ago
★★★★★
I always assumed CRA would never agree to reduce tax debt, but the proposal proved me wrong. My balance was overwhelming before, but the settlement amount was a fraction of what I owed. Knowing that the interest and penalties stopped the day it was filed took an incredible weight off my shoulders.
Tomas L.
1 month ago
★★★★★
CRA collections were calling constantly, and the stress was affecting my work and sleep. The proposal ended all the calls, protected my wages, and turned a huge tax debt into a manageable monthly payment. I wish I had done this sooner, because I now have a plan I can actually follow.
Rise Above Your Debt!
Call 905-721-7506
