Underused Housing Tax Act (S.C. 2022, c. 5, s. 10)

Marginal note:Garnishment

• 73 (1) If the Minister has knowledge or suspects that a person is, or will be within one year, liable to make a payment to another person that is liable to pay an amount under this Act (in this section referred to as a “debtor”), the Minister may, by notice in writing, require the person to pay without delay, if the money is immediately payable, and in any other case, as and when the money is payable, the money otherwise payable to the debtor in whole or in part to the Receiver General on account of the debtor’s liability under this Act.

• Marginal note:Garnishment of loans or advances

  (2) Without limiting the generality of subsection (1), if the Minister has knowledge or suspects that within 90 days

  • (a) a bank, credit union, trust company or other similar person (in this section referred to as an “institution”) will loan or advance money to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by, a debtor that is indebted to the institution and that has granted security in respect of the indebtedness, or

  • (b) a person, other than an institution, will loan or advance money to, or make a payment on behalf of, a debtor that the Minister knows or suspects

    • (i) is employed by, or is engaged in providing services or property to, that person or was or will be, within 90 days, so employed or engaged, or

    • (ii) if that person is a corporation, is not dealing at arm’s length with that person,

  the Minister may, by notice in writing, require the institution or person, as the case may be, to pay in whole or in part to the Receiver General on account of the debtor’s liability under this Act the money that would otherwise be so loaned, advanced or paid.

• Marginal note:Effect of receipt

  (3) A receipt issued by the Minister for money paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment.

• Marginal note:Effect of requirement

  (4) If the Minister has, under this section, required a person to pay to the Receiver General, on account of the liability under this Act of a debtor, money otherwise payable by the person to the debtor as interest, rent, remuneration, a dividend, an annuity or other periodic payment, the requirement applies to all such payments to be made by the person to the debtor until the liability under this Act is satisfied and operates to require payments to the Receiver General out of each such payment of any amount that is stipulated by the Minister in a notice in writing.

• Marginal note:Failure to comply

  (5) Every person that fails to comply with a requirement under subsection (1) or (4) is liable to pay to Her Majesty in right of Canada an amount equal to the amount that the person was required under that subsection to pay to the Receiver General.

• Marginal note:Failure to comply

  (6) Every institution or person that fails to comply with a requirement under subsection (2) with respect to money to be loaned, advanced or paid is liable to pay to Her Majesty in right of Canada an amount equal to the lesser of

  • (a) the total of money so loaned, advanced or paid, and

  • (b) the amount that the institution or person was required under that subsection to pay to the Receiver General.

• Marginal note:Assessment

  (7) The Minister may assess any person for any amount payable under this section by the person to the Receiver General and, if the Minister sends a notice of assessment, sections 15 and 33 to 46 apply with any modifications that the circumstances require.

• Marginal note:Time limit

  (8) An assessment of an amount payable under this section by a person to the Receiver General is not to be made more than four years after the notice from the Minister requiring the payment was received by the person.

• Marginal note:Effect of payment as required

  (9) If an amount that would otherwise have been advanced, loaned or paid to or on behalf of a debtor is paid by a person to the Receiver General in accordance with a notice from the Minister issued under this section or with an assessment under subsection (7), the person is deemed for all purposes to have advanced, loaned or paid the amount to or on behalf of the debtor.

Marginal note:Recovery by deduction or set-off

74 If a person is indebted to Her Majesty in right of Canada under this Act, the Minister may require the retention by way of deduction or set-off of any amount that the Minister may specify out of any amount that may be or become payable to that person by Her Majesty in right of Canada.

Marginal note:Acquisition of debtor’s property

75 For the purpose of collecting debts owed by a person to Her Majesty in right of Canada under this Act, the Minister may purchase or otherwise acquire any interest in, or for civil law any right in, the person’s property that the Minister is given a right to acquire in legal proceedings or under a court order or that is offered for sale or redemption and may dispose of any interest or right so acquired in any manner that the Minister considers reasonable.

Marginal note:Money seized from debtor

• 76 (1) If the Minister has knowledge or suspects that a person is holding money that was seized by a police officer in the course of administering or enforcing the criminal law of Canada from another person that is liable to pay any amount under this Act (in this section referred to as the “debtor”) and that is restorable to the debtor, the Minister may in writing require the person to turn over the money otherwise restorable to the debtor, in whole or in part, to the Receiver General on account of the debtor’s liability under this Act.

• Marginal note:Receipt of Minister

  (2) A receipt issued by the Minister for money turned over as required under this section is a good and sufficient discharge of the requirement to restore the money to the debtor to the extent of the amount so turned over.

Marginal note:Seizure

• 77 (1) If a person fails to pay an amount as required under this Act, the Minister may in writing give 30 days notice to the person, addressed to their latest known address, of the Minister’s intention to direct that the person’s things be seized and disposed of. If the person fails to make the payment before the expiry of the 30 days, the Minister may issue a certificate of the failure and direct that the person’s things be seized.

• Marginal note:Disposition

  (2) Things that have been seized under subsection (1) must be kept for 10 days at the expense and risk of the person. If the person does not pay the amount due together with all expenses within the 10 days, the Minister may dispose of the things in a manner the Minister considers appropriate in the circumstances.

• Marginal note:Proceeds of disposition

  (3) Any surplus resulting from a disposition of a person’s things, after deduction of the amount owing and all expenses, must be paid or returned to the person.

• Marginal note:Exemptions from seizure

  (4) Any thing of any person in default that would be exempt from seizure under a writ of execution issued by a superior court of the province in which the seizure is made is exempt from seizure under this section.

Marginal note:Person leaving Canada or defaulting

• 78 (1) If the Minister suspects that a person has left or is about to leave Canada, the Minister may, before the day otherwise fixed for payment, by notice to the person served personally or sent by confirmed delivery service addressed to their latest known address, demand payment of any amount for which the person is liable under this Act or would be so liable if the time for payment had arrived, and the amount must be paid without delay despite any other provision of this Act.

• Marginal note:Seizure

  (2) If a person fails to pay an amount required under subsection (1), the Minister may direct that things of the person be seized, and subsections 77(2) to (4) apply, with any modifications that the circumstances require.

Marginal note:Authorization to assess and take collection action

• 79 (1) Despite section 70, if, on ex parte application by the Minister relating to a calendar year made on or after the last day of the calendar year, a judge is satisfied that there are reasonable grounds to believe that tax for the calendar year will be required to be paid to the Receiver General under subsection 6(3) and that the collection of all or any part of that tax would be jeopardized by a delay in its collection, the judge must, on any terms that the judge considers reasonable in the circumstances, authorize the Minister to, without delay,

  • (a) assess the tax for the calendar year, determined in accordance with subsection (2); and

  • (b) take any of the actions described in sections 72 to 77 in respect of that amount.

• Marginal note:Effect of authorization

  (2) For the purposes of this Act, if an authorization is granted under subsection (1) in respect of an application relating to a calendar year of a person

  • (a) the particular day on or before which the person is required to file a return under section 7 for the calendar year is deemed to be the day on which a judge hears the application for the authorization;

  • (b) the tax for the calendar year is deemed to have become due to the Receiver General on the particular day; and

  • (c) sections 23, 47, 49, 51 and 52 apply as if the tax for the calendar year were not required to be paid, and the return for that calendar year were not required to be filed, until the last day of the period described in subsection (8).

• Marginal note:Affidavits

  (3) Statements contained in an affidavit filed in the context of an application under this section may be based on belief in which case it must include the grounds for that belief.

• Marginal note:Service of authorization and notice of assessment

  (4) An authorization granted under subsection (1) in respect of a person must be served by the Minister on the person within 72 hours after it is granted, except if the judge orders the authorization to be served at some other time specified in the authorization, and a notice of assessment for the calendar year must be served on the person together with the authorization.

• Marginal note:How service effected

  (5) For the purpose of subsection (4), service on a person must be effected by personal service on the person or service in accordance with the directions of a judge.

• Marginal note:Application to judge for direction

  (6) If service cannot reasonably be effected as and when required under this section, the Minister may, as soon as practicable, apply to a judge for further direction.

• Marginal note:Review of authorization

  (7) If a judge of a court has granted an authorization under subsection (1) in respect of a person, the person may, on six clear days notice to the Deputy Attorney General of Canada, apply to a judge of the court to review the authorization.

• Marginal note:Limitation period for review application

  (8) An application by a person under subsection (7) to review an authorization must be made

  • (a) within 30 days after the day on which the authorization was served on the person in accordance with this section; or

  • (b) within any further time that a judge may allow, on being satisfied that the application was made as soon as practicable.

• Marginal note:Hearing in camera

  (9) An application by a person under subsection (7) may, on the application of the person, be heard in private, if the person establishes to the satisfaction of the judge that the circumstances of the case justify proceedings heard in private.

• Marginal note:Disposition of application

  (10) On an application under subsection (7), the judge must determine the question summarily and may confirm, vary or set aside the authorization and make any other order that the judge considers appropriate.

• Marginal note:Effect of setting aside authorization

  (11) If an authorization is set aside under subsection (10), subsection (2) does not apply in respect of the authorization and any assessment made as a result of the authorization is deemed to be void.

• Marginal note:Directions

  (12) If any question arises as to the course to be followed in connection with anything done or being done under this section and there is no relevant direction in this section, a judge may give any direction with regard to the course to be followed that, in the opinion of the judge, is appropriate.

• Marginal note:No appeal from review order

  (13) No appeal lies from an order of a judge made under subsection (10).

Marginal note:Definition of transaction

• 80 (0.1) In this section, transaction includes an arrangement or event.

• Marginal note:Tax liability — transfers not at arm’s length

  (1) If at any time a person transfers property, either directly or indirectly, by means of a trust or by any other means, to

  • (a) the transferor’s spouse or common-law partner or an individual that has since become the transferor’s spouse or common-law partner,

  • (b) an individual that was under 18 years of age, or

  • (c) another person with whom the transferor was not dealing at arm’s length,

  the transferee and transferor are jointly and severally, or solidarily, liable to pay under this Act an amount equal to the lesser of

  • (d) the amount determined by the formula

    A – B

    where

    A

    is the amount, if any, by which the fair market value of the property at that time exceeds the fair market value at that time of the consideration given by the transferee for the transfer of the property, and

    B

    is the amount, if any, by which the amount assessed the transferee under subsection 325(2) of the Excise Tax Act, paragraph 97.44(1)(b) of the Customs Act, subsection 160(2) of the Income Tax Act, subsection 297(3) of the Excise Act, 2001 or subsection 161(3) of the Greenhouse Gas Pollution Pricing Act in respect of the property exceeds the amount paid by the transferor in respect of the amount so assessed, and

  • (e) the total of all amounts each of which is

    • (i) an amount that the transferor is liable to pay under this Act for the calendar year of the transferor that includes that time or any preceding calendar year of the transferor, or

    • (ii) interest or penalty for which the transferor is liable as of that time,

  but nothing in this subsection limits the liability of the transferor under this Act.

• Marginal note:Fair market value of undivided interest

  (2) For the purpose of this section, the fair market value at any time of an undivided interest in a property, expressed as a proportionate interest in that property, is, subject to subsection (5), deemed to be equal to the same proportion of the fair market value of that property at that time.

• Marginal note:Assessment

  (3) The Minister may at any time assess a transferee in respect of any amount payable by reason of this section, and the provisions of sections 15 and 33 to 46 apply, with any modifications that the circumstances require.

• Marginal note:Rules applicable

  (4) If a transferor and transferee have, by reason of subsection (1), become jointly and severally, or solidarily, liable in respect of part or all of the liability of the transferor under this Act, the following rules apply:

  • (a) a payment by the transferee on account of the transferee’s liability must, to the extent of the payment, discharge their liability; and

  • (b) a payment by the transferor on account of the transferor’s liability only discharges the transferee’s liability to the extent that the payment operates to reduce the transferor’s liability to an amount less than the amount in respect of which the transferee was, by subsection (1), made jointly and severally, or solidarily, liable.

• Marginal note:Transfers to spouse or common-law partner

  (5) Despite subsection (1), if at any time an individual transfers property to the individual’s spouse or common-law partner under a decree, order or judgment of a competent tribunal or under a written separation agreement and, at that time, the individual and the individual’s spouse or common-law partner were separated and living apart as a result of the breakdown of their marriage or common-law partnership as defined in subsection 248(1) of the Income Tax Act, for the purposes of paragraph (1)(d), the fair market value at that time of the property so transferred is deemed to be nil, but nothing in this subsection limits the liability of the individual under this Act.

• Marginal note:Anti-avoidance rules

  (6) For the purposes of this section, if a person transfers property to another person as part of a transaction or series of transactions, the following rules apply:

  • (a) the transferor is deemed to not be dealing at arm’s length with the transferee at the time of the transfer of the property if

    • (i) the transferor and the transferee do not deal at arm’s length at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, and

    • (ii) it is reasonable to conclude that one of the purposes of undertaking or arranging the transaction or series of transactions is to avoid joint and several, or solidary, liability of the transferee and the transferor under this section for an amount payable under this Act;

  • (b) an amount that the transferor is liable to pay under this Act (including, for greater certainty, an amount that the transferor is liable to pay under this section, regardless of whether the Minister has made an assessment under subsection (3) in respect of that amount) is deemed to have become payable in the calendar year of the transferor in which the property was transferred, if it is reasonable to conclude that one of the purposes of the transfer of the property is to avoid the payment of a future amount payable under this Act by the transferor or transferee; and

  • (c) the amount determined for A in paragraph (1)‍(d) is deemed to be the greater of

    • (i) the amount otherwise determined for A in paragraph (1)‍(d) without reference to this paragraph, and

    • (ii) the amount determined by the formula

      A − B

      where

      A

      is the fair market value of the property at the time of the transfer, and

      B

      is the fair market value, at its lowest at any time during the period beginning immediately prior to the transaction or series of transactions and ending immediately after the transaction or series of transactions, of the consideration given by the transferee for the transfer of the property (other than any part of the consideration that is in a form that is cancelled or extinguished during that period and for which no property that is neither cancelled nor extinguished during that period is substituted) provided that the consideration is held by the transferor at that time.