Can CRA collect taxes I owe while I'm disputing a reassessment?

Generally, CRA's collection action is suspended (stayed) once you file a Notice of Objection. CRA is not permitted to take collection action on the amounts in dispute while the objection is pending, or for 90 days after you file an appeal to the Tax Court of Canada. This gives taxpayers a meaningful period to dispute an assessment without being subject to aggressive collection simultaneously.

However, there are exceptions. If CRA believes that collection is "in jeopardy" — meaning you might dissipate assets or leave Canada before the matter is resolved — it can apply to the Federal Court for a jeopardy order, which allows it to collect immediately despite the pending dispute. Jeopardy orders are relatively rare and require court approval.

You should also be aware that interest continues to accrue on the disputed amount even while collection is stayed. If you ultimately lose the dispute, you will owe the original taxes plus all accrued interest. Some taxpayers choose to pay the disputed amount into CRA "on account" to stop interest from running, and then pursue a refund through the dispute process. A tax lawyer can help you decide whether paying on account makes sense given the merits of your case.