A director's liability assessment is the CRA's mechanism for collecting a corporation's unpaid trust amounts — GST/HST, CPP, and EI — directly from its directors. Although incorporation normally shields principals from corporate debts, the directors have a duty to ensure that amounts held in trust for the Crown are remitted, and they can be held personally liable when that duty is breached.
A director can generally be assessed only within two years of ceasing to be a director, and the corporation's ability to pay must first be exhausted. The principal defence is the due-diligence defence, which asks whether the director exercised the degree of care, diligence, and skill that a reasonably prudent person would have in comparable circumstances. In practice these assessments are difficult to overturn, so contemporaneous records of the steps a director took to prevent the failure are important.