Garnishment is a collection action in which the Canada Revenue Agency directs a third party who owes money to a tax debtor — such as an employer, a bank, or a customer — to pay that money to the CRA instead. The CRA's principal garnishment tool is the requirement to pay, which creates a legal obligation on the third party to remit, enforceable against the third party personally if it fails to comply.
Wage garnishments are commonly limited to a percentage of net pay, with a lower cap for arm's-length employees than for non-arm's-length ones. A taxpayer often learns of a garnishment only indirectly, through a reduced paycheque or a frozen account. Addressing the underlying debt, negotiating a payment arrangement, or disputing the assessment are the usual paths to lifting it.