Bill S-23

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	Garnishment and Non-arm's Length Transfers
Garnishment - general	97.28 (1) If the Minister has knowledge or suspects that a person is or will be, within one year, liable to make a payment to a debtor, the Minister may, by notice in writing, require the person to pay without delay, if the moneys are immediately payable, and, in any other case, as and when the moneys become payable, the moneys otherwise payable to the debtor in whole or in part to the Receiver General on account of the debtor's liability under this Act.
Garnishment - institutions	(2) The Minister may, by notice in writing, require the following institutions or persons to pay in whole or in part to the Receiver General on account of a debtor's liability the moneys that would otherwise be loaned, advanced or paid if the Minister has knowledge or suspects that within ninety days
	(a) a bank, credit union, trust company or other similar person (in this section referred to as the ``institution'') will loan or advance moneys to, or make a payment on behalf of, or make a payment in respect of a negotiable instrument issued by, a debtor who is indebted to the institution and who has granted security in respect of the indebtedness; or
	(b) a person, other than an institution, will loan or advance moneys to, or make a payment on behalf of, a debtor who 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 ninety days, so employed or engaged, or
	(ii) if that person is a corporation, is not dealing at arm's length with that person.
	Any moneys so paid to the Receiver General are deemed to have been loaned, advanced or paid to the debtor.
Effect of receipt	(3) A receipt issued by the Minister for moneys paid as required under this section is a good and sufficient discharge of the original liability to the extent of the payment.
Periodic payments	(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 moneys 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 such amount as is required by the Minister in a notice in writing.
Failure to comply	(5) Every person who 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.
Failure to comply - institutions	(6) Every institution or person that fails to comply with a requirement under subsection (2) is liable to pay to Her Majesty in right of Canada an amount equal to the lesser of
	(a) the total of moneys loaned, advanced or paid to the debtor, and
	(b) the amount that the institution or person was required under that subsection to pay to the Receiver General.
Service	(7) If a person carries on business under a name or style other than the person's own name, notification to the person of a requirement under subsection (1) or (2) may be addressed to the name or style under which the person carries on business and, in the case of personal service, is validly served if it is left with an adult person employed at the place of business of the addressee.
Service - partnerships	(8) If persons carry on business in partnership, notification to the persons of a requirement under subsection (1) or (2) may be addressed to the partnership name and, in the case of personal service, is deemed to be validly served if it is served on one of the partners or left with an adult person employed at the place of business of the partnership.
Effect of payment as required	(9) If an amount that would otherwise have been payable to or on behalf of a debtor is paid by a person to the Receiver General pursuant to a notice served on the person under this section or pursuant to an assessment under section 97.44, the person is deemed, for all purposes, to have paid the amount to or on behalf of the debtor.
Application to Her Majesty in right of a province	(10) Provisions of this Part that provide that a person who has been required by the Minister to pay to the Receiver General an amount that would otherwise be loaned, advanced or paid to a debtor who is liable to make a payment under this Act apply to Her Majesty in right of a province.
Liability - non-arm's length transfers	97.29 (1) If a person transfers property, either directly or indirectly, by means of a trust or by any other means, to the transferor's spouse or common-law partner or an individual who has since become the transferor's spouse or common-law partner, an individual who was under eighteen years of age, or 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 an amount equal to the lesser of
	(a) 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 the time of transfer 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 and subsection 160(2) of the Income Tax Act in respect of the property exceeds the amount paid by the transferor in respect of the amount so assessed, and
	(b) the total of all amounts each of which is
	(i) an amount that the transferor is liable to pay under this Act, or
	(ii) interest or a penalty for which the transferor is liable as of the time of transfer.
	However, nothing in this subsection limits the liability of the transferor under any other provision of this Act.
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 (4), equal to the same proportion of the fair market value of that property at that time.
Rules applicable	(3) If a transferor and transferee have, under subsection (1), become jointly and severally or solidarily liable in respect of all or part 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 discharges, to the extent of the payment, the joint liability; and
	(b) a payment by the transferor on account of the transferor's liability discharges the transferee's liability only 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 made jointly and severally or solidarily liable.
Transfers to spouse or common-law partner	(4) Despite subsection (1), if at any time a debtor transfers property to the debtor'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 debtor and the debtor'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)(a), the fair market value at that time of the property so transferred is deemed to be nil. However, nothing in this subsection limits the liability of the debtor under any other provision of this Act.
Related persons	(5) For the purposes of this section,
	(a) related persons are deemed not to deal with each other at arm's length, and it is a question of fact whether persons not related to each other were, at any particular time, dealing with each other at arm's length;
	(b) persons are related to each other if they are related persons within the meaning of subsections 251(2) to (6) of the Income Tax Act, except that references in those subsections to ``corporation'' are to be read as references to ``corporation or partnership'', and references in those subsections to ``shares'' or ``shareholders'' are, in respect of a partnership, to be read as references to ``rights'' or ``partners'', respectively; and
	(c) a member of a partnership is deemed to be related to the partnership.
Definitions	(6) The definitions in this subsection apply in this section.
``common-la w partner'' « conjoint de fait »	``common-law partner'' has the same meaning as in subsection 248(1) of the Income Tax Act except that references to ``taxpayer'' in that definition are to be read as references to ``debtor''.
``common-la w partnership'' « union de fait »	``common-law partnership'' has the same meaning as in subsection 248(1) of the Income Tax Act.
``property'' « bien »	``property'' includes money.
	Acquisition of Property and Seizures
Acquisition of debtor's property	97.3 For the purpose of collecting amounts owed by a debtor, the Minister may purchase or otherwise acquire any interest in the debtor'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 so acquired in any manner that the Minister considers reasonable.
Moneys seized from debtor	97.31 (1) If the Minister has knowledge or suspects that a person is holding moneys that were seized by a police officer, in the course of administering or enforcing the criminal law of Canada, from a debtor and that are restorable to the debtor, the Minister may, by notice in writing, require that person to turn over the moneys otherwise restorable to the debtor, in whole or in part, to the Receiver General on account of the debtor's liability under this Act.
Receipt	(2) A receipt issued for moneys turned over is a good and sufficient discharge of the requirement to restore the moneys to the debtor to the extent of the amount so turned over.
Seizure of chattels	97.32 (1) If a person fails to pay an amount as required under this Act, the Minister may give thirty days notice to the person by registered or certified mail addressed to the person at their latest known address of the Minister's intention to direct that the person's goods and chattels be seized and sold. If the person fails to make the payment before the expiration of the thirty days, the Minister may issue a certificate of the failure and direct that the person's goods and chattels be seized.
Sale of seized property	(2) Seized property must be kept for ten days at the expense and risk of the owner and, if the owner does not pay the amount due together with all expenses within the ten days, the property seized shall be sold by public auction.
Notice of sale	(3) Except in the case of perishable goods, notice of the sale setting out the time and place of the sale together with a general description of the property to be sold must be published, a reasonable time before the goods are sold, in one or more newspapers of general local circulation.
Surplus	(4) Any surplus resulting from a sale, after deduction of the amount owing and all expenses, must be paid or returned to the owner of the property seized.
Exemption from seizure	(5) Goods and chattels of any person that would be exempt from seizure under a writ of execution issued out of a superior court of the province in which the seizure is made are exempt from seizure under this section.
Person leaving Canada	97.33 (1) If the Minister suspects that a person who is liable to pay an amount under this Act or would be so liable if the time for payment of the amount had arrived has left or is about to leave Canada, the Minister may, before the day otherwise fixed for payment, by notice in writing, demand payment of the amount. Despite any other provision of this Act, the person shall pay the amount immediately.
Failure to pay	(2) If a person fails to pay an amount as required, the Minister may direct that the goods and chattels of the person be seized and subsections 97.32(2) to (5) apply.
	Collection Restrictions
Collection action delayed	97.34 (1) If a person is liable for the payment of an amount under this Act, if an amount is demanded in a notice served under section 109.3 or 124, or if an amount is demanded under paragraph 133(1)(c) or subsection 133(1.1) in a notice served under subsection 131(2), the Minister must not, for the purpose of collecting the amount, take the following actions until the ninety-first day after the day notice is given to the debtor:
	(a) commence legal proceedings in a court;
	(b) certify the amount under section 97.24;
	(c) require the retention of the amount by way of deduction or set-off under section 97.26;
	(d) require a person or institution to make a payment under section 97.28;
	(e) require a person to turn over moneys under subsection 97.31(1); or
	(f) give a notice, issue a certificate or make a direction under subsection 97.32(1).
Appeal to Federal Court	(2) If a person has appealed a decision of the Minister to the Federal Court under section 97.23 or 135, the Minister must not take any action described in subsection (1) to collect the amount in controversy before the date of the decision of the Court or the day on which the person discontinues the appeal.
Reference to Canadian International Trade Tribunal	(3) If the Commissioner has referred a question to the Canadian International Trade Tribunal under section 70, the Minister must not take any action described in subsection (1) to collect the amount in controversy before the day on which the question is determined by the Tribunal.
Effect of appeal	(4) If a person has made a request under section 60 or 129 or has appealed under section 67 or 68 and the person agrees in writing with the Minister to delay proceedings on the request or appeal, as the case may be, until judgment has been given in another action before the Federal Court, the Canadian International Trade Tribunal or the Supreme Court of Canada, in which action the issue is the same or substantially the same as that raised in the request or appeal of the person, the Minister may take any of the actions described in subsection (1) for the purpose of collecting the amount payable, or a part of the amount payable, determined in a manner consistent with the decision or judgment in the other action at any time after the Minister notifies the person in writing that
	(a) the decision of the Canadian International Trade Tribunal or Federal Court in that action has been mailed to the Minister;
	(b) judgment has been pronounced by the Federal Court of Appeal in that action; or
	(c) judgment has been delivered by the Supreme Court of Canada in that action.
Effect of taking security	(5) The Minister must not, for the purpose of collecting an amount payable, or a part of an amount payable, under this Act, take any of the actions described in subsection (1) if a person has given security to the Minister when requesting or appealing from a decision of the Commissioner or Minister.
Authoriza- tion to proceed immediately	97.35 (1) Despite section 97.34, if, on ex parte application by the Minister, a judge is satisfied that there are reasonable grounds to believe that the collection of all or any part of an amount assessed or demanded under this Act would be jeopardized by a delay in the collection of that amount, the judge shall, on any terms that the judge considers reasonable in the circumstances, authorize the Minister to immediately take any action described in that section to collect the amount.
Notice not sent	(2) An authorization may be granted by a judge notwithstanding that a notice in respect of the amount has not been sent to the debtor at or before the time the application is made if the judge is satisfied that the receipt of the notice by the debtor would likely further jeopardize the collection of the amount and, for the purposes of sections 97.22, 97.24, 97.26, 97.28, 97.31 and 97.32, the amount in respect of which an authorization is granted is deemed to be an amount payable under this Act.
Affidavits	(3) Statements contained in an affidavit filed in the context of an application made under this section may be based on belief but must include the grounds for the belief.
Service of authorization	(4) An authorization must be served by the Minister on the debtor 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, if a notice has not been sent to the debtor at or before the time of the application, the notice is to be served together with the authorization.
How service effected	(5) Service on a debtor must be effected by personal service or in accordance with the directions of a judge.
Application to judge for direction	(6) If service on a debtor cannot reasonably otherwise be effected as and when required under this section, the Minister may, as soon as is practicable, apply to a judge for further direction.
Review of authorization	(7) If a judge of a court has granted an authorization, the debtor may, on six clear days notice to the Deputy Attorney General of Canada, apply to a judge of the court to review the authorization.
Limitation period for review application	(8) An application under subsection (7) must be made
	(a) within thirty days after the day on which the authorization was served on the debtor 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 was practicable.
Hearing in camera	(9) An application may, on request of the debtor, be heard in camera, if the debtor establishes to the satisfaction of the judge that the circumstances of the case justify in camera proceedings.
Disposition of application	(10) On an application, the judge is to determine the question summarily and may confirm, set aside or vary the authorization and make any other order that the judge considers appropriate.
Directions	(11) 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 direction in this section in respect of the matter, a judge may give any direction in respect of the matter that, in the opinion of the judge, is appropriate.

Bill S-23

Garnishment and Non-arm's Length Transfers

Acquisition of Property and Seizures

Collection Restrictions