Wage Garnishment & Frozen Bank Accounts: What the CRA Can Really Do

Tom Broderick
Jun 16
2 min read

Updated: Jul 7

Welcome to Episode 41 of The Real Estate and Money Show with Kevin J. Johnston!In this episode, Kevin exposes one of the most misunderstood—and financially devastating—issues facing Canadians today: wage garnishment and frozen bank accounts.

If you’ve ever had money suddenly vanish from your paycheck or lost access to your own bank funds, it could be due to Section 317 of the Excise Tax Act. This law gives the Canada Revenue Agency (CRA) extraordinary power to collect unpaid taxes—without notice.

🎥 Watch the full episode below to understand how the law works, what the CRA can and can’t do, and how to protect your money before it’s too late.

📢 Book your 1:1 consultation now: www.KevinJJohnston.com

🧾 What Is Wage Garnishment & How Does Section 317 Work?

Under Section 317 of Canada’s Excise Tax Act, the CRA has the legal right to seize money directly from your paycheck or freeze your bank account to collect unpaid income taxes, GST, or HST. Unlike traditional legal proceedings, this action doesn’t always require a court order.

Kevin explains how this law functions in real life—and why most Canadians don’t see it coming until it’s too late.

How Much of Your Paycheck Can the CRA Garnish?

If you owe money to the CRA, they can take a percentage of your wages directly from your employer. Kevin breaks down:

What percentage of your net pay can be garnished
What your employer is legally required to do
How quickly this action can begin
Whether you're entitled to keep a minimum income for living expenses

Frozen Bank Accounts: How It Happens and What You Can Do

CRA bank account freezes are triggered by legal demands issued to your financial institution. These can lock your entire balance instantly—even before you’re notified.

Kevin details:

What a freeze looks like
Why it happens without court involvement
How to legally respond or reverse the freeze
What to do if the frozen amount includes child support or essential living expenses

Know Your CRA Rights Before It’s Too Late

The CRA has serious collection powers—but you also have rights. Kevin walks you through the steps to:

Review or challenge CRA’s calculations
File for hardship relief or payment arrangements
Prevent enforcement by staying proactive
Work with financial consultants for negotiation

Practical Steps to Avoid CRA Garnishments

Kevin offers a clear plan for Canadians who want to stay in control:

Keep your CRA account up-to-date and check for notices
File taxes on time—even if you can’t pay immediately
Communicate with CRA before enforcement begins
Seek expert advice before panic sets in

Feeling Cornered? Here’s What to Do Next

If you’re already facing CRA action—you’re not alone. Many small business owners, self-employed Canadians, and families fall into this situation every year. The difference? Most don’t know how to fight back.

This episode gives you the knowledge you need to: