Canada: Tax Authorities

Section 160 of the Income Tax Act is one of the Canada Revenue Agency’s most powerful collection tools. It can make the recipient of a property transfer jointly and severally liable for the transferor’s unpaid tax debt where the property moved for less than fair market value to a non-arm’s-length person.

Falling behind on a Toronto property tax bill is stressful enough on its own. It becomes more complicated when an unrelated debt, such as an unpaid water bill, a by-law fine, or a local improvement charge, suddenly shows up added to the same tax account.

The Canada Revenue Agency’s access to information about cryptocurrency and other crypto-assets is entering a new phase. Canadian taxpayers have always been responsible for identifying, valuing, classifying, and reporting taxable crypto activity, even where an exchange issued no Canadian tax slip, the transaction occurred through a foreign platform, or the assets were never converted into Canadian dollars. 

Falling behind on a Toronto property tax bill is stressful enough on its own. It becomes more complicated when an unrelated debt, such as an unpaid water bill, a by-law fine, or a local improvement charge, suddenly shows up added to the same tax account.

The Canada Revenue Agency’s (“CRA”) authority to conduct a cryptocurrency tax audit begins with subsection 231.1(1) of the Income Tax Act. It gives authorized CRA officials broad powers to inspect or examine relevant documents, records, property, processes, and other matters, and to require reasonable assistance and proper oral or written answers.

Savvy crypto investors and traders in Canada often ask the same question: should crypto activity be carried on personally or through a Canadian-controlled private corporation, commonly called a CCPC? In 2026, that question still has no one-size-fits-all answer. The right structure depends on factors such as the type of crypto activity, the level of profit, the need to deduct expenses, whether the taxpayer wants to combine crypto results with other income sources, and more.

The creator economy has fundamentally changed how Canadians earn income. YouTubers, Instagram influencers, TikTok personalities, Twitch streamers, podcasters, affiliate marketers, bloggers, online educators, subscription-based performers, and other digital entrepreneurs now generate substantial revenues through online platforms.

Crypto losses are not all deductible in the same way. In Canada, the core question is not simply whether a taxpayer lost money on Bitcoin, Ether, Tao or another token.

No. In Bank of Montreal v. The King, the Tax Court of Canada held that interest on overdue U.S. income tax liabilities is generally not deductible for Canadian income tax purposes because it is incurred as a consequence of earning income rather than for the purpose of earning income.