Whether or not you are a lawyer, the "deemed trust" provisions are difficult to grasp. What do they refer to? What are their purpose? Who are their beneficiaries? To put it simply, a deemed trust is a fiction of law which the legislator has created in favour of the State to allow it to collect, in priority to other creditors, fiscal debts which have not been remitted by a tax debtor.
For several years, the Income Tax Act (federal) ("ITA") and the Act respecting the Ministère du Revenu (provincial) ("AMR") have stated that a tax debtor (for example, an employer) who withholds deductions at source from his employees' pay cheques (the "DAS"), holds those amounts in trust for the tax authorities, separate and apart from his own property, hence the expression "deemed trust".
