Further Significant Increases To The CRA's Prescribed Interest Rates

The Canada Revenue Agency ("CRA") increased its prescribed rates of interest for the third quarter by 60% over Q3 2022 levels after inflation reached heights not seen in decades.

Throughout 2022, inflation surged to levels last seen during the late 1970s and early 1980s, peaking at 8.1% in June before tapering off to 6.7% in December. To combat rising prices, the Bank of Canada has consistently raised interest rates, with the overnight lending rate rising to 4.5% in January. When the Bank of Canada increases the interest rate, the CRA's prescribed interest rates generally also increase.

The CRA charges a prescribed rate of interest on tax debts owing, including overdue federal income tax remittances, Canada Pension Plan contributions, Employment Insurance premiums, Goods and Services Tax ("GST") or Harmonized Sales Tax ("HST") remittances and excise tax remittances. The CRA also charges a prescribed rate of interest for interest-free or low-interest loans paid