What are priority debts in Canada?

Priority debts are debts with the most serious consequences for non-payment — such as losing your home, having utilities shut off, or facing criminal charges. They include rent/mortgage, utilities, child support, CRA tax debts, and court fines. These should be paid before credit cards or personal loans.

What happens if I don''t pay CRA taxes?

CRA has more collection power than any other creditor. They can garnish your wages without a court order, seize bank accounts, put liens on your property, and intercept tax refunds. Interest compounds daily. Always prioritize CRA debt or set up a payment arrangement.

Should I pay credit cards or rent first?

Rent (or mortgage) should always come first. Missing rent can lead to eviction, which is far more damaging than a credit card late payment. Credit card companies may charge fees and interest and will report to the credit bureau, but they cannot take your home.

Priority Debts in Canada: Which Debts to Pay First (2026)

When you can’t pay all your bills, the order in which you pay them matters enormously. Missing a credit card payment hurts your score but missing rent gets you evicted. Missing a CRA payment lets the government garnish your wages without even going to court. The distinction between priority and non-priority debts isn’t about the interest rate or the balance — it’s about what the creditor can do to you if you don’t pay. Priority debts protect your shelter, your heat, your freedom, and your income. Everything else can wait.

Priority vs Non-Priority Debts

Priority Level	Debt Type	Consequence of Non-Payment
Critical	Rent / mortgage	Eviction / foreclosure
Critical	Utilities (heat/electricity)	Disconnection
Critical	Child support / alimony	Wage garnishment, jail
Critical	CRA tax debt	Wage garnishment, asset seizure (no court needed)
Critical	Court fines	Arrest warrant
High	Secured car loan	Vehicle repossession
High	Condo fees	Lien on property, legal action
High	Insurance premiums	Loss of coverage
Medium	Student loans	Wage garnishment, CRA intercept
Lower	Credit cards	Credit score damage, collections
Lower	Personal loans (unsecured)	Credit score damage, collections
Lower	Lines of credit (unsecured)	Credit score damage, collections
Lower	Medical debt	Collections (no direct legal power)
Lower	Buy now pay later	Collections, credit impact

Understanding Consequences

Critical Priority: Shelter

Debt	If You Don’t Pay	Timeline
Rent	Eviction process begins	Varies by province (14-60 days notice)
Mortgage	Foreclosure / power of sale	After 3-6 months typically
Property tax	Lien on home, eventually tax sale	2-3 years of arrears

Critical Priority: Utilities

Utility	Disconnection Rules	Winter Protection
Electricity	Notice required, then disconnect	Some provinces ban winter shutoffs
Natural gas	Notice required, then disconnect	Ontario: Nov 15 - Apr 30 protection
Water	Rarely disconnected (essential service)	Most jurisdictions don’t disconnect
Internet/phone	Can be disconnected	No seasonal protection

Critical Priority: Government

CRA is the most powerful creditor in Canada and the one most people underestimate. Unlike every other creditor on this list, CRA does not need a court order to garnish your wages (up to 50%), freeze your bank accounts, or put a lien on your property. They can and do intercept tax refunds to cover outstanding balances. The good news: CRA almost always agrees to a payment arrangement if you call proactively. Waiting until they start enforcement is the expensive mistake — set up a payment plan before it gets to that point.

Debt	CRA/Government Powers
Income tax owed	Garnish wages (up to 50%), seize bank accounts, lien on property, intercept tax refunds
GST/HST owed	Same as income tax
Child support arrears	Garnish wages, suspend passport, suspend driver’s licence, jail (contempt of court)
Court fines	Arrest warrant, driver’s licence suspension
Student loans (government)	CRA can intercept tax refunds, garnish wages

High Priority: Secured Debts

Debt	What the Creditor Can Do
Car loan	Repossess vehicle
Secured line of credit	Seize collateral
Condo fees	Register lien, force sale
Equipment financing	Seize equipment

Lower Priority: Unsecured Debts

Debt	What the Creditor Can Do
Credit cards	Report to bureau, send to collections, sue (then garnish)
Personal loans	Same as credit cards
Lines of credit (unsecured)	Same as credit cards
Medical bills	Send to collections
Buy now pay later	Report to bureau, collections

Key difference: Unsecured creditors must sue you and win a court judgment before they can garnish wages or seize assets. This takes months or years.

How to Triage When You Can’t Pay Everything

The triage framework below works in any financial crisis: job loss, illness, divorce, or simply falling behind. The core principle is that shelter and safety come first, government debts second (because of their enforcement powers), secured debts third (because they can take the collateral), and unsecured debts last. This isn’t about ignoring your credit cards — it’s about making rational decisions when there isn’t enough money for everything. Once you’ve covered the priorities, even small payments to unsecured creditors show good faith and may prevent them from escalating.

Step 1: Calculate Your Essentials Budget

Category	Monthly Amount
Rent / mortgage	$
Utilities	$
Food	$
Essential transportation	$
Child support	$
Medications	$
Total essentials	$

Step 2: Apply the Priority Framework

Order	Action
1	Pay housing costs (rent/mortgage)
2	Pay utilities (especially heat in winter)
3	Pay child support in full
4	Buy essential food and medication
5	Contact CRA to arrange tax payment plan
6	Make secured debt payments (car loan)
7	Pay minimum on unsecured debts if anything remains
8	Seek free help if you can’t cover priorities

Step 3: Contact Creditors Before Missing Payments

Creditor Type	What to Ask For
Landlord	Payment plan for arrears, reduced rent temporarily
Mortgage lender	Payment deferral, extended amortization
Utility company	Budget billing, payment arrangement, low-income programs
CRA	Payment arrangement (they almost always agree)
Bank / credit card	Hardship program, reduced interest, payment deferral

Province-Specific Rules

Eviction Timelines

Province	Notice Period (Non-Payment)	Process
Ontario	14 days (N4 form)	Then Landlord & Tenant Board hearing
BC	10 days	Then Residential Tenancy Branch
Alberta	14 days	Then court application
Quebec	20 days	Then Régie du logement
Manitoba	14 days	Then Residential Tenancies Branch
Nova Scotia	15 days	Then Residential Tenancies

Winter Utility Disconnection Rules

Province	Winter Protection
Ontario	Cannot disconnect electricity Nov 15 - Apr 30 for residential
Quebec	Cannot disconnect electricity for low-income Oct 1 - Mar 31
Manitoba	Cannot disconnect gas heating Nov 1 - Apr 30
BC	No specific winter disconnection ban
Alberta	No specific winter disconnection ban

When to Seek Professional Help

If your total debts exceed your annual income, or if you’re already behind on priority debts, free help is available. Credit counsellors can negotiate with creditors on your behalf and set up debt management plans that reduce interest rates. If your situation is more serious, a Licensed Insolvency Trustee can explain whether a consumer proposal or bankruptcy makes sense — the initial consultation is always free. If debt is affecting your mental health, that’s a sign you’ve been carrying this alone too long.

Situation	Recommended Help
Behind on priority debts	Contact creditors immediately, call 211 for local help
Multiple missed payments	Free credit counselling
Debt exceeds annual income	Licensed Insolvency Trustee consultation (free)
Facing eviction	Legal aid, tenant rights organization
CRA garnishing wages	Tax lawyer or LIT
Feeling overwhelmed	Credit counsellor + mental health support

The Bottom Line

Pay the debts that protect your home, your utilities, and your freedom before everything else. Call CRA before they come to you. Contact creditors proactively — most will work with you if you ask before missing a payment, not after. And if you can’t cover even the priority debts, call 211 for local emergency assistance or book a free credit counselling session.