On March 21, 2025, the federal government announced temporary relief to help businesses manage cash flow pressures arising from U.S. tariffs. Specifically, the PMO indicated that no instalment or arrears interest would be charged on GST/HST and corporate income tax amounts owing from April 2 and June 30, 2025, including instalment payments becoming due within that period.
While straightforward in principle, the relief has caused unexpected complications for some businesses. We're hearing from members that the CRA's automated system continued to transfer refunds from one program account (e.g., GST/HST) to offset balances owing on another account (e.g., corporate income tax), even when those balances remain unpaid solely because of the announced relief. Further, the CRA apparently lacks the ability to fully suspend interest calculations during this period. As a result, interest is initially charged, and refunds from other accounts are sometimes applied against this "phantom interest" before it is eventually reversed.
This has led to confusion, cash flow disruptions, and additional administrative burdens for affected businesses-undermining the very relief the program was meant to provide.
Posted to LinkedIn on July 30, 2025
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Ryan Minor
Chartered Professional Accountants of Canada
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