In our September 2016 letter, we wrote that Canadian chartered banks are required to accept cheques in payment of income tax accounts. This was based on section 229 of the Income Tax Act.
It turns out on further research that section 229 was repealed many years ago, through an obscure process of proclaiming into force a new version of the Act which included a provision repealing the section.
(Some commercially published editions for the Act did not reflect the repeal.)
Section 229 has been replaced with subsection 159(2) of the Financial Administration Act, which provides that “no bank … shall make a charge … in respect of any cheque or other instruction for payment drawn in favour of the Receiver General … and tendered for deposit to the credit of the Receiver General”.
Notably, the new provision does not say that a bank must accept a cheque payable to the Receiver General. It says only that it must not charge for accepting such a cheque.
While the law is not entirely certain, it appears that a bank is entitled to refuse to accept a cheque, which is what some banks now do.
We apologize for the error.