The sheer number of cannabis insolvencies in Canada over the last five years has resulted in a number of unique issues being considered, not least of which is directors’ liability to the Crown for unremitted excise taxes.
Section 295 of the Excise Act, 2001 (Canada) (“Excise Act”) imposes liability on corporate directors for a corporation’s unpaid duties and interest. If a corporation fails to remit required duties or interest, its directors at the time of the failure can be held jointly and severally liable with the corporation for these amounts.
This provision is similar to Section 227.1 of the Income Tax Act (Canada) (“ITA”) and Section 323 of the Excise Tax Act (Canada) (“ETA”). The policy rationale…
