999 Gold Depot obtains CCAA protection pending $31 Million CRA tax appeal

999 Gold Depot (Canada) Limited obtained protection under the Companies’ Creditors Arrangement Act on July 13, 2026, continuing proposal proceedings it commenced after Canada Revenue Agency enforcement froze its principal operating account. Justice Myers granted the initial order just one day before the company would have been deemed bankrupt under its Bankruptcy and Insolvency Act proceedings, finding that the company met the CCAA’s technical requirements, had sufficient forecast liquidity and was acting in good faith and with due diligence. CRA had input into the form of the order and did not oppose the application.

The stay does not prevent the procedural continuation of the company’s Tax Court appeal, although enforcement of any order affecting the monitor, the business or its property remains stayed. The order also restricts creditors from setting off pre-filing obligations against post-filing obligations without the company’s and monitor’s consent or leave of the Court, while preserving CRA’s and other parties’ ability to contest the restriction.

Justice Myers said the case is driven by a single issue: whether CRA’s reassessment of the company’s GST/HST reporting will be upheld. The company wants to preserve enterprise value and stabilize operations while that dispute proceeds, and the Court found there was no purpose in requiring an early comeback hearing. The company can instead report on the Tax Court proceeding, with the monitor’s assistance and on notice to CRA, several months into the case.

Founded in 1997, 999 Gold Depot is a family-owned precious-metals dealer that purchases scrap gold, silver, platinum, palladium, dental scrap and other materials. It arranges for those materials to be refined by third-party refiners in Canada and the United States and sells the resulting bullion, primarily to investors and jewellers. The company operates from an approximately 780-square-foot leased facility in downtown Toronto containing customer booths, a melt room, 2 induction furnaces, 2 x-ray assay machines and secure storage. It employs 5 people, including 4 full-time employees, and has gross payroll of approximately $20,000 every 2 weeks.

The company generally pays suppliers 98% of the value of the gold contained in scrap purchases, leaving a narrow margin and potential exposure to movements in gold prices. It historically paid substantial GST/HST on scrap purchases while many sales of investment-grade gold were treated as zero-rated or exempt, producing recurring input tax credits and GST/HST refund claims. During the disputed reporting period, the company dealt with approximately 439 gold suppliers.

CRA proposed reassessing the company in May 2022, alleging that certain transactions formed part of a scrap-gold carousel scheme involving accommodation invoices, sham documents and debased gold. On March 2, 2023, CRA disallowed approximately $15.7 million of input tax credits for reporting periods from April 1, 2013 through August 31, 2019 and imposed gross-negligence penalties and interest. The company denies participating in a carousel scheme and says it purchased scrap gold from GST/HST-registered suppliers in the ordinary course, documented the transactions and performed supplier verification.

999 Gold Depot filed a notice of objection on May 10, 2023. CRA’s Appeals Division confirmed the assessments on May 13, 2024, and the company filed a Tax Court appeal on February 9, 2026. The Crown filed its reply on May 27, pleading that the company carried on legitimate business activity but also participated in a carousel involving non-bona fide suppliers. The company disputes that allegation. Its tax counsel expects the appeal process, including documentary production, discoveries, potential motions and trial, to require approximately 18 months to 2 years.

CRA also escalated collection activity. Requirements to pay were issued to RBC for $27.94 million in January 2024 and to Scotiabank for $31.05 million in July 2025, although the company did not maintain accounts at either institution at the relevant time. CRA advised the company in October 2025 that its records showed $31.81 million owing. An April 22, 2026 requirement to pay directed at CIBC covered $31.82 million and blocked the company’s access to its operating funds, leaving it unable to pay suppliers, process customer payments, meet payroll or continue ordinary-course operations.

The company filed its NOI on April 30. CRA cancelled the CIBC requirement to pay effective May 4, and the company regained access to its accounts following further correspondence with CIBC. CRA has continued reviewing the company’s tax position, however, and proposed increasing its April 2026 net tax payable by $169,419, from $36,163 to $205,546. The company disputes the adjustment and was given until July 27 to provide additional creditor and payment information.

The monitor said the BIA process did not provide enough time to resolve the Tax Court appeal and develop a viable proposal. CRA is by far the company’s largest creditor, and the appeal’s outcome will determine the amount of its claim and the structure of any eventual restructuring plan. Justice Myers accepted that the CCAA provides the longer runway needed to isolate and address the cause of the company’s financial distress while avoiding bankruptcy to the extent permitted by law.

999 Gold Depot had approximately $1.06 million in available cash at the beginning of July and no secured creditors. Its forecast through November 14 projects $12.99 million of receipts and $13.49 million of disbursements, resulting in closing cash of approximately $557,000. Materials purchases account for $12.5 million of the forecast spending. The company is not seeking interim financing at this stage.

AlixPartners is the monitor. Counsel is Chaitons LLP as restructuring counsel, Blake, Cassels & Graydon LLP is counsel to the monitor, and Alepin Gauthier Avocats Inc. as tax counsel.