Gold dealer wins time to restructure after CRA enforcement freezes bank account

999 Gold Depot (Canada) Limited, a Toronto precious metals dealer, filed a notice of intention to make a proposal on April 30, 2026, after Canada Revenue Agency enforcement activity blocked access to its sole operating bank account and created what the company described as an acute liquidity crisis.

999 Gold is a family-owned precious metals business operating from a 780 square foot facility at 27 Queen Street East in Toronto. It has operated in the precious metals industry for over 29 years and currently employs five individuals. The company buys scrap precious metals, including gold, silver, platinum, palladium, dental scrap, grindings, filings, polishing dust and sweeps, then arranges for refining through third-party refiners in Canada and the United States before selling refined bullion to investors and jewellers.

The restructuring is driven by a tax dispute focused on the company’s gold purchasing, refining and resale activities. CRA issued GST/HST reassessments dated March 2, 2023 for the reporting periods April 1, 2013 to August 31, 2019, disallowing $15,695,124 in input tax credits and assessing gross negligence penalties and related interest. The company filed a Notice of Objection on May 10, 2023, CRA’s Appeals Division confirmed the reassessments on May 13, 2024, and the company filed a Tax Court of Canada appeal dated February 9, 2026.

The CRA dispute goes to the mechanics of GST/HST in the scrap gold business. 999 Gold says its gold refining operations historically generated 1-2% gross margins, while it paid significant GST/HST on scrap precious metals purchases and collected much smaller amounts on sales of refined investment-grade gold, many of which were treated as zero-rated or exempt. The company says that model produced substantial ITCs and recurring GST/HST refunds, and that timely refunds were needed to maintain working capital.

CRA alleges that certain transactions involving 999 Gold formed part of a scrap gold “carousel scheme” and disputes the company’s entitlement to the ITCs claimed during the reporting period. According to the company’s materials, CRA’s position includes allegations that certain gold purchases were not undertaken in the course of the company’s commercial activities, and that the company participated in a scheme involving accommodation invoices, sham documentation and debased pure gold. 999 Gold disputes those allegations.

999 Gold’s response is that it purchased scrap gold in the ordinary course from GST/HST-registered suppliers, documented the transactions, verified supplier identities and GST/HST registrations, paid GST/HST to suppliers, and was entitled to claim ITCs. It denies participating in any carousel scheme and argues that CRA has not provided evidence that it knowingly distributed GST/HST refunds or refined metals to scheme participants. The company also says it bought and refined real gold, made only its ordinary small margin, and was not responsible for any alleged supplier failure to remit GST/HST.

CRA’s collection activity escalated over time. It issued a Requirement to Pay to RBC on January 12, 2024 for $27,944,666.52, but the company said it did not maintain accounts with RBC and the notice had no material operational impact. A second RTP was issued to Scotiabank on July 9, 2025 for $31,054,133.85, again without material impact because the company did not maintain accounts there. On October 23, 2025, CRA asserted that $31,807,932.93 was owing and warned that, absent payment or response within 14 days, it could garnish income and bank accounts, seize and sell assets and take other enforcement steps.

The immediate trigger was CRA’s April 22, 2026 RTP to CIBC for $31,822,645.36. CIBC maintained the company’s sole operating bank account, and the RTP prevented 999 Gold from accessing funds to pay suppliers, receive and process customer payments, pay rent, meet payroll and continue ordinary-course operations. The company also says CRA’s refusal to remit GST/HST refunds since the audit and reassessment process materially constrained liquidity, impaired its ability to purchase scrap metals from suppliers at historical levels and contributed to a significant decline in its business-to-business scrap precious metals operations.

After the NOI filing, company counsel contacted the Department of Justice on May 1 to seek withdrawal of the April RTP. CRA then issued correspondence confirming that the April RTP had been cancelled effective May 4, although the withdrawal letter stated that cancellation did not affect CRA’s rights under the statutes it administers. The CIBC account initially remained frozen, but after further correspondence with CIBC, the company regained access to the account and resumed ordinary-course operations.

The proposed restructuring remains at an early stage. The company has not formulated a definitive plan and says it needs the stay to engage with CRA, the proposal trustee and other stakeholders, maintain relationships with suppliers, customers and employees, pursue payment of post-filing GST/HST refunds, and assess whether to continue under the BIA or shift to CCAA proceedings.

KSV is the proposal trustee. Counsel is Chaitons for the company and Blakes for the proposal trustee.