The ESDC penalty payment deadline is 30 days after the day you are deemed to have received the notice of final determination, and the notice is deemed received 10 days after ESDC sends it. By that date you must either pay the administrative monetary penalty (AMP) in full or reach a payment agreement with the Canada Revenue Agency (CRA), which collects for ESDC. If you do neither, or later miss one instalment, you are in default and cannot hire foreign workers until the full amount and interest are paid.
This article starts after the final determination. It is based on ESDC internal policy released under ATIP (Policy: Administrative Monetary Penalties Payment and Collection and Policy: Employer Ineligibility for the Temporary Foreign Worker Program, both July 10, 2024, presented at the CILA 2026 LMIA Lab), checked against the Immigration and Refugee Protection Regulations (IRPR), the Immigration and Refugee Protection Act (IRPA) and ESDC’s employer compliance page on canada.ca (modified May 12, 2026). Where they differ, we follow the law and canada.ca. For how the penalty amount was set, see our article on the ESDC penalty points system.
Key Takeaways
- Pay in full, or sign a payment agreement with CRA, within 30 days after the notice of final determination is deemed received (IRPR s.209.996(4)(e) and (6)).
- Default means ESDC will not process your LMIAs and officers must refuse work permits for jobs with you, including LMIA-exempt jobs (IRPR ss.203(2)(b) and 200(3)(h)(iii)).
- Under ESDC’s policy, one missed, partial or bounced instalment is a default, and the default lasts until the whole AMP and interest are paid.
- Interest runs on an overdue AMP from the due date and is built into any payment agreement. Confirm the current rate with CRA.
- A Federal Court challenge does not pause collection or interest unless the Court orders a stay. The leave application is due within 15 days (IRPA s.72(2)(b)).
When is an ESDC penalty due?
An ESDC penalty is due 30 days after the day the notice of final determination is deemed received. The notice is deemed received 10 days after it is sent (5 days if it concerns only the COVID-19 and quarantine conditions in items 18 to 23 of Schedule 2). Within that period you must pay in full or reach a payment agreement for the amount and interest.
Under the Interpretation Act, as the policy applies it, neither the sending day nor the deemed receipt day is counted. Weekends and holidays count, but a deadline falling on a Sunday or holiday moves to the next working day. As an illustration: a notice sent on March 2 is deemed received on March 12, and the last day to pay or reach an agreement is April 11.
The policy adds that a notice returned undelivered is not deemed received. Do not rely on that; if a determination is coming, ask the inspector how and when the notice was sent.
If you are still at the notice of preliminary finding stage, you can still make written submissions before any final determination is made; that stage is covered in a separate article.
Who collects the penalty, and how do you pay?
The Minister of Employment and Social Development is responsible for recovering the AMP (IRPA s.146(1.1)), and under ESDC’s policy has delegated collection to CRA. In practice, you deal with CRA. Pay the way your notice says (IRPR s.209.996(4)(f)). The 2024 policy lists cheque, money order and bank draft; confirm current options with CRA before you send money.
The amount itself is fixed: ESDC’s policy says IRPA gives no authority to change an AMP once imposed, short of a litigation settlement through the Department of Justice.
What is a CRA payment agreement for an ESDC penalty?
A payment agreement is a schedule of payments for the AMP and interest that you reach with CRA within the 30-day period. While you keep to its terms, you remain eligible to hire foreign workers. CRA normally sets monthly payments, and the policy allows deferral in some circumstances.
The policy allows deferral for force majeure, illness or death in the family, and other circumstances beyond your control. It also states that hardship stands in the way of a payment agreement and that declaring hardship after an agreement is made makes the employer ineligible. Negotiate instalments your business can actually carry, with CRA’s own payment arrangement guidance in hand.
Agreement versus arrangement
The policy draws a distinction that matters:
- A payment agreement is reached within the 30 days. It keeps you out of default as long as you comply.
- A payment arrangement is any schedule reached after the 30 days. CRA can agree to one, but you are already in default, and under the policy the default status stays until the AMP and interest are paid in full.
A late deal may stop collection steps, but it will not restore your ability to hire. Call CRA well before day 30.
What happens if you miss an ESDC penalty instalment?
Under ESDC’s policy, you are in default if the AMP is not paid in full by the due date, if no payment agreement is made by then, or if you break the agreement afterward. One missed payment, a partial payment, or a cheque returned for insufficient funds is a breach. Default lasts until the full AMP and interest are paid.
The consequences of default:
- No LMIAs. ESDC must not provide an assessment to an employer in default (IRPR s.203(2)(b)). canada.ca adds that a pending LMIA will not be issued positive and processing fees are not refunded.
- No work permits for jobs with you. An officer must not issue a work permit to a foreign national who intends to work for an employer in default (s.200(3)(h)(iii)). This applies across work permits, not only LMIA-based ones.
- Workers cannot sign on or extend. Foreign nationals must not enter into, or extend, an employment agreement with an employer in default (ss.196.1(b) and 183(1)(b.2)).
- Public listing. Your eligibility status is published on IRCC’s “Employers who have been found non-compliant” page (s.209.997(2)(e)).
- Effect on permanent residence offers. A job offer from an employer in default does not qualify as arranged employment for the Federal Skilled Worker class, or as a qualifying offer for the Federal Skilled Trades class (ss.82(1) and 87.2(3)).
Does interest accrue on an unpaid ESDC penalty?
Yes. Under ESDC’s policy, interest runs on every overdue AMP from the due date, and every payment agreement includes interest. The rate is set under s.5(1) of the Interest and Administrative Charges Regulations and changes over time, so confirm the current CRA posting.
Interest can be waived or reduced under s.9 of those regulations, for example after a postal strike or a bank error. Keep proof of the date you paid.
How does CRA collect an unpaid penalty?
An unpaid AMP is a debt due to the Crown that may be recovered at any time (IRPA s.145(1)(b.1) and (3)). If you are in default, the federal government has several tools.
- Federal Court certificate. The unpaid amount may be certified 30 days after default, or at once if you appear to be avoiding payment, and once registered it has the force of a Federal Court judgment (IRPA s.146).
- Garnishment. The Minister may order anyone who owes you money, such as a customer or your bank, to pay it to the Receiver General instead (IRPA s.147).
- Set-off. Amounts the federal government owes you can be applied against the debt (Financial Administration Act, s.155, as described in the policy).
A write-off is only an accounting step; it does not forgive the debt.
Can you challenge the penalty in Federal Court?
Yes, by an application for leave and judicial review, filed within 15 days after you are notified of or become aware of the decision for a matter arising in Canada (IRPA s.72(2)(b)). A judge may extend time for special reasons (s.72(2)(c)), but do not plan on it.
Under the policy, the AMP stays in collection, interest keeps accruing, and stopping payments under your agreement is a default. Collection stops only if the Court grants a stay or CRA, in special circumstances, suspends it. If you succeed, money is repaid and interest adjusted. Keep your payment agreement in place while you litigate.
Does paying the penalty end a ban?
No. A ban runs from the date of the final determination for the period set in Schedule 2 (IRPR s.209.99(2)), whether or not you have paid. Under the ineligibility policy, you can submit an LMIA one day after the ban ends. If you owe both, you need the ban to end and the AMP to be paid or under a compliant agreement.
Before applying again, check your listing and review our guide to hiring a foreign worker through an LMIA and our hub on employer immigration compliance in Canada.
Frequently Asked Questions
How long do I have to pay an ESDC penalty?
30 days after the notice of final determination is deemed received. The notice is deemed received 10 days after it is sent, so in most cases you have about 40 days from the sending date to pay in full or reach a payment agreement with CRA.
Can I pay a TFWP penalty in instalments?
Yes, if you reach a payment agreement with CRA within the 30-day period. CRA usually sets monthly payments, with interest. A schedule agreed after the deadline does not restore your eligibility.
What happens if I miss one payment under my CRA payment agreement?
Under ESDC’s policy, one missed, partial or bounced payment is a default. You cannot get LMIAs, workers cannot get work permits to work for you, and the default lasts until the full AMP and interest are paid.
If I apply for judicial review, do I still have to pay?
Generally yes. Collection and interest continue unless the Federal Court grants a stay. Stopping payments under your agreement puts you in default.
If you have received a notice of final determination, contact us before the 30 days run out.
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Disclaimer: This article is for general information only and is not legal advice. Immigration law and IRCC/ESDC policy change frequently, and every case turns on its own facts. Reading this article does not create a lawyer–client relationship. Obtain advice tailored to your situation before you act.
Talk to a Canadian immigration lawyer. BridgePoint Law advises individuals and businesses across Canada — and on Canada–US–China cross-border matters — on employer immigration compliance and LMIA. Book a consultation with our team in Toronto and Kingston. We work in English, Mandarin, and Cantonese.