The answer is yes. Tax debts are generally included in a bankruptcy or proposal.
Most people do not realize that tax debt (Revenu Québec and the CRA) are treated just like credit card debt, lines of credit, etc. In fact, a significant proportion of bankruptcies in Quebec and Canada include tax debts.
However, take note that your tax debts may not be dischargeable if it is a case of fraud or a fine. Otherwise, interest and penalties on your legitimate tax debts can be included in a bankruptcy or a consumer proposal.
If your tax debts represent more than $200,000 (principal, interest and penalties included) or more than 75% of your total debt, you will not get an automatic discharge and you must attend a hearin. This extra step is to prevent abuse of the insolvency system. (Read the article from the Law)
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