What is a Notice of Assessment and Why Do Lenders Care?

When you file your taxes in Canada, the Canada Revenue Agency (CRA) reviews your return and sends you a document called a Notice of Assessment (NOA). Think of it as the CRA's official report card on your tax filing. It confirms the income you declared, shows any refunds or balances owing, and details your RRSP deduction limit.

For a car loan, the most important part of your NOA is that it's an official, government-verified record of your income. When a lender asks for it, they're not trying to be nosy about your tax refund; they're looking for a trustworthy way to confirm that you earn what you say you earn. This is especially important for people who don't have traditional pay stubs.

Who Typically Needs an NOA for a Car Loan?

While not everyone is asked for their NOA, it's a common request for certain types of income earners. You'll likely need to provide one if you are:

• Self-Employed or a Business Owner: Your income isn't a simple salary. The NOA provides a clear picture of your total declared income over a year.
• A Gig Worker or Freelancer: If you drive for Uber, deliver for SkipTheDishes, or do freelance work, your income can fluctuate. Lenders often look at the last two years of NOAs to see an average and confirm stability.
• Commission-Based Salespeople: Your paycheques can vary wildly. An NOA shows the big picture of your annual earnings, smoothing out the highs and lows.
• Someone with Multiple Part-Time Jobs: Instead of collecting pay stubs from several employers, an NOA neatly summarizes your total income from all sources.

If you're a salaried employee with a full-time job (a T4 employee), lenders will usually just ask for recent pay stubs and a letter of employment. But having your NOA handy is never a bad idea.

How Your NOA Strengthens Your Application

Providing your Notice of Assessment isn't just a hurdle to jump over; it can actually make your application stronger. It acts as undeniable proof of income, directly from the most reliable source possible: the Canadian government.

It tells the lender that you are up-to-date with your taxes and are transparent about your financial situation. For self-employed individuals, it's often the single most important document for proving you can afford the loan payments.

What if My NOA Shows I Owe Taxes?

This is a common worry, but it's usually not a deal-breaker. Lenders are primarily interested in your total income, which is found on Line 15000 (Total Income) of your assessment. They want to see that this number is high enough to support the car loan you're applying for.

While a large, unpaid tax debt could be a red flag, a simple balance owing that you have a payment plan for is rarely an issue. The key is the income figure, not the tax balance.

How to Get Your Notice of Assessment

Finding your NOA is simple. You have two main options:

1. Online via CRA My Account: This is the fastest way. Log in to your secure CRA My Account portal. You can view and download PDF copies of your assessments from current and previous years.
2. By Mail: The CRA mails a paper copy of your NOA to you every year after you file your taxes. If you keep good records, you likely have it filed away with your other tax documents.

When a lender asks for your NOA, they are looking for this official document. A simple T4 slip isn't the same thing, as the NOA is the final, processed summary of your entire tax situation for the year.