The sixty-second answer
Three years for individuals and Canadian-controlled private corporations, four for other corporations and mutual fund trusts. The clock runs from the earlier of the day the original notice of assessment was sent and the day of an original notification that no tax is payable, not from the day you filed. The period can be reopened for misrepresentation attributable to neglect, carelessness or wilful default, for fraud, or where you filed a waiver. A reopened year can only be reworked to the extent it relates to the reason it was reopened.
Two periods, set by what you are
Subsection 152(3.1) defines the normal reassessment period, and it splits on the taxpayer's character [1].
Paragraph (a) covers a mutual fund trust, or a corporation other than a Canadian-controlled private corporation, and gives four years. Paragraph (b) is the catch-all and gives three years, which is where individuals, trusts generally and CCPCs land [1].
The practical reading for a small business is three years, because the owner is an individual and the company, if there is one, is usually a CCPC. But the classification is made on the facts, and a corporation that ceases to be Canadian-controlled moves into the longer window.
The clock does not start when you file
This is the detail that trips people, and it is stated plainly in the provision. The period ends three or four years after the earlier of the day of sending of a notice of original assessment, or the day of sending of an original notification that no tax is payable [1].
So the trigger is the CRA's assessment, not your filing. For a return filed on time and assessed a few weeks later, the difference is immaterial. For a return filed three years late, it is not: the assessment is late, so the clock starts late, and the year stays open long after the owner assumes it closed.
The second limb matters too. A notification that no tax is payable also starts the clock. A nil year is not an unassessed year.
What reopens a closed period
Subsection 152(4) is drafted in a way that reads backwards at first. It opens by saying the Minister may at any time make an assessment, reassessment or additional assessment. The limitation bites in the words that follow: past the normal reassessment period, such action may be taken only if one of the listed conditions is met [1].
The two that matter most for an ordinary business sit in paragraph (a).
Misrepresentation or fraud. Subparagraph (a)(i) applies where the filer has made any misrepresentation attributable to neglect, carelessness or wilful default, or has committed any fraud in filing the return or in supplying any information under the Act [1].
Those are separate limbs. The misrepresentation branch does not require dishonesty; neglect and carelessness are enough. And the fraud branch reaches not only the return but any information supplied under the Act.
A waiver. Subparagraph (a)(ii) applies where the filer has filed with the Minister a waiver in prescribed form within the normal reassessment period for the year [1]. Timing is the whole point of that clause. A waiver has to land while the window is still open; it cannot revive a closed one.
Beyond paragraph (a), subsection 152(4) lists a long series of further triggers with their own extended periods, tied to non-arm's-length dealings with non-residents, foreign affiliate amounts, unreported specified foreign property, real property dispositions, tax shelters and reportable or notifiable transactions [1]. Those extend the window rather than remove it.
A reopened year is not reopened at large
This is the most useful thing to know and the least widely known. Subsection 152(4.01) confines what a reopened reassessment may do. Where subsection 152(4)(a) applies, the reassessment may be made to the extent that, but only to the extent that, it can reasonably be regarded as relating to the misrepresentation or fraud relied on, or to a matter specified in a waiver filed for the year [1].
So a year reopened because of one mischaracterised expense is open on that expense. It is not a general invitation to revisit everything else in the year.
The same logic makes a waiver less alarming than it sounds, provided it is drafted narrowly. A waiver-based reopening is confined to the matters the waiver names.
Waivers can be withdrawn
A waiver is not permanent. Subsection 152(4.1) provides that where the Minister's only footing is a waiver filed under 152(4)(a)(ii), or under paragraph (4)(c) or (c.1), no reassessment may be made after the day that is six months after a notice of revocation of the waiver in prescribed form is filed [1].
Revoking therefore sets a six-month runway rather than closing the door immediately. That is still a defined end point, which is the practical value of it.
Records outlast the reassessment period
It is tempting to treat three years as the retention horizon. It is not, and the two rules are independent.
Subsection 230(4)(b) requires records to be kept until six years from the end of the last taxation year to which they relate [2]. That obligation does not shorten because a year has closed to reassessment.
And disputing an assessment extends the obligation rather than ending it. Subsection 230(6) requires retention while an objection or Tax Court appeal is outstanding, until appeal rights lapse or the matter is disposed of [2].
The objection clock is a different clock
Reassessment periods run against the CRA. Objection deadlines run against you, and they are much shorter.
Under paragraph 165(1)(a), an individual other than a trust, and a graduated rate estate, may object by the later of one year after the filing-due date for the year and 90 days after the day of sending of the notice of assessment [3]. Everyone else, including corporations, gets only the 90 days under paragraph 165(1)(b) [3].
That asymmetry is worth internalising. The CRA's window is measured in years. A corporation's window to disagree is measured in days from a letter.
Why this argues for keeping the evidence attached
The awkward shape of all this is that the challenge arrives years after the record-keeping decision that determines whether you can answer it. Three or four years on, the person who made the entry may be gone, and the reasoning behind a classification usually is.
What survives is documentation, and only if it remained connected to the figure it supports. This is the case for assembling a return from live records rather than from a spreadsheet of totals. In MapleTax, the figures come from receipts held in MapleExpense and invoices issued through MapleInvoice, so the support for a line is retrievable on the same basis years later as on the day it was filed.
That does not stop a reassessment. It changes it from a reconstruction into a retrieval, which is the difference between an expensive problem and an administrative one.