Statute of Limitations on Debt in Canada by Province and Territory

A limitation period is the time a creditor has to sue you for an unpaid debt. Once it has passed, the creditor or a collection agency can’t get a court judgment, so it can’t garnish your wages or seize assets through the courts. The debt itself doesn’t disappear: collectors can still ask you to pay, and it can stay on your credit report until the bureau’s reporting period ends. Each province and territory sets its own period in its own law. This page lists them, explains when the clock starts and what restarts it, and covers what collectors can and can’t do afterwards. The debt strategies hub lists the other guides.

Limitation periods by province and territory

Which province’s law applies can depend on where you lived and on the terms of the agreement; a lawyer can say which applies if you’ve moved.

When the clock starts

For a consumer debt, the period generally runs from the day the creditor knew or ought to have known it had a claim, which in practice is usually the missed payment or default that wasn’t made good. Under the modern “discoverability” acts (Ontario, B.C., Alberta and others) that is the starting point for the basic 2-year period. Ontario and British Columbia also have an ultimate period of 15 years, after which a claim is barred whatever the creditor knew.

What restarts the clock

The two actions that commonly restart a limitation period on a debt are:

• a payment, including a small partial payment, which in many provinces is treated as acknowledging the debt;
• a written acknowledgment that you owe it, signed by you.

The rules on what counts differ between provinces. British Columbia, for example, requires the acknowledgment to be in writing and signed, and a verbal promise generally doesn’t restart the period in the common-law provinces. Quebec’s Civil Code works differently: an acknowledgment of the debt or a court claim interrupts the 3-year period.

Some things don’t restart it:

• a collector phoning you or sending letters;
• the debt being sold to another agency (the new owner inherits the old dates);
• you disputing the debt;
• the creditor reporting the account to a credit bureau.

This is why a collector calling about an old debt may ask for a small “good faith” payment or a signed confirmation. Before paying or signing anything on an old debt, checking the date of the last payment against the table above shows whether the period has already run.

After the limitation period expires

A lawsuit filed after the period isn’t automatically thrown out: the limitation period is a defence that you raise in your response to the claim. Responding to any court claim by its deadline matters even when the debt is old. The provincial rules on how collectors may contact you, and how to make them stop, are covered in debt collection rights in Canada.

Limitation period vs credit reporting period

These are separate clocks. The limitation period, set by provincial law, controls whether you can be sued. The credit reporting period, set by Equifax and TransUnion, controls how long the account stays on your report and isn’t extended by the limitation rules. An old debt may drop off your credit report before the limitation period ends, or stay on it after.

Debts with different rules

• Taxes and other debts to the CRA aren’t covered by provincial limitation periods: the federal government has its own collection periods and can collect without going to court. What happens if you don’t pay the CRA covers CRA collections.
• Federal student loans are collected under federal law, with the CRA taking over loans in default; see what happens if you can’t pay your student loan.
• Secured debts work differently: a lender with security can take the property, and the limitation period mainly affects a claim for any shortfall after the property is sold.
• Court judgments last much longer than the original debt, so once a creditor has a judgment, the original limitation period no longer protects you.

Responding to a collector about an old debt

1. Ask for the details in writing: the original creditor, the account number, the amount, and the date of the last payment.
2. Avoid paying or signing anything that acknowledges the debt until you’ve checked the dates.
3. Compare the date of the last payment with your province’s period.
4. If the period has passed, a short written reply stating that the debt is statute-barred under your province’s law, and asking the collector to stop contacting you, puts your position on record; keep a copy and proof of sending.
5. If you’re unsure, a legal clinic, a lawyer, or a free session with a non-profit credit counsellor can help before you respond.

If the debt is within the period and you want to deal with it, how to negotiate debt covers settlements and written agreements.

Leaving Canada with debt

Moving to another country doesn’t cancel Canadian debts. It makes some of them harder for creditors to collect, but the debts remain owed, interest keeps adding up, and the damage stays on your Canadian credit report for anyone who comes back. Some creditors, the CRA above all, can still reach money in Canada and, in some countries, abroad. This page goes through what happens to each kind of debt, what creditors can do across borders, and what to deal with before leaving. The debt strategies hub lists the other debt guides.

What happens to each kind of debt

Tax debt and the CRA

The CRA is the creditor with the most reach. It doesn’t need a court order to collect, so it can take Canadian employment or pension income, rental income, a bank account in Canada, a tax refund or a federal benefit payment. Some of Canada’s tax treaties include an assistance-in-collection article; in the Canada–US treaty it’s Article XXVI A, which lets the CRA ask the US to collect a Canadian tax debt. What happens if you don’t pay the CRA covers the CRA’s collection steps.

Interest is the other reason tax debt doesn’t fade. The CRA charges interest on overdue amounts, compounded daily, at a rate it sets each quarter.

Student loans

Federal student loans that go unpaid end up with the CRA, which collects them like tax debt, including by keeping tax refunds. Repayment help, such as the Repayment Assistance Plan, depends on applying and keeping the account in good standing, so it’s worth arranging before leaving rather than after a default. What happens if you can’t pay your student loan covers the default process.

Credit cards, loans and collections

Banks and collection agencies have limited practical reach once you’ve moved: suing someone abroad and enforcing a Canadian judgment in another country is slow and costly, so it’s mostly done for large balances. The debt still exists, though. It can be sold to a debt buyer, collectors can keep contacting you, and if you return, the creditor can sue in Canada within the limitation period and enforce against Canadian wages and assets. Each province sets its own limitation period, and the rules on when it pauses or restarts vary; limitation periods on debt by province has the details. How credit card debt can be paid down before a move is covered in the credit card guides.

Your Canadian credit report

Canadian credit reports don’t transfer to other countries, so you’ll usually build credit from scratch where you move. The Canadian file stays, though: late payments and collection accounts remain on your Equifax and TransUnion reports for years and will be there if you come back to rent, borrow or get a mortgage.

Before you leave

1. File every outstanding tax return, and work out your departure-year taxes, including any departure tax on assets; the leaving Canada tax checklist covers the steps.
2. Set up payment arrangements with each creditor you can’t pay in full before going, including the CRA (payment arrangements for taxes owed).
3. Arrange student loan repayment or assistance while you’re still in good standing.
4. Keep a Canadian mailing address and contact details current so notices reach you.
5. Consider the formal options if the debt can’t be repaid: a consumer proposal filed through a Licensed Insolvency Trustee can settle debts such as cards, loans and income tax owed to the CRA, and stops collection once filed; consumer proposal vs bankruptcy explains both processes and the debts they don’t cover.

The debt relief options guide compares every route, from a payment plan to the legal processes.

Related pages

• Line of Credit Calculator Canada