Managing accounts receivable in Canada requires more than a standard outreach strategy. The Canadian market is governed by a patchwork of federal and provincial regulations that prioritize consumer privacy and fair treatment. For businesses operating in Current, staying updated on shifting interest caps and new federal health benefits is essential to maintaining cash flow without risking legal penalties.
The Federal Foundation: The Bank Act & Criminal Code
While most collection rules are provincial, federal law sets the absolute ceiling for what is legal across the country.
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The Bank Act: This act governs all federally regulated banks. It mandates “Responsible Business Conduct,” meaning banks and their representatives cannot use threatening or coercive language. They are also strictly limited in contacting a debtor’s family or employer—usually only once to confirm location—unless explicit consent is given.
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New 2025 Interest Rate Cap: As of January 1, 2025, Canada significantly lowered the “criminal interest rate.” The previous effective annual rate of 60% has been reduced to a 35% Annual Percentage Rate (APR). Offering or advertising credit above this rate is now a criminal offense, and collection efforts on debt with “usurious” interest can be legally challenged.
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Payments Canada & The RPAA: New regulations under the Retail Payment Activities Act (RPAA) in late 2025 have increased oversight on payment service providers. This ensures that when debt is paid electronically, the funds are safeguarded and handled with higher transparency than in previous years.
Provincial Legislation: A Region-by-Region Breakdown
Because the day-to-day “rules of the road” are determined provincially, a recovery strategy must adapt as it crosses provincial borders.
Ontario: Collection and Debt Settlement Services Act
Ontario is a highly regulated environment requiring all agencies and individual collectors to be registered with the province.
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The 6-Day Rule: Agencies must send a written notice and wait 6 days before the first phone call.
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Contact Limits: Successful contact is limited to three times in a seven-day period.
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New for 2026: Increased administrative penalties now allow the Registrar to levy significant fines against agencies that use “unregistered” collectors or misleading “legal-looking” documents.
British Columbia: Business Practices and Consumer Protection Act
BC law emphasizes transparency through the Debt Collection and Repayment Regulation.
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Written Disclosure: Before any verbal contact, a collector must provide a written notice with a full breakdown of the amount owing.
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No-Cost Contact: Collectors cannot contact a debtor in any way that costs the debtor money (such as collect calls or specific cellular data charges).
Alberta: Consumer Protection Act & Fair Trading Act
Alberta combines the Fair Trading Act with the Collection and Debt Repayment Practices Regulation.
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Prohibited Hours: Contacts are restricted to 7:00 AM – 10:00 PM (Mon–Sat) and 1:00 PM – 5:00 PM on Sundays.
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Dispute Cease-Fire: If a debtor notifies an agency in writing that the debt is in dispute and they wish to be taken to court, the agency must stop all collection activity immediately.
Quebec: An Act Respecting the Collection of Certain Debts
Quebec’s Civil Law system is unique.
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Physical Presence: Agencies must have an office in Quebec to collect consumer debt.
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Written-Only Request: A debtor can request in writing to be contacted only in writing. This must be honored for three months.
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Bill 72 (2024/2025): New stricter consumer lending rules require more transparent disclosure of credit limits and prohibit certain “tipping” prompts or unsolicited credit offers during the debt reconciliation process.
Medical & Dental Debt: The 2026 Shift
The nature of medical debt in Canada has changed due to the rollout of the Canadian Dental Care Plan (CDCP) and the National Pharmacare Act.
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The “Co-Payment” Trap: While the CDCP covers millions of Canadians as of Current, it often only covers a portion of the fee grid. Patients with household incomes between $70k and $90k are responsible for 40% to 60% co-payments. This has created a surge in “micro-debts” for dental practices that were previously unaccustomed to collections.
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Pharmacare & Uninsured Services: With the expansion of free contraception and diabetes medications in many provinces, medical debt is shifting toward “ancillary” costs like delivery fees, prescribing fees, or non-covered specialized medications.
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Privacy Standards: Provincial acts like Ontario’s PHIPA or Alberta’s HIA remain the “gold standard.” A collector can see that a balance is owed to a clinic, but they are legally barred from knowing what the treatment was.
Statute of Limitations & The “Reset” Rule
In most provinces (ON, BC, AB), the window to sue for a debt is 2 years from the date of the last payment or written acknowledgement.
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The “Reset”: If a debtor makes even a $1 payment or sends a text/email acknowledging the debt, the 2-year clock restarts.
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Post-Statute Ethics: Even if the 2-year window has expired, the debt still exists. However, the Current 2026 guidelines emphasize that threatening legal action on an expired debt (time-barred debt) is a major regulatory violation.
Frequently Asked Questions
Can a collector call my mobile phone?
Yes, but if you inform them that you are being charged for the call or that it is a workplace-issued phone, they must offer an alternative method of communication in most provinces.
What happens if I live in a different province than the creditor?
The laws of the province where the debtor resides generally apply. If a BC company is collecting from an Ontario resident, they must follow Ontario’s 6-day notice rule and contact frequency caps.
Are robocalls legal for debt collection?
Under CRTC (Telecommunications Act) rules, automated “ADAD” calls for the purpose of solicitation are strictly regulated. While debt collection has some exemptions, many provinces require a “live” person to be available immediately upon the debtor answering.