What Is the Statute of Limitations on Debt in Canada?

When is a consumer unable to take advantage of a limitation period?

A consumer cannot take advantage of the passage of time in connection with the following categories of debt:

1. Monies owing to the government
2. Child Support or Spousal Support
3. Secured Debt (Judgments against you, car loans, mortgages, liens against your real property)

Why do limitation periods exist?

Limitation periods exist because governments want certainty in the marketplace. They place pressure on creditors to sue within a set time period. A creditor who doesn't sue before the limitation period expires might not recover a penny.

What are the limitation periods for unpaid accounts across Canada?

Every province and territory in Canada has a specific law dealing with limitation periods.

Here is a summary of limitation periods across Canada for unpaid accounts:

2 years: Alberta, B.C, Manitoba, New Brunswick, Nova Scotia, Ontario, and Saskatchewan

3 years: Quebec

6 years: Newfoundland and Labrador, NWT, Nunavut, P.E.I, and Yukon

Limitation periods for unpaid consumer accounts

Provincial and territorial laws

*Prior to September 30, 2022, the limitation period for Manitoba residents was six years. Source: Manitoba – The Limitations Act, SM 2021, c. 44

With the exception of Quebec, every Canadian province and territory is a common law jurisdiction where the English common law, subject to any statutory changes, is the foundation for law.

Unlike Canada's common law jurisdictions, the law in Quebec is based upon what is known as the Civil Code of Quebec. Under the Civil Code of Quebec, there is no reference to limitation periods. There are, however, references to prescriptions. The Civil Code of Quebec provides that a creditor should sue a consumer within three years.

There is no federal statute of limitations for consumer debt

Some websites claim there's a federal six-year statute of limitations on debt collection in Canada. That's wrong for private consumer debts like credit cards and personal loans.

The confusion comes from Section 32 of the Crown Liability and Proceedings Act. That section sets a six-year limit for legal proceedings by or against the federal Crown.

Section 32 does not apply to debts between you and a private creditor.

Source: Crown Liability and Proceedings Act, R.S.C. 1985, c. C-50, s. 32

When does the clock begin to run on a limitation period?

Calculating the exact date when a limitation period begins to run is not an exact science.

Here is the best advice for a layman in terms of knowing when the clock on a limitation period begins to run.

A limitation period begins to run sometime between (1) the date of your last payment, and (2) 90 days after the date of last payment. If you never made a payment, the clock starts on the day the payment first became due.

What resets the statute of limitations?

Before the expiry of a limitation period, there are two actions that a consumer can potentially take that will result in the clock on a limitation period restarting:

1. Written acknowledgement of a debt
2. Partial payment

A consumer cannot restart the clock on a limitation period after it has expired.

The clock on a limitation period is reset in circumstances where a consumer makes a written acknowledgement of a debt. A verbal acknowledgement of a debt is not sufficient to restart the clock on a limitation period. For example, if a consumer speaking to a collector on the phone admits owing a debt, this verbal admission does not restart the clock on a limitation period.

Before the limitation period expires, every partial payment you make restarts the clock.

If your goal is to take advantage of the expiry of a limitation period, you should avoid making any payments to the creditor or their collection agent. The risk is that not paying might encourage the creditor to sue you before the deadline.

What does not restart the clock?

A collection agency calling you does not reset the limitation period. Receiving a letter doesn't reset it. Being contacted by a new collection agency or a debt purchaser doesn't reset it either.

The debt changing hands from your original creditor to a collection agency does not start a new limitation period. The clock runs from your last payment or acknowledgment, regardless of who owns the debt.

What happens after the limitation period expires?

Except for the residents of Newfoundland and Labrador, the expiry of a limitation period does not extinguish a debt. If you are sued after the limitation period has expired, you can file a Defence with the court and plead the expiry of the limitation period as a complete defence. If you do, the creditor cannot successfully sue you.

An example will help illustrate this.

Benjamin lives in Ontario. He stopped making any payments on his one credit card more than three years ago. The 2-year limitation period under Ontario's Limitations Act, 2002, has expired. Benjamin's creditor has sued him on his unpaid credit card debt after the expiry of Ontario's 2-year limitation period. Benjamin must file a Defence in a timely manner and expressly plead the expiry of Ontario's 2-year limitation period as set out section 4 of the Ontario Limitations Act as a full and complete defence. If Benjamin does so his creditor will not be able to successfully sue him. If Benjamin fails to do so Benjamin's creditor will obtain a default judgment against him.

Newfoundland and Labrador is the only province where its limitation law expressly provides that a debt is extinguished upon the expiry of a limitation period.

If you are sued after the expiry of a limitation period then the prudent course of action is to file a Defence in a timely manner and to expressly plead the expiry of your province or territory's limitation period as a full and complete defence. If you don't, the court enters a default judgment, which gives the creditor the power to garnishee your wages, freeze your bank accounts, and register a lien against your real property.

How collections affect your credit report

A debt sent to collections gets an R9 rating on your credit report. R9 is the worst possible rating. It tells lenders you didn't pay.

With one exception, that R9 stays on your credit report for six years from the date of first delinquency on the account. That's typically the date the account went to collections, not the date of your most recent payment.

Source: Equifax Canada – How long does information stay on my credit report?

With the exception of Ontario, the law across Canada is that a delinquent account can remain on your credit report for six years. Under the Ontario Consumer Reporting Act, an unpaid account can remain on your credit report for seven years.

There are two credit reporting agencies in Canada, Equifax Canada and TransUnion. If you are an Ontario resident and your unpaid account has been reported to TransUnion, it will remain on your credit report for seven years. In contrast, Equifax Canada removes delinquent items from a consumer's credit report after six years, even if you are an Ontario resident.

Paying the collection agency doesn't remove the entry. It changes the status to "paid," which looks better than "unpaid." But the record stays for the entire period.

Source: Financial Consumer Agency of Canada – How long information stays on your credit report

That credit report timeline runs independently of the limitation period where you live.

You can get a free copy of your credit report from Equifax Canada and TransUnion Canada. Check the public records and collections sections.

If you see a debt you don't recognize, dispute it with the credit bureau in writing.

Government debts have different rules

Provincial limitation periods apply to unsecured consumer debts like credit cards, personal loans and utility bills. Government debts follow their own rules.

CRA collection time limits

As of April 2026, the Canada Revenue Agency has the following collection limitation periods:

Source: Canada Revenue Agency – How long a debt can be collected by the CRA and Canada Student Financial Assistance Act, s. 16.2

CRA powers private creditors don't have

The CRA can garnishee your wages and freeze your bank account without going to court. The CRA can also register a lien on your property through a Federal Court certificate without suing you first.

Source: Canada Revenue Agency – Putting a lien on or seizing your assets

Deemed trust on payroll and GST/HST

For payroll source deductions and GST/HST you collected but didn't remit, the CRA holds a deemed trust. The money is legally considered to belong to the Crown. The CRA doesn't need to register anything to claim it.

Source: Canada Revenue Agency – Information on deemed trust

Frequently asked questions

When can a Canadian avoid paying a debt due to the passage of time?

When the limitation period in your province has expired and you haven't reset it by making a payment or acknowledging the debt in writing. The limitation period ranges from two to six years, depending on your province.

If a creditor sues you after the expiry of a limitation period it is important that you file a timely defence in which you expressly plead the expiry of your province or territory's limitation period as a full and complete defence. If you do, then you should anticipate that you will win this lawsuit.

Can a debt collector restart the limitation period without my knowledge?

A collection agency can't restart the limitation period on its own. Only your actions reset it, and only while the limitation period is still running.

Making a payment or acknowledging the debt in writing before the deadline resets the clock. After the limitation period expires, it stays expired.

A collection agency calling you, sending letters, or selling the debt to another company doesn't affect the limitation period.

Does bankruptcy eliminate debts past the limitation period?

As a general rule, bankruptcy eliminates most unsecured debts regardless of whether the limitation period has expired.

Under federal bankruptcy law, a bankrupt's creditors are supposed to list a bankrupt's "provable claims" with the Licensed Insolvency Trustee responsible for the bankruptcy, and these debts will be extinguished under a bankruptcy.

A 2021 Ontario Superior Court bankruptcy case, John Trevor Eyton (Re), however, has created headaches because it held that where a limitation period has expired with respect to a specific debt, that debt is not eligible to be a "provable claim" under a bankruptcy. As a result of this court case, debts which are unable to be listed as "provable claims" due to the expiry of a limitation period are not extinguished under a bankruptcy, and consumers continue to receive collection calls with respect to these debts.

In this scenario, a consumer might want to take advantage of a "cease and desist" letter available under provincial or federal law to stop collection calls. They might also want to consider taking advantage of a number of strategies for avoiding collection calls.

If the limitation period on your debt has already passed and you have no income or assets, bankruptcy is usually unnecessary.

Talk to a Licensed Insolvency Trustee before making that decision.

How do I find out when my limitation period started?

Check the date of your last payment to the creditor or collection agency. If you never made a payment, the limitation period starts from the date the debt became due.

Your credit report shows the date of last activity, which is a good starting point. Request your free credit report from Equifax Canada or TransUnion Canada.

Does paying a collection remove the R9 from my credit report?

No. Paying a collection changes the status to "paid" but doesn't remove the entry. The R9 stays on your credit report for six years from the date of first delinquency, whether you pay it or not.

Can I be arrested for not paying a debt in Canada?

Subject to one exception, the answer is no. Unpaid debt is a civil matter in Canada, not a criminal one.

If you owe money to a creditor, that creditor might sue you and obtain a judgment against you, in which case your creditor is now a judgment creditor. A judgment creditor can ask the court to order a Judgment Debtor Examination, at which time you will be required to meet the judgment creditor's representative and answer questions under oath. If you were to fail to show up to a Judgment Debtor's Examination, you could be jailed for Contempt of Court.

A creditor or collection agency can sue you, but you can't be jailed for owing money. If a collection agency threatens you with arrest, that's a violation of provincial debt collection rules.

If a collection agency is breaking the rules or contacting you about a debt you don't owe, file a complaint with the consumer protection office in your province.