Debt Collection Laws in Quebec (and Canada)

Federal vs Provincial Jurisdiction

In Canada, debt collection is governed by a mix of federal and provincial laws. The federal Interest Act and Criminal Code set baseline rules, while each province has its own legislation governing collection practices.

This means the rules can differ significantly between Quebec (civil law) and common law provinces like Ontario, British Columbia, or Alberta.

Quebec: Key Rules Under the Civil Code

Quebec operates under a civil law system based on the Civil Code of Quebec (CCQ). Here are the key provisions affecting debt collection:

Prescription (Limitation) Periods

The prescription period is the time limit within which you must take legal action to collect a debt:

• 3 years for most commercial and contractual debts (art. 2925 CCQ)
• 3 years for professional services
• 1 year for bodily injury claims
• 10 years for debts acknowledged by a court judgment

Interest Rates (art. 1617 CCQ)

If your contract doesn't specify an interest rate, Quebec's legal interest rate applies. The rate is set annually by government regulation. Contractually agreed-upon rates are enforceable as long as they don't exceed the criminal rate (60% per year under the Criminal Code).

For more on calculating interest, see our guide: How to Calculate Late Payment Interest in Canada.

Consumer Protection (for B2C)

If you're collecting from consumers (B2C), Quebec's Consumer Protection Act and the Act respecting the collection of certain debts impose additional restrictions:

• Collection agents must be licensed by the Office de la protection du consommateur (OPC)
• You cannot contact debtors before 8 AM or after 9 PM
• You cannot contact debtors at work if they ask you not to
• You cannot use threats, harassment, or misleading statements
• You cannot contact third parties except to obtain the debtor's contact information

Other Canadian Provinces

Each province has its own legislation. Here's a quick overview of limitation periods:

Federal Rules That Apply Everywhere

• Interest Act: Interest rates must be expressed as an annual rate. Failing to do so limits you to 5% per year.
• Criminal Code (s. 347): Charging more than 60% annual interest is a criminal offence.
• PIPEDA: You must handle debtor personal information in accordance with privacy legislation.

Small Claims Court

If a debtor refuses to pay despite your collection efforts, small claims court is often the most cost-effective legal remedy for SMBs:

• Quebec: Small Claims Division handles claims up to $15,000. No lawyers allowed — you represent yourself.
• Ontario: Small Claims Court handles claims up to $35,000.
• British Columbia: Civil Resolution Tribunal handles claims up to $5,000 online; Small Claims up to $35,000.

Best Practices for Legal Compliance

1. Document your terms — include late payment interest rates and collection terms in contracts before work begins.
2. Keep records of everything — every invoice, reminder, and communication with the debtor.
3. Be professional — even when a client is being difficult. Courts look unfavorably on aggressive or harassing behavior.
4. Know your deadlines — don't let the limitation period expire before taking action.
5. Act quickly — the probability of collecting decreases significantly after 90 days.

How AIDebtCollection.Net Helps You Stay Compliant

AIDebtCollection.Net is designed with Canadian and US collection laws in mind:

• Professional communication templates that comply with best practices
• Automatic interest calculation with clearly stated annual rates
• Complete evidence trail — emails, SMS, call transcripts, signed agreements
• Contact hour compliance — reminders are sent during appropriate hours
• Payment agreements with electronic signatures, timestamps, and IP addresses