Debt Write-off Regulations, 1994 (SOR/94-602)

Short Title

1 These Regulations may be cited as the Debt Write-off Regulations, 1994.

Interpretation

2 In these Regulations,

Act

Act means the Financial Administration Act; (Loi)

debt

debt means a debt or an obligation due to Her Majesty or a claim by Her Majesty; (créance)

in writing

in writing includes any electronic form that is capable of being reproduced in intelligent, written form within a reasonable time. (par écrit)

Application

3 These Regulations do not apply to

• (a) the determination of, or resolution of disputes over, what amount of a debt is owing;

• (b) the process of negotiating and settling claims by Her Majesty; and

• (c) debts owing to Crown corporations.

Authority to Write Off Debts

• 4 (1) Subject to subsection 25(2) of the Act and sections 5 and 6 of these Regulations, the appropriate Minister of a department, or an officer authorized by that Minister in writing, may write off from the accounts of the department a debt, or a part of a debt, that has been determined to be uncollectible.

• (2) Subject to subsection 25(2) of the Act and section 5 of these Regulations, the appropriate Minister of a department, or an officer authorized by that Minister in writing, may write off from the accounts of the department a debt for which further administrative expense or other costs of collecting the debt are not justifiable in relation to the amount of the debt or the probability of collection.

• (3) Subject to subsection 25(2) of the Act, the appropriate Minister of a department, or an officer authorized by that Minister in writing, may write off from the accounts of the department

  • (a) the balance of a future debt or a debt not due that remains after payment of the present value of the debt has been accepted as full settlement of the debt; or

  • (b) the balance of a debt that remains after a compromise settlement has been effected pursuant to an applicable authority.

• 5 (1) No accountable advances or other debts arising from the overpayment by Her Majesty of salaries, wages or employment-related allowances, or any part of any of them, shall be written off without the approval of the Treasury Board.

• (2) Subsection (1) does not apply to debts owing by former employees that are discovered after their employment has terminated and all termination benefits have been paid.

Criteria

6 No debt, or any part of a debt, shall be written off from the accounts of a department under subsection 4(1) unless

• (a) all reasonable collection action has been taken and all possible means of collection have been exhausted;

• (b) there is no possibility now or in the foreseeable future of collection through set-off; and

• (c) the appropriate Minister, or the officer referred to in section 4, is satisfied on reasonable grounds that

  • (i) the debtor is not resident in Canada, there are no apparent means of collecting the debt and there is no evidence that the debtor has a family or business concerns in Canada that could lead the debtor to return to Canada,

  • (ii) the debtor cannot be located,

  • (iii) evidence of the debt has been lost or destroyed and the debtor denies that a debt exists,

  • (iv) legal proceedings are statute-barred or the debt is otherwise legally unenforceable, the debtor has refused to pay and there are no apparent alternative means of enforcing payment or collecting the debt,

  • (v) the debtor is a corporation and the corporation is inoperative and without assets,

  • (vi) the debtor is an undischarged bankrupt corporation and

    • (A) the corporation is without assets and the trustee has been discharged, or

    • (B) the trustee has confirmed in writing that the trustee does not foresee any further payments to Her Majesty,

  • (vii) the debtor is an undischarged bankrupt individual and

    • (A) the trustee has been discharged, or

    • (B) the trustee has confirmed in writing that the trustee does not foresee any further payments to Her Majesty,

  • (viii) the debtor is deceased and there is no known estate, or

  • (ix) the debtor

    • (A) is incapable of repaying the debt, in whole or in part, as evidenced, among other things, by the debtor’s family income level being below the net monthly income level requiring payments from income toward debts, as stated in the guidelines on payments required from income issued periodically by the Superintendent of Bankruptcy,

    • (B) is not reasonably expected to have the capacity to repay the debt in the foreseeable future, and

    • (C) does not own or have an interest in mortgageable real or personal property, has not entered into a contract to purchase property under the Veterans’ Land Act and does not own financial assets that could be applied toward discharging the debt, in whole or in part.

Procedures for the Control and Writing Off of a Debt

7 All debts shall be controlled within the appropriate department’s accounts until they are either collected or written off.

• 8 (1) The appropriate Minister of each department or the deputy head on behalf of the Minister shall establish a formal review process for the writing off of debts, in whole or in part, under subsections 4(1) and (2).

• (2) Where an amount exceeding $25,000, or such lower amount as may be fixed by the appropriate Minister or the deputy head, is proposed to be written off, the matter shall be referred to a review committee established pursuant to subsection (1), which committee shall make recommendations on the proposed write-off to the appropriate Minister or the officer referred to in section 4.

• (3) A review committee shall consist of at least three public officers, at least one of whom shall not have been involved in the creation or establishment of the debt that is proposed to be written off or in any action taken to collect it.

Retention of Information and Records

9 Any information or records concerning a debt that is written off pursuant to these Regulations shall be retained until

• (a) all audit procedures are completed and other administrative requirements with respect to the debt and its write-off are satisfied; and

• (b) in addition, in the case of a debt referred to in subsection 4(1),

  • (i) there is no longer any probability of future set-off, and

  • (ii) the limitation period for initiating any legal action with respect to the determination of the amount or recovery of the debt has expired.