So Johnny, let's just clear the air once and for all.

In your last post you stated "Let me guess. You work for Scotiabank, GSLAC, or NSLSC, right?" Nothing could be further from the truth. I am not employed by or have I ever been associated with these organizations and your arrogance to suggest that I am either employed by or associated with these organizations is a true reflection of your business acumen and personal character.

I have never been employed by or associated with any bank or financial institution in Canada, any credit grantor or mortgage lender, any collection agency or debt buyer, any government or agency thereof, be it Federal, Provincial/Territorial or Municipal, or the Canada Revenue Agency. If you or anyone else chooses to read my posts, It will be "daylite clear" that I am NOT an advocate for a creditor or a consumer as you have so stated. My "tagline" says it all. EDUCATING ONE CONSUMER AT A TIME.

I offer nothing for sale including my time, knowledge, expertise and experience, or would I accept anything in return.

Now, let's get right to the matter at hand.

In a previous post that I had written to "pabloottawa" explaining to him that his Federal student loan that was issued in 1997 or 1998 was issued under the Canada Student Financial Assistance Act and as such was more commonly referred to as a "Risk-Shared" loan. Because this loan was issued in Ontario by Scotiabank, even though it is a Federal student loan, in the event of default, it could fall squarely within the provisions of the new Ontario Limitations Act, 2002 if applicable. I further explained how a student loan could get caught by the provisions detailed in the new Ontario Limitations Act, 2002 should the student loan default prior to January 1, 2004.

After analyzing the details as supplied by "pabloottawa", I concluded that this Federal student loan fell within the provisions of Paragaph 16(1)(k) of the Ontario Limitations Act, 2002 and as such there is NO LIMITATION PERIOD for the commencement of a legal proceeding.

You responded in a later post that "...if you reside and took out the loan in Ontario, the Ontario Limitation Act does not apply here. That is because the loan is a federal matter and not a provincial. Federal law supersedes provincial law."

What a lot of rubbish!!!!! I don't know where you got that idea from. I challenge you to report on this forum the Statute, Act or Regulation including Section, Subsection, Paragraph, etc. that supports that statement. Furthermore, report any case law or jurisprudence including Court Docket Number, in which Court the trial was held, the date of the trial, the parties at trial and the judge or justices who rendered the decision.

Here is the backgound for the application of a Limitation period for Federal student loans. Under the Canada Student Loans Act and pursuant to Section 19.1 it provides for a Limitation period of 6 years in which to commence a legal proceeding. Under the Canada Student Financial Assistance Act and pursuant to Section 16.1, it too provides for a Limitation period of 6 years in which to commence a legal proceeding. At the time that these Acts were proclaimed in force, every Limitation Act in every Province and Territory was silent about student loans including both Federal and Provincial/Territorial, including Ontario. Therefore, in the event that a Federal student loan went into default, the provisions of both the Canada Student Loans Act and the Canada Student Financial Assistance Act prevailed.

Fast forward to 2002 when the former Ontario Limitations Act was substantially changed and a new Ontario Limitations Act, 2002 was proclaimed in force effective January 1, 2004. Among the major changes were that the general limitation period was reduced from 6 years to 2 years to commence an action and that there is now NO LIMITATION PERIOD for commencing a legal action to recover monies owing on a defaulted student loan issued under the Canada Student Loans Act, the Canada Student Financial Assistance Act or the Ministry of Training, Colleges and Universities Act. This is very clearly stated in Paragraph 16(1)(k). Section 24 of this Act provides for the "Transitional" rules when a defaulted debt including a student loan falls between both Limitation Acts. In essence, the rules are relatively simple. If a debt ( including a student loan debt ) defaults prior to January 1, 2004, count forward 6 years. If the date ends before January 1, 2004, then the limitation provisions of the former Act prevail. If the debt is a Federal student debt, it is then governed by the provisions of the Canada Student Loans Act or the Canada Student Financial Assistance Act. If on the other hand, by counting forward 6 years, the date ends after January 1, 2004, then the student loan is now caught by the provisions of the new Ontario Limitations Act, 2002 in which there is NO LIMITATION PERIOD for commencing an action. Currently, Ontario is the only province or territory in which a Federal student loan is caught by the provisions of a provincial/territorial Limitation Act. In all other jurisdictions, the provisions of the Canada Student Loans Act and the Canada Student Financial Assistance Act apply.

I do not know of any court case or jurisprudence whereby the legality of Paragraph 16(1)(k) of the Ontario Limitations Act, 2002 has been challenged. I know of no ruling or court order by a Judge of the Ontario Superior Court of Justice or a Justice of the Ontario Court of Appeal who has ordered that Paragraph 16(1)(k) of the Ontario Limitations Act, 2002 be struck down, or ruled that this Paragraph is "Ultra Vires" ( meaning outside the authority ) of the Ontario Limitations Act, 2002. or must be amended or repealed.

Need further evidence? Are you seeking a second opinion? I suggest that you contact the Law Society of Upper Canada and request lawyer referral service. After being connected, ask to be referred to a lawyer who specializes in limitation matters and more specifically, to Federal student loans issued in Ontario to which they have gone into default.

And so, are you telling me that Federal law always supersedes Provincial law? For your information, I will reproduce the entire section of Paragraph 16(1)(k) of the Ontario Limitations Act, 2002.

16.(1) There is no limitation period in respect of;

(k) a proceeding to recover money owing in respect of student loans, medical resident loans, awards or grants made under the Ministry of Training, Colleges and Universities Act, the Canada Student Financial Assistance Act or the Canada Student Loans Act.

When the lawyers ( both government and those in private practice ) sat down and drafted this Act in 2002, they specifically wanted to include all student loans, both Provincial and Federal that had been issued by a financial institution in Ontario within the provisions of the new Ontario Limitations Act. And if these lawyers truly believed that these newly drafted provisions pertaining to the two Federal Acts, would be unenforceable and Ultra Vires of the new Limitations Act, then why were they drafted and passed into law by the Ontario Legislature? Are you saying that the lawyers who drafted this new Act were totally unaware or ignorant of the 6 year limitation provisions of both the Canada Student Loans Act and the Canada Student Financial Assistance Act? Hardly!!

You should note that Direct Student Loans made after July 31, 2000 are not caught within these provisions.

As I mentioned in a previous post, the legality of this provision has never been challenged and no Justice of the Ontario Superior Court of Justice or of the Ontario Court of Appeal has struck down this paragraph or issued an order to delete any reference to the two Federal Acts. If the provisions of Paragraph 16(1)(k) are illegal, null and void and unenforceable then why has this provision of the Ontario Limitations Act, 2002 been allowed to stand if it cannot be enforced?

I will be awaiting a LEGAL response.

@whid

Thank you for your well thought-out post regarding the Statute of Limitations on Federal student loans. I truly appreciate someone who has read my posts and has responded with an intelligeent reply and asking for further clarification of my comments. I also appreciate your reference to the article that appeared in the Ottawa Citizen noting the write-off of over $300 million of Federal student loans that are deemed uncollectible due to the current 6 year limitation period as detailed in both the Canada Student Loans Act as well as the Canada Student Financial Assistance Act.

The article in the Ottawa Citizen actually raises more questions than it answers. Here's why:

1. While the article refers to Federal student loans, it provides no information on which Federal student loans were written off. There are basically 3 types of Federal student loans starting on August 1, 1964 with "Guaranteed" student loans that were issued under the Canada Student Loans Act. Beginning on August 1, 1995 and ending on July 31, 2000, there were
"Risk-Shared" student loans issued under the Canada Student Financial Assistance Act. And while the financial institutions that issued these loans during this time period were ultimately responsible for their collection, student loans issued under this Act for which no payment had been made to the financial institution for 18 months following a student's end-of-study period were then returned back to the Federal government for collection. These loans were then known as "Put-Back" loans. And finally, all Federal student loans that were issued after July 31, 2000 were known as "Direct" student loans.

2. While Federal student loans are issued in all Provinces and Territories, the article was silent as to where these Federal student loans that were written off originated.

3. While the article made it "daylite" clear that the reason these Federal student loans were written off is because they survived the 6 year limitation period clearly stated in both the Canada Student Loans Act and the Canada Student Financial Assistance Act, this is precisely why when the new Ontario Limitations Act, 2002 was written, passed and proclaimed in force effective January 1, 2004 that it included Paragraph 16(1)(k) which provides NO LIMITATION PERIOD for Federal student loans issued under the Canada Student Loans Act and the Canada Student Financial Assistance Act. The lawyers responsible for drafting this Statute were pressured by the financial community in Ontario to include this provision in the new Limitations Act as they foresaw the mounting student debt and the resulting inability of many students to honour their committments resulting in defaulted student loans. Under the current Federal legislation of a 6 year limitation period to commence a legal proceeding, they wanted that limitation period extended to a NO LIMITATION PERIOD knowing that while some students after finishing their studies may not be gainfully employed and therefore not able to repay their loans, at some time in the future, they most likely will be employed full-time and earning an income commensurate with their ability to repay their student loans.

In my previous post, I clearly stated the following: "When the lawyers ( both government and those in private practice ) sat down and drafted this Act in 2002, they specifically wanted to include all student loans, both Provincial and Federal that had been issued by financial institutions in Ontario within the provisions of the new Ontario Limitations Act." You will note that I specifically referred to Ontario and not to other Provinces and Territories. The significance of that statement is that Federal student loans issued in other Provinces and Territtories are still subject to the 6 year limitation period provided for in the two Federal Acts. However, any Province or Territory can elect to opt out of any Federal limitation provision providing they provide for a separate limitation provision for the Federal Acts within their own Limitation Statute. This is precisely what Ontario has done.

In addition, I also clearly stated the following: "You should note that Direct Student Loans made after July 31, 2000 are not caught within these provisions." The significance of this statement is that all Federal student loans issued after July 31, 2000 are still subject to the 6 year limitation period regardless of which Province or Territory in which they were issued.

Any Federal Department or any Province can elect to opt out of the general limitation provisions found in Section 32 of the Crown Liability and Proceedings Act providing they make a separate limitation provision for it. Under both the Canada Student Loans Act and the Canada Student Financial Assistance Act, a separate limitation provision is clearly stated. It just happens to coincide with the limitation provision provided for by the Crown Liability and Proceedings Act.

32. Except as otherwise provided in this Act, or in any other Act of Parliament, the laws relating to prescriptions and the limitations of actions in force in a province between subject and subject apply to any proceedings by or against the Crown in respect of a cause of action arising otherwise than in a province shall be taken within six years after the cause of action arose.

In the matter heard in the Supreme Court of Canada on December 4, 2003, File No 28717 between the Appellant, Her Majesty the Queen and the Respondent, Joe Markevich, it was held that the Appellant's case was dismissed becauase it did not come within the provisions of Section 32 of the Crown Liability and Proceedings Act.

Here is a brief synopsis of the case. In 1985, Joe Markevich was issued assessments by Revenue Canada for a tax liability in excess of $230,000 to which he did not object. No attempts were made to collect on this tax liability until 1997 when the tax liability along with accrued interest had grown to an amount in excess of $770,000. Mr. Markevich made a Motion to the Federal Court to have this lawsuit "quashed" but the Motions Judge disagreed. Mr. Markevich then appealed to the Federal Court of Appeal to have the decision of the Motions Judge overturned. The Federal Court of Appeal overturned the decision of the Motions Judge and Her Majesty the Queen then appealed to the Supreme Court of Canada. The Supreme Court of Canada agreed with the Federal Court of Appeal and dismissed the appeal.

At the time of the appeal, Section 222 of the Income Tax Act ( Canada ) read as follows:

222. All taxes, interest, penalties, costs and other amounts payable under this Act to her Majesty and recoverable as such in the Federal Court or any other court of competent jurisdiction or in any other manner provided by this Act.

As can be clearly seen, the Income Tax Act ( Canada ) did not provide for a specific limitation period for the collection of taxes, interest, penalties and other amounts payable under this Act to her Majesty and relied entirely on the limitation period as provided in Section 32 of the Crown Liability and Proceedings Act, namely, six years.

After the Crown's appeal was dismissed, the Department of Finance immediately decided to change the wording of Section 222 of the Income Tax Act ( Canada ) and provide for a separate and different limitation period, thus overriding any limitation period as provided for in Section 32 of the Federal Crown Liability and Proceedings Act.

Here is how Section 222 of the Income Tax Act ( Canada ) currently reads:

222.(4) The limitation period for the collection of a tax debt of a taxpayer

(a) begins

(i) if a notice of assessment or a notice referred to in subsection 226(1) in resprct of the tax debt is sent to or is served on the taxpayer after March 3, 2004, on the day that is 90 days after the day on which the last one of these notices is sent or served, and

(ii) if subparagraph (i) does not apply and the tax debt was payable on March 4, 2004, or would have been payable on this date but for a limitation period that otherwise applied to the collection of the tax debt, on March 4, 2004, and

(b) ends, subject to subsection (8) on the day that is 10 years after the day on which it begins.

As you can see, the Department of Finance has elected to opt out of the limitation provisions of Section 32 of the Crown Liability and Proceedings Act and provide for a separate limitation period for the collection of taxes, interest, penalties and other amounts under the Income Tax Act ( Canada ).

And Section 32 also provides for any province to elect out of any Federal limitation provision and provide for their own limitation provision within their own Limitation Act. And that is precisely what the drafters of the new Ontario Limitation Act, 2002 did with the inclusion of Paragraph 16(1)(k).