How to Collect a Debt From a Company in Canada (for Non-Canadian Companies)
A Canadian customer can be sued in Canada, or sued abroad and the judgment enforced there. Here's how each route works, the deadlines that can kill your claim, and what to try first.
Your customer is in Canada. You're not. The invoice is months overdue, the emails have stopped getting answers, and somewhere in Toronto, Vancouver or Montreal, someone may be typing the question our film is built around: "can they even sue me?"
The short answer is yes. A foreign supplier has two court routes against a Canadian company, and Canada is generally a reliable place to enforce a debt. But the routes have deadlines that are shorter than many creditors expect, and choosing the wrong one wastes time and money. This guide explains both routes, the Ontario rules that decide whether a foreign judgment can be enforced, and what usually works before anyone goes to court.
First, a short film, told entirely through a debtor's late-night search history. It's the first episode of Search History.
The short answer
- You can sue in Canada. File in the province where the customer is based. In Ontario, claims up to CAD 50,000 can go to Small Claims Court; larger claims go to the Superior Court of Justice.
- Or you can sue at home and enforce in Canada. A judgment from your own courts can be recognised by a Canadian court, which won't re-hear the case, provided your court had a real and substantial connection to the dispute.
- Watch the deadlines. In Ontario, both a contract claim and a claim to enforce a foreign judgment are generally subject to a two-year limitation period.
- Try the fastest route first. A formal demand from a collector on the ground in Canada often gets paid without any court at all.
For how cross-border collection works in general, see our guide to collecting a debt from a company in another country.
Canada is federal: the province matters
There isn't one Canadian court system for debt claims. Each province and territory has its own courts, procedures and limitation periods, and Quebec uses a civil-law system with its own rules for recognising foreign decisions. In practice, you act in the province where the debtor company is based or has its assets. The examples in this guide use Ontario, Canada's largest commercial market, where Toronto is.
Route 1: sue the customer in Canada
Suing where the debtor is often gives the most direct path to enforcement, because the judgment is already local.
- Small Claims Court. Since 1 October 2025, Ontario's Small Claims Court hears claims up to CAD 50,000, excluding costs and interest (it was CAD 35,000). It's simpler, faster and cheaper than the Superior Court, and many businesses use it for unpaid invoices.
- Superior Court of Justice. Claims above CAD 50,000 go to the Superior Court, where a simplified procedure is available for mid-sized claims.
- The limitation period. In Ontario, the basic limitation period for most claims, including unpaid invoices, is two years from when the claim was discovered, usually soon after the payment date passed. Don't let a year of polite reminders use up half of it.
The film's example, €46,200, would be above the Small Claims limit at current exchange rates, so a court claim would go to the Superior Court.
Route 2: sue at home, then enforce in Canada
Sometimes it's easier to sue in your own country, in your own language, often under your own contract's jurisdiction clause. The judgment then has to be recognised in Canada before it can be enforced against the debtor's assets there.
How recognition works in Ontario. Most foreign judgments, including those from EU countries and the US, aren't covered by a reciprocal-registration scheme. The creditor starts a fresh proceeding in the Ontario court, which checks that the foreign court properly took jurisdiction and that the procedure was fair.
The key test. A foreign court is treated as having proper jurisdiction if the Canadian defendant accepted or took part in the foreign proceedings, or if there was a "real and substantial connection" between the dispute or the defendant and the foreign court. A supplier suing in its own country over goods it made and shipped from there will often meet this test.
No second trial. The debtor can raise only narrow defences: fraud, denial of natural justice, or public policy. The Ontario court won't re-hear the merits. That includes default judgments, where the debtor ignored the foreign case. As the film puts it, ignoring the case doesn't make it go away.
The deadline. Ontario's Court of Appeal has held that a claim on a foreign judgment is subject to the basic two-year limitation period, which starts, at the earliest, when the foreign judgment becomes final: when the time to appeal has passed, or the appeal has been decided. In a later case, it held that creditors must search for the debtor's Ontario assets with due diligence; a creditor who waited too long lost a very large judgment to the deadline. Winning at home is only half the job.
Which route should you choose?
| Sue in Canada | Sue at home, enforce in Canada | |
|---|---|---|
| Language and law | Canadian court, usually English or French | Your own court and language |
| Steps | One case, then local enforcement | Two cases: your judgment, then recognition in Canada |
| Main risk | Two-year limitation period for the claim | Jurisdiction challenge, and a two-year deadline after the judgment is final |
| Best when | The debtor has clear assets in one province | Your contract names your courts, or the debtor has assets in several countries |
A jurisdiction or arbitration clause in your contract can decide this for you, so check it first. For sales of goods, remember that Canada and many of its trading partners, including the US, China and most EU member states, are parties to the UN Convention on Contracts for the International Sale of Goods (CISG). It applies by default to many cross-border B2B sales unless the contract excludes it, and it entitles a seller to interest on sums paid late.
What usually works before court
Most Canadian B2B debts are recovered without a judgment. Before either court route, a structured approach tends to work:
- Check the company. Confirm the exact legal name, the jurisdiction it's incorporated in, and that it's still active. Canadian companies can be federally or provincially incorporated, and public registries show their status.
- Send one clear demand. Include the invoice, the delivery evidence, any interest your contract or the CISG allows, and a short deadline.
- Use someone on the ground. A local collector who writes and calls in the debtor's language, time zone and legal system changes the conversation from "can they even sue me?" to "how fast can I pay?". Collection agencies must be licensed in most provinces, so check that yours, or its local partner, is registered where required.
- Keep the clock in view. Note the date the claim arose and the two-year deadline, and escalate well before it.
If your customer is south of the border, see our guide to collecting a debt from a company in the USA. If they've simply gone quiet, read the silence first.
This is general information, not legal advice. Canadian rules vary by province, and the right route depends on your contract and the facts.
Frequently asked questions
Can a foreign company sue a Canadian company?
Yes. A foreign supplier can sue a Canadian company in the province where it's based, or sue in the supplier's own country and then ask a Canadian court to recognise and enforce that judgment. Which route is better depends on the contract, the amount and where the debtor's assets are.
Will a Canadian court enforce a judgment from Europe or the US?
Often, yes. In Ontario, a foreign money judgment can be enforced if the foreign court properly took jurisdiction, for example because there was a real and substantial connection between the dispute and that court. The Ontario court doesn't re-hear the case, and the debtor's defences are limited to fraud, natural justice and public policy.
How long do I have to enforce a foreign judgment in Ontario?
Generally two years. Ontario's Court of Appeal has held that the basic two-year limitation period applies, starting at the earliest when the foreign judgment becomes final, meaning when the appeal period has ended or any appeal has been decided. Courts also expect creditors to look for the debtor's assets with due diligence.
What is the Small Claims Court limit in Ontario?
Since 1 October 2025, Ontario's Small Claims Court hears claims of up to CAD 50,000, excluding costs and interest. Larger claims go to the Superior Court of Justice.
What happens if a Canadian company ignores a foreign lawsuit?
The foreign court will usually give a default judgment. That judgment can still be enforced in Canada, because the Canadian court won't re-hear the merits, and ignoring the proceedings isn't one of the recognised defences.
Do I need a lawyer to collect a debt from a Canadian company?
Not always. Many B2B debts are recovered through a formal demand and negotiation by a licensed collector, without going to court. If court action is needed, a local lawyer is usually involved, particularly for claims in the Superior Court or for enforcing a foreign judgment.
Distance isn't a defence
Cerámicas Valmar was paid the morning after its letter arrived, and never had to open a court file in Canada. INTERCOL recovers B2B debts from companies in Canada and worldwide, with people on the ground who know the local courts, languages and deadlines. We work on a no cure, no pay basis: if we don't recover, you don't pay. Tell us about your unpaid invoice.