Canada Gazette, Part I, Volume 152, Number 43: Regulations Amending the Family Support Orders and Agreements Garnishment Regulations
October 27, 2018
Statutory authority
Family Orders and Agreements Enforcement Assistance Act
Sponsoring department
Department of Justice
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Background
Enforcement of family support obligations is primarily a provincial and territorial responsibility. The federal government assists the provinces and territories in their enforcement activities through federal legislation such as the Family Orders and Agreements Enforcement Assistance Act (FOAEAA). Under Part II of the FOAEAA, certain federal payments (e.g. Employment Insurance, Old Age Security, Canada Pension Plan and federal Income Tax Refunds) designated under the Family Support Orders and Agreements Garnishment Regulations (Regulations) may be garnished to pay family support obligations. To effect garnishment, an applicant must serve on the Minister of Justice (Minister) an application and a garnishee summons.
Currently, a fee is charged to judgment debtors for every garnishee summons issued against them that is processed under Part II of the FOAEAA. This fee was established in the 1980s to recover the cost associated with the administration and the operation of the interception program within the Department of Justice (Department) and other departments (i.e. Employment and Social Development Canada, Canada Revenue Agency). Currently, the Regulations set out the rate of $190 collected in yearly instalments of $38 for the five-year period during which Her Majesty is bound by the garnishee summons. Any portion of the fee that is not recovered in the year it became payable is carried forward and can be recovered in any subsequent year during the five-year binding period. The fee is recoverable against garnishable moneys payable to the debtor after garnishment has taken place. Any portion of the fees that is not recovered during the five-year binding period is remitted (i.e. no longer owed by the judgment debtor) either at the end of the five-year period or sooner if a garnishment application is terminated.
Issues and objectives
Over the years, the Department has received considerable feedback from stakeholders about the current fee collection model. A review of the model has revealed an uneven collection of fees amongst debtors depending on the funds being garnished. This is partly due to the application of provincial and territorial legislation which often limits the amount that may be garnished from income (including sources of income replacement such as Employment Insurance payments) to a maximum of 50% while other types of garnishable moneys (e.g. Income Tax Refunds) may be 100% garnishable. Where only 50% of income is garnished, fees can be recovered from the remaining 50% that is payable to the debtor. In contrast, where 100% of an income tax refund is garnished, there is no garnishable moneys from which to recover fees. Further, in some cases, no fees are collected if, during the five-year period, there are no garnishable moneys payable to the debtor. As a result, under the current fee collection model, more fees are collected from debtors who receive income.
In addition, fees are cumulative over the five-year binding period and can reach $190. This can cause financial hardship for debtors in the fifth year where the full $190 is deducted at once from their remaining income.
The accumulation of fees over a five-year period is also problematic when unpaid fees are remitted at the end of that period. When the Department reports on its doubtful accounts at the end of a fiscal year, the high volume of uncollected FOAEAA fees is inflated because the reporting that should be based on a period of 365 days instead includes, in the FOAEAA case, unpaid fees from up to the five previous fiscal years.
The proposed Regulations would provide a better balance between the objective of government cost recovery and that of reducing the potential financial hardship faced by certain support debtors. It would make the FOAEAA system more efficient and would add transparency to the Department's accounts receivable related to the government's cost recovery under the FOAEAA.
Description
The proposed amendment to section 10 would remove the cumulative five-year period to collect fees. Instead, an annual $38 fee would be charged to debtors for every garnishee summons issued against them in order to offset the costs of processing the garnishee summonses under Part II of the FOAEAA. The fee would become payable on the day that Her Majesty is bound by the garnishee summons and, under section 11, would be recoverable only during the year following that day or until the garnishee summons ceased to bind Her Majesty, whichever comes first.
The proposed amendment to section 12 would specify that any portion of the fee unpaid at the end of the year after it became payable or at the time Her Majesty ceased to be bound by the garnishee summons would be remitted.
Finally, the old rules would continue to apply to a garnishee summons being processed under Part II of the FOAEAA before the coming into force of the amendments until its next yearly anniversary from the date it became binding on Her Majesty. The new rules would apply to these garnishee summons after that date. The new rules would immediately apply to all garnishee summonses processed after the coming into force of the Regulations.
The proposed fee collection model would also be monitored closely for a period of three to five years as recommended in the Treasury Board of Canada Guide to Establishing the Level of a Cost-Based User Fee or Regulatory Charge to ensure that it reflects the costs associated with the program delivery.
"One-for-One" Rule
The "One-for-One" Rule does not apply to this proposal as it would not impose any administrative burden on business.
Small business lens
The small business lens does not apply to this proposal as it would not impose any burden on small business.
Consultation
Consultations were held with federal partners that would be affected by these amendments and they are supportive of the amendments. Consultations were further held with provincial and territorial counterparts in the spring of 2017 and no questions or concerns were raised. Creditors and debtors will be consulted during the prepublication period. No concerns are anticipated as these amendments would not affect creditors and they would ensure that debtors are treated more fairly.
Rationale
These amendments are intended to provide a better balance between the government objectives to recover costs and to reduce the financial burden or hardship faced by certain support debtors. They would improve the administration of the FOAEAA, Part II, garnishment scheme while reflecting current practices. They would also add transparency to the Department's accounts receivable and ensure that Canadians have a better understanding of the financial reality related to the cost recovery under the FOAEAA interception program as published annually in the public accounts and financial statements.
Implementation, enforcement and service standards
Implementation of these amendments is carried out by the Family Law Assistance Services, responsible for the administration of the FOAEAA and the Finance and Planning Branch of the Department, as well as other federal departments that are responsible for the garnishable moneys designated in the Regulations. Compliance with the FOAEAA, Part II, and its Regulations continues to be assured by those parties.
Contact
commentsFOAEAA-GAPDA.commentairesLAEOEF-LSADP@justice.gc.ca
Department of Justice
PROPOSED REGULATORY TEXT
Notice is given that the Governor in Council, pursuant to section 61 footnote a of the Family Orders and Agreements Enforcement Assistance Act footnote b, proposes to make the annexed Regulations Amending the Family Support Orders and Agreements Garnishment Regulations.
Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be sent to the following email address: commentsFOAEAA-GAPDA.commentairesLAEOEF-LSADP@justice.gc.ca.
Ottawa, October 18, 2018
Jurica Čapkun
Assistant Clerk of the Privy Council
Regulations Amending the Family Support Orders and Agreements Garnishment Regulations
Amendments
1 Sections 10 to 12 of the Family Support Orders and Agreements Garnishment Regulations footnote 1 are replaced by the following:
10 The fee in respect of the processing of a garnishee summons, served on the Minister, that is to be paid by the judgment debtor named in the garnishee summons is $38 for each year during which Her Majesty is bound by the garnishee summons.
Recovery of Fees
11 A fee in respect of the processing of a garnishee summons may be recovered only in the year in which the fee becomes payable.
Remission of Fees
12 If a fee in respect of the processing of a garnishee summons, or any part of that fee, remains payable by the judgment debtor at the end of a year during which the garnishee summons is binding on Her Majesty, or if Her Majesty ceases to be bound by a garnishee summons at any time during a year, that fee or that part of the fee is remitted.
2 Schedule 2 to the Regulations is replaced by the Schedule 2 set out in the schedule to these Regulations.
Transitional Provision
3 Sections 10 to 12, as they read immediately before the day on which these Regulations come into force, continue to apply in respect of any garnishee summons that was served on Her Majesty before that day until the next anniversary of the day on which the garnishee summons became binding on Her Majesty.
Coming into Force
4 These Regulations come into force on the day on which they are registered.
SCHEDULE
(Section 2)
SCHEDULE 2
(Section 9)
Notice to Debtor
Department of Justice Reference Number: __________
Date:
Take notice that on ___________ the Government of Canada was served with a garnishee summons. This summons was served by the following court or a provincial or territorial entity: _____________
Account Number: ____________
Effective on _________, the summons indicates that you owe the following amounts for family support:
Arrears owing $__________ as of the summons issue date of _________.
Periodic payments of $_______ as of ________.
Any moneys that are payable to you by the Government of Canada under Acts, funds or programs designated in the regulations made under the Family Orders and Agreements Enforcement Assistance Act may be garnisheed to pay the judgment creditor named in the summons.
If you have questions about the amount of money due, or if you wish to dispute the garnishee summons, please contact the court or the provincial or territorial entity that issued the garnishee summons.
After sufficient moneys are garnisheed to pay the judgment creditor, a fee of up to $38 for each year during which Her Majesty is bound by the garnishee summons will be deducted from the moneys payable to you.
The garnishment of funds and the collection of the fee are authorized by the Family Orders and Agreements Enforcement Assistance Act.
Family Orders and Agreements Enforcement Assistance Unit
Department of Justice
Telephone: 1-800-267-7777
Fax: 613-990-8197
TDD: 1-800-267-7676