Vol. 145, No. 8 — February 19, 2011
ARCHIVED — Regulations Amending the Family Support Orders and Agreements Garnishment Regulations
Family Orders and Agreements Enforcement Assistance Act
Department of Justice
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Issue and objectives
The Family Orders and Agreements Enforcement Assistance Act (FOAEAA) allows for the garnishment of designated federal moneys payable to individuals who are in default of their support obligation.
The Department of Justice (DoJ) proposes to designate two new source funds, the Apprenticeship Completion Grant (ACG) and payments made under the Wage Earner Protection Program (WEPP), as federal source funds that can be garnished to satisfy family support obligations.
To effect garnishment of designated federal funds, an applicant must serve on the Minister of Justice an application and a garnishee summons. The DoJ proposes to allow provincial enforcement services (PES) to serve the garnishee summons by means of electronic communication as agreed upon by a PES and the DoJ.
Description and rationale
Enforcement of support obligations is primarily a provincial and territorial responsibility. However, the federal government provides assistance to provinces and territories in their enforcement activities. In addition to their own legislation, the provinces and territories have access to two federal laws, one of those being the FOAEAA which provides tools such as garnishment of designated federal moneys.
New source funds
The federal support enforcement policy permits the garnishment of federal funds that are income-related or non-subsistence type moneys. These funds are designated under section 3 of the Family Support Orders and Agreements Garnishment Regulations (Regulations).
As part of the government-wide commitment to family support enforcement, the designation of particular federal source funds for garnishment under the Regulations has been the subject of ongoing review since 1988.
Following consultations with PES and the Department of Human Resources and Skills Development (HRSDC), the DoJ would add the ACG and the WEPP to the existing list of “garnishable moneys” in section 3 of the Regulations.
As part of Canada’s Economic Action Plan, skilled trades and apprenticeships were promoted by investing in a new $2,000 taxable cash grant, the ACG. This grant, an HRSDC program, encourages apprentices to complete their apprenticeship program in a registered designated Red Seal trade and receive journeyperson certification on or after January 1, 2009. The ACG is meant to enhance the Apprenticeship Incentive Grant (AIG) available to registered apprentices who have completed their first or second level in an apprenticeship program in a designated Red Seal trade, on or after January 1, 2007. The AIG has been designated as garnishable moneys under the Regulations since March 2008.
The ACG is treated as income for tax purposes. It is characterized as being a training allowance and non-subsistence type moneys. The ACG funds only become payable once the training is completed. Garnishment would not financially prevent an apprentice from completing his or her program. The amount to be garnisheed will vary according to provincial garnishment law which stipulates a maximum garnishable percentage.
In 2009–2010, 18 860 ACG were issued to eligible apprentices. Service Canada estimates that 19 000 to 21 000 will be issued per year in the next two years. A cost-benefit analysis estimated that the maximum potential amount garnishable for this fund would be $103,200 per year, if the number of grant recipients remains at 20 000.
The WEPP, also an HRSDC program, provides payment of wages, earned vacation, severance and termination pay that are owed to eligible workers when their employer declares bankruptcy or becomes subject to a receivership. The maximum payment would be equivalent to four weeks of insurable Employment Insurance earnings, approximately $3,323 minus amounts prescribed by regulations.
Under federal, provincial and territorial legislation, an employee’s salary is garnishable to satisfy support obligations. WEPP funds are meant to replace earned but unpaid wages. Accordingly, those funds should be available for garnishment to assist support recipients.
The funds disbursed pursuant to the WEPP are characterized as income-related and are similar to other funds presently designated, such as Employment Insurance.
The amount to be garnisheed will vary according to the provincial garnishment law which stipulates a maximum garnishable percentage.
According to estimates, the amount that could be garnished from this program per year would be $80,496 with an average of $1,500 per individual.
Under the FOAEAA, garnishment takes effect once an application and a garnishee summons have been served on the Minister of Justice by any method permitted under provincial garnishment law, by registered mail or by any other method prescribed in the Regulations. While section 7 of the Regulations provides that an application can be served by means of electronic communication agreed upon between the PES and the DoJ, this method of service does not apply to garnishee summonses. Therefore, in practice, a PES generally serves the application by electronic communication and the garnishee summons by fax or by registered mail.
In 2009–2010, the DoJ received 82 522 garnishee summonses. As of March 31, 2010, there was a total of 180 403 active garnishee summonses. Except for Ontario, provincial and territorial legislation does not permit service of a garnishee summons by electronic communication other than by fax. Amending the federal Regulations would eliminate the need for each province and territory to amend their legislation.
This proposal would amend subsection 7(2) of the Regulations to allow a PES to serve the garnishee summons by electronic communication as agreed upon between the PES and the DoJ. The amendment would also ensure that the electronic format used would be compatible with the PES and DoJ computer systems and provide flexibility for the use of new technologies as they become available. Making the processing of garnishee summonses more efficient would reduce the use of paper and ink and decrease the risk attributable to human error.
Benefits and costs
The addition of the ACG and the WEPP as source funds to the list of “garnishable moneys” under section 3 of the Regulations is consistent with the federal support enforcement policy and will contribute to improve the economic well-being of families and, in particular, of children. Support debtors do not lose the value of the garnisheed funds because the money is used to satisfy their support obligations.
Federal garnishment processes are already in place to garnish designated funds under the Regulations. The same garnishee summons serves for all garnishable moneys designated in the Regulations. Consequently, the processes that are currently in place will be used to garnish the ACG and the WEPP funds.
Under section 10 of the Regulations, an administration fee of $190 for a five-year period for processing of the garnishee summons, payable in instalments of $38 per year, is charged to the judgment debtor. The administration fee is recovered by set-off against moneys payable to the judgment debtor. Although the administrative fee does not cover all costs associated with garnishment, the outstanding costs remain negligible.
Currently, applications and affidavits under Parts I and III of the FOAEAA, and applications under Part II, may be submitted electronically. Electronic submission of these documents has proven to be reliable, easy to operate and a better use of available resources. As the DoJ is already receiving some documents electronically by the PES, the proposed amendment is expected to have low implementation costs for the PES and the DoJ. The amendment is not expected to add ongoing costs to either government.
Consultations were held with officials responsible for the administration of the source funds at HRSDC. Further consultations were held with PES. The consultations resulted in a consensus to proceed with the proposed addition of the two funds.
PES were also consulted and support the proposed amendment to allow the electronic service of a garnishee summons.
Implementation, enforcement and service standards
Compliance with the FOAEAA and its Regulations will continue to be assured through the DoJ’s Family Law Assistance Services Unit, which is responsible for administering the garnishment applications process.
Support Enforcement Policy and Implementation
Family, Children and Youth Section
Department of Justice
284 Wellington Street
Ottawa, Ontario K1A 0H8
PROPOSED REGULATORY TEXT
Notice is hereby given that the Governor in Council, pursuant to section 61 (see footnote a) of the Family Orders and Agreements Enforcement Assistance Act (see footnote b), proposes to make the annexed Regulations Amending the Family Support Orders and Agreements Garnishment Regulations.
Interested persons may make representations with respect to 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 addressed to Sylviane Deslauriers, Counsel, Family, Children and Youth Section, Department of Justice, 284 Wellington St., Ottawa, Ontario K1A 0H8 (tel.: 613-954-4723; fax: 613-952-9600).
Ottawa, February 10, 2011
Assistant Clerk of the Privy Council
REGULATIONS AMENDING THE FAMILY SUPPORT ORDERS AND AGREEMENTS GARNISHMENT REGULATIONS
1. (1) Section 3 of the Family Support Orders and Agreements Garnishment Regulations (see footnote 1) is amended by adding the following after paragraph (b):
(b.1) section 7 of the Department of Human Resources and Skills Development Act as it relates to grants and contributions payable under the Skills Link program, the Apprenticeship Incentive Grant program or the Apprenticeship Completion Grant program;
(b.2) the Wage Earner Protection Program Act, excluding the provisions relating to fees or expenses paid to a trustee or receiver under subsection 22(2) of that Act;
(2) Section 3 of the Regulations is amended by adding “and” at the end of paragraph (e), by striking out “and” at the end of paragraph (f) and by repealing paragraph (g).
2. Subsection 7(2) of the Regulations is replaced by the following:
(2) Service of documents by a provincial enforcement service may also be effected by the means of electronic communication that has been agreed on by it and the Department of Justice.
COMING INTO FORCE
3. These Regulations come into force on the day on which they are registered.
S.C. 1993, c. 8, s. 18
R.S., c. 4 (2nd Supp.)