Vol. 148, No. 11 — May 21, 2014
SOR/2014-101 May 2, 2014
FAMILY ORDERS AND AGREEMENTS ENFORCEMENT ASSISTANCE ACT
Regulations Amending the Family Support Orders and Agreements Garnishment Regulations
P.C. 2014-480 May 1, 2014
His Excellency the Governor General in Council, on the recommendation of the Minister of Justice, pursuant to section 61 (see footnote a) of the Family Orders and Agreements Enforcement Assistance Act (see footnote b), makes the annexed Regulations Amending the Family Support Orders and Agreements Garnishment Regulations.
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 (a):
(a.1) section 253 of the Excise Tax Act as it relates to the rebate payable to employees and partners;
(2) Paragraph 3(b) of the Regulations is repealed.
2. Section 5 of the Regulations is replaced by the following:
5. For the purpose of paragraph 28(c) of the Act, an application to garnishee shall be in the form set out in Schedule 1.
3. Subsection 6(2) of the Regulations is repealed.
4. Section 9 of the Regulations is replaced by the following:
9. For the purpose of section 45 of the Act, a notice from the Minister to the judgment debtor named in a garnishee summons shall be in the form set out in Schedule 2 and shall be sent, within 20 days after the date of service of the documents referred to in section 28 of the Act on the Minister, to each address of the judgment debtor that is provided in the application to garnishee referred to in section 5.
COMING INTO FORCE
5. (1) These Regulations, except subsection 1(1), come into force on the day on which they are registered.
(2) Subsection 1(1) comes into force on February 1, 2015.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Regulations.)
Enforcement of family support obligations is primarily a provincial and territorial responsibility. However, the federal government provides assistance to provinces and territories in their enforcement activities. For example, the Family Orders and Agreements Enforcement Assistance Act (FOAEAA) permits, under Part II, the garnishment of designated federal moneys payable to individuals who are in default of their support obligation. The funds are designated as “garnishable moneys” under the Family Support Orders and Agreements Garnishment Regulations (the Regulations). The Family Law Assistance Services (FLAS) within the Department of Justice is responsible for administering the FOAEAA.
To effect garnishment, an applicant must serve on the Minister of Justice (the Minister) an application and a garnishee summons. Under the FOAEAA, the Minister must then send a notice to the debtor in the form and manner prescribed by the Regulations.
The list of federal moneys that can be garnisheed in the enforcement of family obligations is intended to identify funds that can reasonably assist in recovering arrears of family support obligations. The list has been reviewed regularly since the introduction of the Regulations in 1988 to designate or remove funds, as required, to ensure the effectiveness of the garnishment scheme.
Issues and objectives
A review of the list of “garnishable moneys” is required to ensure that the list in the Regulations is relevant and provides a meaningful source of funds. Other changes are required to improve the administration of the Regulations, notably to reflect current practices and ensure consistency in the calculation of prescribed times under the Regulations.
The amendments improve the efficiency and effectiveness of the FOAEAA Part II garnishment scheme, maintain its relevancy, reflect current practices, and continue to support federal, provincial and territorial cooperation in the area of support enforcement.
Amendments to the list of “garnishable moneys” (section 3)
Section 3 of the Regulations designates federal moneys as “garnishable moneys” to satisfy support obligations. The amendments designate the employee and partner GST/HST rebate, administered by the Canada Revenue Agency (CRA) as “garnishable moneys,” and remove the moneys payable by the Bank of Canada (BC) on account of regular interest Canada Savings Bonds (CSB interest) from the list of designated funds.
Subsection 6(2), which is only applicable to the CSB interest, is also repealed.
Application form (section 5)
An amendment to section 5 of the Regulations reflects that most provincial enforcement services (PES) complete and submit the data for their FOAEAA Part II applications electronically, directly into the Department of Justice’s secure Family Orders and Agreements Enforcement Assistance database or through a File Transfer Protocol process. The amendment removes the reference to “made by filling in” from section 5 of the Regulations as it evokes manual completion of the form. The amendment does not preclude other applicants (e.g. courts) from completing and submitting their application forms manually.
Notice to debtor (section 9)
To provide the Minister with sufficient time to positively identify and notify the debtor, the FOAEAA requires the Minister to send a notice to the debtor within 20 days after the service of a garnishee summons. However, as the application form, which contains detailed information regarding the debtor, is not always provided at the same time as service of the garnishee summons on the Minister, this tardiness means that the prescribed time commences before the Minister receives the relevant information to identify the debtor. The amendment to section 9 of the Regulations ensures that the prescribed time starts only upon receipt of both documents (i.e. the summons and the application form), as one serves to bind Her Majesty while the other contains the information needed to identify the debtor.
The “One-for-One” Rule does not apply to this proposal as it does not impose any administrative burden on business.
Small business lens
The small business lens does not apply to this proposal as it does not impose any burden on small business.
Key stakeholders, including officials from the BC, the CRA and PES, were consulted. The consultations resulted in a consensus to proceed with the amendments.
These amendments were published in the Canada Gazette, Part I, on October 5, 2013, for a 30-day comment period. No comments were received.
Designation of the employee and partner GST/HST rebate
Garnishment of the employee and partner GST/HST rebate is comparable to garnishment of the individual income tax refund which federal legislation currently allows under paragraph 3(a) of the Regulations in satisfaction of support obligations. It is estimated that the addition of the employee and partner GST/HST rebate to the list of designated “garnishable moneys” would allow the garnishment, on behalf of support recipients, of approximately $100,000 annually, which will help families get the financial support they need and are entitled to.
This addition conforms to the April 2009 Supporting Families Experiencing Separation and Divorce Initiative under which the Government committed to encouraging parents to comply with their support obligations.
The administrative cost of adding the employee and partner GST/HST rebate to the list of designated funds will be minimal due to existing system links in place between the FLAS and the CRA for the garnishment of other designated CRA funds.
Removal of CSB interest
A recent cost-benefit analysis has shown that the cost of intercepting CSB interest is far beyond any benefit received by support recipients.
On May 25, 1989, the Regulations were amended to designate the CSB interest as “garnishable moneys” (SOR/89-278). At that time, the BC held billions of dollars’ worth of CSB, of which 30% was for regular interest on savings bonds, and the average annual payment of CSB interest was approximately $900 per individual. Annual CSB interest rates decreased from 7.5% in 1991 to 0.50% in 2013. Today, the total regular interest bonds held by the Bank are worth less than a quarter of what they were worth in 1989.
From the 2004 to 2012 fiscal years, only $6,501.68 was garnisheed, with a high of $2,329.50 during the 2005–2006 fiscal year and a low of $70.00 during the 2012–2013 fiscal year. In general, each successive year saw a decrease in the amount garnisheed as well as a decrease in the number of files where the fund was subject to garnishment.
The CSB interest is removed from the list of designated “garnishable moneys” as the present and future potential benefits no longer justify the administrative cost incurred to garnishee the fund.
Repealing the fund will have a cost-saving effect on Government with little impact on support creditors.
Finally, the technical amendments improve the efficiency and effectiveness of the garnishment scheme and provide greater consistency with respect to the prescribed times set out in the Regulations.
Implementation, enforcement and service standards
The FLAS, the CRA and the BC will each implement the applicable amendments. The FLAS will also continue to process garnishment applications within the deadlines set out in the FOAEAA.
Support Enforcement Policy and Implementation Unit
Family, Children and Youth Section
Department of Justice