LOCAL RULES

Ontario demand letter requirements

Your Ontario demand letter has 4 rules to meet. ReportDraft puts every one on your checklist and checks your draft before you sign.

  • 2 years to sue from discovery, 15 years at most
  • Small Claims Court up to 50,000 dollars
  • A demand loan counted from the missed demand (s. 5 (3))
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In Ontario a claim for an unpaid debt must be started by the second anniversary of the day it was discovered, and never more than 15 years after the missed payment. Small Claims Court hears money claims up to 50,000 dollars, and a claim that fits there cannot go to the Superior Court without leave. Each rule below links to Ontario's e-Laws.

Last reviewed November 3, 2026 against the official sources listed below.

Demand letterONTARIO / FREE CALCULATOR

Payment demanded

WhatDetails
Amount owing$4,250.00
Payment was dueAugust 31, 2026
Pay in full byNovember 17, 2026 (14 days after this letter)

Your deadlines (for your file, not printed on the letter)

WhatWhenRule
Last day to start a claimSeptember 1, 2028 (2 years from the day after payment was due, September 1, 2026)Limitations Act, 2002 s. 4, 5 (1)
Outer limit, whatever happens15 years from the act or omission (the missed payment)Limitations Act, 2002 s. 15 (2)
A part payment or a signed written acknowledgement of the debtUnder the Limitations Act, 2002, starts the period again from that day if made before it runs outLimitations Act, 2002 s. 13 (1), (10), (11)
Where to file for this amountSmall Claims Court: claims up to $50,000, not counting interest and costsCourts of Justice Act s. 23 (1); O. Reg. 626/00 s. 1
Interest a court adds to a judgmentThe court adds interest from the day the claim arose to the judgment under this Act; interest agreed in your contract changes that, so read the sectionCourts of Justice Act s. 128

Counted from the dates entered. A court decides when a claim was discovered; when in doubt, start the claim sooner.

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What Ontario requires

  • A proceeding on a claim may not be started after the second anniversary of the day the claim was discovered: the day the claimant first knew, or reasonably ought to have known, of the loss, its cause, who caused it and that a proceeding would be appropriateLimitations Act, 2002, s. 4 and 5 (1)
  • The Small Claims Court hears actions for the payment of money of up to 50,000 dollars, not counting interest and costs, and such an action may not be started in the Superior Court of Justice without leaveO. Reg. 626/00, s. 1 (1) ยท Courts of Justice Act, s. 23 (1), (1.1)
  • For a demand obligation, the loss occurs on the first day there is a failure to perform the obligation once a demand for performance is made (for demand obligations created on or after January 1, 2004)Limitations Act, 2002, s. 5 (3), (4)
  • No proceeding may be started after the 15th anniversary of the day the act or omission the claim is based on took placeLimitations Act, 2002, s. 15 (2)
  • If a person acknowledges liability for a liquidated sum before the limitation period expires, the act or omission is deemed to have taken place on the day of the acknowledgement; it must be in writing and signed, and a part payment has the same effectLimitations Act, 2002, s. 13 (1), (9), (10), (11)
  • A person entitled to an order for the payment of money may have prejudgment interest included from the date the cause of action arose, but not where interest is payable by another right, such as an agreed rateCourts of Justice Act, s. 128 (1), (4) (g)

The two-year rule

The Limitations Act, 2002 gives 2 years from discovery. For a demand loan, the loss happens on the first day the borrower fails to pay once you have made a demand, so the demand letter sets the start date.

When an acknowledgement restarts it

A signed written acknowledgement of a liquidated sum, or a part payment, made before the period runs out, counts as if the missed payment happened that day. It works even if the debtor refuses to pay the rest.

Small Claims Court and interest

Claims for money up to 50,000 dollars, not counting interest and costs, belong in Small Claims Court. The court can add prejudgment interest from the day the claim arose, unless interest is already payable under your agreement.

Common mistakes

  • Counting 2 years from the demand letter for an ordinary invoice: it runs from discovery, usually the day after the due date.
  • Filing a 30,000 dollar claim in the Superior Court of Justice without leave.
  • Relying on an unsigned acknowledgement.

Sources

Last reviewed November 3, 2026. Next review due February 3, 2027. This page explains published rules to help you write your report. It is not legal advice; the official text linked above governs.