Pursuant to subsection 155.1(6) of the Financial Administration Act,
hereby makes the annexed Regulations respecting interest on overdue accounts and
administrative charges for dishonoured instruments, effective April 1, 1996.
[S.C. 1991, c. 24, s. 45]
SHORT TITLE
1. These Regulations may be cited as the Interest and
Administrative Charges Regulations.
INTERPRETATION
2. In these Regulations,
"Act" means the Financial Administration Act; (Loi)
"average bank rate" means the weighted arithmetic average of the
bank rates that are established during the month before the month in respect of
which interest is being calculated; (taux d'escompte moyen)
"bank rate" means the rate of interest established weekly by the
Bank of Canada as the minimum rate at which the Bank of Canada makes short term
advances to members of the Canadian Payments Association; (taux d'escompte)
"concessionary loan" means a loan bearing no interest or a rate of
interest that is three or more percentage points below the average cost of
borrowing of the Government of Canada on the day the loan agreement is entered
into; (prêt assorti de conditions privilégiées)
"demand for payment" means a demand for payment in writing and
includes an invoice, bill, statement and assessment; (demande de paiement)
"due date" means, in relation to an amount owing to Her Majesty
(a) for the provision of goods or services or the use of
facilities,
(i) the due date specified in a demand for payment for, or included in
the terms and conditions of, the provision of the goods or services or the
use of the facilities, as the case may be, or
(ii) where no date has been specified or included as indicated in
subparagraph (i), the day that is 30 days after the day on which a
demand for payment is issued,
(b) with respect to a repayable contribution,
(i) every day on which a scheduled repayment is to be made in accordance
with the terms and conditions of the contribution, or
(ii) where no repayment schedule for the contribution has been specified,
the day that is 30 days after the day on which a demand for payment is
issued,
(c) with respect to the recovery of an overpayment or erroneous
payment,
(i) every day on which a scheduled repayment is to be made, or
(ii) where no repayment schedule has been arranged, the day that is 30
days after the day on which a demand for payment is issued,
(d) with respect to a licence, lease, loan, including a
hypothecary loan, or a mortgage, every day on which a payment is to be made in
accordance with the licence, lease, loan or mortgage agreement,
(e) with respect to an accountable advance, the day on which
repayment of any balance owing to Her Majesty is to be made in accordance with
the Accountable Advances Regulations, and
(f) for any other reason,
(i) any day on which payment is to be made in accordance with the
applicable Act of Parliament, regulation, order, contract or arrangement, or
(ii) where a day referred to in subparagraph (i) cannot be determined,
the day that is 30 days after the day on which a demand for payment is
issued; (date d'échéance)
"financial institution" means an institution, corporation or other
entity, incorporated, continued or formed by or under an Act of Parliament or
the legislature of a province or the laws of a foreign state or political
subdivision thereof, that holds deposits and honours cheques and other payment
instructions on behalf of its clients and includes a bank, a trust company and a
cooperative credit society; (institution financière)
"in writing" includes in any electronic form that is capable of
being reproduced in intelligible, written form within a reasonable time; (par
écrit)
"pre-authorized debit" means a debit to a debtor's credit card
account or other account with a financial institution that is initiated by the
creditor, in accordance with a prior authorization given by the debtor to the
creditor. (prélèvement automatique)
APPLICATION
3. These Regulations do not apply to
(a) amounts owed to a Crown corporation; or
(b) amounts owing by a department.
PART I
INTEREST
Application
4. This Part does not apply to
(a) capital market transactions and, except as provided in
section 7, interest-bearing loans, including hypothecary loans, or
mortgages;
(b) amounts owing to Her Majesty pursuant to the Income Tax
Act, or any Act of Parliament that imposes a tax or duty; or
(c) amounts referred to in any other Act of Parliament or
regulation, or any order, contract or arrangement, that provides for the
charging of interest on those amounts.
Rate of Interest
5. (1) For the purposes of subsection 155.1(1) of the
Act and subject to sections 6 to 8, in all cases where an amount is owing
to Her Majesty, interest calculated and compounded monthly at the average bank
rate plus 3% is payable on that amount and accrues during the period beginning
on the due date and ending on the day before the day on which payment is
received by Her Majesty or an agent of Her Majesty.
(2) If a partial payment is made, the period for which interest is payable in
respect of the amount paid ends on the day before the day on which the partial
payment is received by Her Majesty or an agent of Her Majesty.
Overpayments and Erroneous Payments
6. (1) If a person has received an overpayment or erroneous
payment, interest is payable by the person on any amount that is not repaid by
its due date and accrues as specified in section 5, during the period beginning
on the due date and ending on the day before the day on which repayment is
received by Her Majesty or an agent of Her Majesty.
(2) If a person has received an overpayment or erroneous payment as a result
of fraud, falsification of documents, wilful misrepresentation or any other
offence committed by that person or by any other person acting on behalf of that
person, unless provided otherwise by an order of a court, interest is payable by
that person on the amount owing on account of the overpayment or erroneous
payment and accrues as specified in section 5, during the period beginning
on the day on which the overpayment or erroneous payment is made and ending on
the day before the day on which repayment is received by Her Majesty or an agent
of Her Majesty.
(3) Nothing in subsection (1) shall be construed as preventing a
department from entering into an arrangement with a person that calls for
repayment to be made in instalments and interest to accrue and be paid on the
total amount outstanding.
Concessionary Loans
7. (1) Subject to subsection (2), in the case of a late
or missed payment on a concessionary loan, interest is payable on the amount of
the late or missed payment and accrues during the period beginning on the due
date and ending on the day before the day on which payment is received by Her
Majesty or an agent of Her Majesty, at a rate equal to the difference between
the rate set out in section 5 and the concessionary rate set out in the loan
agreement.
(2) Subsection (1) does not apply to
(a) concessionary loans that are made to sovereign states and to
which a multilateral debt relief agreement or undertaking to which Canada is a
party applies; or
(b) concessionary loans that are made to international
organizations or sovereign states for the purpose of developmental assistance.
Exceptions for Small Amounts, Errors and Breakdowns
8. Notwithstanding any other provision of this Part,
(a) no interest is payable to the extent that the interest accrued
as a result of
(i) any error made or delay caused by Her Majesty, or a duly authorized
agent of Her Majesty, in processing a payment or establishing an amount
payable, or
(ii) a breakdown or other failure in the system or communication links
customarily used by the Government of Canada to process payments; and
(b) no interest is payable where the total amount payable for a
period, including accrued interest, is less than the minimum amount for which
a demand for payment would normally be issued for that period in respect of
the service or program concerned and no demand for payment would otherwise be
issued.
Waiver
9. (1) The appropriate Minister of a department or any
public officer authorized in writing by that Minister may waive or reduce
interest provided for by this Part where
(a) the administrative costs of assessing, billing and collecting
the interest would exceed the amount of interest owing;
(b) the interest is in respect of an amount in dispute that has
been settled in whole, or in part, in favour of the debtor; or
(c) an overpayment or erroneous payment of salary, wages or
recurring benefits or allowances is to be recovered from a subsequent payment
of salary, wages or recurring benefits or allowances, as the case may be,
except in the circumstances described in subsection 6(2); or
(d) the interest is payable under subsection 6(2) and a fine
or penalty that takes into account interest on the overpayment or erroneous
payment has been imposed.
(2) Subject to subsection (3), the appropriate Minister of a department
or any public officer authorized in writing by that Minister may waive or reduce
interest provided for by this Part where the debtor was prevented from making a
payment by circumstances beyond the debtor's control, including
(a) death or incapacity of the debtor or of the person who is
directly responsible for making the payment on behalf of the debtor;
(b) a postal disruption that can reasonably be considered to have
delayed the payment or made it impossible, where no alternative means of
making payment that would not cause undue inconvenience to the debtor are
available; and
(c) a delay in the processing of a pre-authorized debit that is
caused by a breakdown or other failure in the external systems or
communication links customarily used to process such debits.
(3) When contemplating a waiver or reduction of interest under
subsection (2), the appropriate Minister or the public officer shall take
into consideration
(a) the case presented by the debtor;
(b) the debtor's payment history and history of voluntary
compliance; and
(c) the debtor's diligence in conducting the debtor's affairs in
relation to the debt.
PART II
ADMINISTRATIVE CHARGES FOR DISHONOURED
INSTRUMENTS
Charges
10. (1) Where an instrument tendered in payment or
settlement of an amount due to Her Majesty is, for any reason, dishonoured, an
administrative charge of $15 is payable by the debtor to Her Majesty.
(2) Where a payment is made by Her Majesty to a financial institution in
order to reimburse that institution for an amount initially credited to the
Receiver General on the basis of a dishonoured instrument, an administrative
charge of $10 is payable by the debtor to Her Majesty, in addition to the charge
referred to in subsection (1).
(3) Where a financial institution charges an amount to Her Majesty for
monitoring the account of a debtor who has tendered a dishonoured instrument and
for subsequently certifying or clearing that dishonoured instrument, an
administrative charge in that amount is payable by the debtor to Her Majesty, in
addition to the charge referred to in subsection (1).
Exception for Errors and Breakdowns
11. Notwithstanding section 10, no administrative charge
becomes payable as a result of
(a) any error made or delay caused by Her Majesty, or a duly
authorized agent of Her Majesty, in processing a payment or an instrument used
to make a payment; or
(b) a breakdown or other failure in the system or communication
links customarily used by the Government of Canada to process payments or
instruments used to make payments.
Waiver
12. (1) The appropriate Minister of a department or any
public officer authorized in writing by that Minister may waive an
administrative charge where the administrative costs of assessing, billing and
collecting the administrative charge would exceed the amount of the
administrative charge.
(2) Subject to subsection (3), the appropriate Minister of a department
or any public officer authorized in writing by that Minister may waive or reduce
an administrative charge where circumstances beyond the debtor's control,
including an error made by the financial institution or other institution on
which the instrument tendered in payment by the debtor is drawn, resulted in the
instrument being dishonoured.
(3) When contemplating a waiver or reduction of an administrative charge
under subsection (2), the appropriate Minister or the public officer shall
take into consideration
(a) the case presented by the debtor; and
(b) the debtor's diligence in taking action to remedy the
situation.
PART III
GENERAL
13. Administrative charges payable to Her Majesty under
Part II are in addition to any interest payable to Her Majesty under
Part I or any other Act of Parliament or regulation, or any order, contract
or arrangement.
14. Where an instrument is tendered in payment, in whole or
in part, of an amount owing to Her Majesty, including any interest payable
under Part I, and that instrument is subsequently dishonoured, the interest
continues to accrue without taking into account the purported payment.
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