If another business owes you up to $50,000 CAD in Ontario, you can file a Plaintiff’s Claim in Small Claims Court. This system is designed to be faster and cheaper than Superior Court, and it requires both parties to attend a mandatory Settlement Conference before proceeding to a trial.
Consistent cash flow is the lifeblood of any successful company, and dealing with clients who refuse to pay their invoices is a massive drain on your resources. When phone calls, emails, and formal demand letters are completely ignored, your business must escalate the matter to the legal system. Fortunately, Ontario has a specialized court stream specifically designed to resolve lower-value business disputes efficiently.
This guide explains how to navigate the collection process for unpaid business-to-business (B2B) invoices. Whether your contracting company is in Hamilton, your design agency is in Toronto, or your wholesale business is in London, the Ontario Small Claims Court provides a clear, structured path to force delinquent clients to pay what they owe.
Step-by-Step Process in Ontario
The Small Claims Court is a branch of the Superior Court of Justice, meaning its judgments are legally binding and enforceable. 📍 The process is streamlined, and many small business owners choose to use a licensed paralegal or represent themselves to keep costs low. Here is how you do it:
Step 1: Send a Final Demand Letter
Before filing a lawsuit, you must show the judge you tried to resolve the issue reasonably. Send a formal demand letter via registered mail to the debtor’s corporate address. Give them a strict 10 to 14-day deadline to pay the outstanding invoice, and clearly state that failure to pay will result in immediate legal action without further notice.
Step 2: File a Plaintiff’s Claim (Form 7A)
If the deadline passes with no payment, you will complete a Form 7A: Plaintiff’s Claim. 📄 This document must clearly explain who you are suing, how much they owe you (including interest), and the facts of the breach of contract. You must attach copies of the unpaid invoices, the signed contract, and any relevant emails. You can file this form online through the Ontario government portal.
Step 3: Serve the Claim and Wait for a Defence
You must physically or electronically serve the issued Plaintiff’s Claim to the defendant. Once served, the debtor has 20 days to file a Form 9A: Defence. If they fail to respond entirely, you can file for a “Default Judgment,” which means you automatically win the case without ever having to argue in front of a judge.
Step 4: Attend the Mandatory Settlement Conference
If the debtor files a defence disputing the invoice, the court will schedule a Settlement Conference. 👥 This is a mandatory, private meeting with a deputy judge. The judge will listen to both sides, explain the weaknesses in the case, and try to pressure both parties to agree to a payment plan. Over 70% of Small Claims cases are settled at this stage. If no agreement is reached, the case proceeds to a formal trial.
How Much Does it Cost in Ontario?
One of the main benefits of Small Claims Court is that the government fees are significantly lower, making it financially viable to chase smaller debts. 💵 As of 2026, here is the basic cost structure in CAD:
- Filing the Claim: The court fee to issue a Plaintiff’s Claim online is $108 CAD.
- Trial Scheduling Fee: If the case does not settle and you request a trial date, the court charges $308 CAD for infrequent claimants (fewer than 10 claims/year) or $403 CAD for frequent claimants under O. Reg. 332/16.
- Paralegal / Lawyer Fees: If you hire a licensed paralegal or a law firm to handle the entire process for you, representation typically costs between $1,500 and $3,500 CAD depending on whether the case goes to trial.
- Enforcement Costs: If you win but they still refuse to pay, hiring a bailiff to garnish their bank accounts or seize assets usually costs an extra $150 to $300+ CAD in administrative fees.
| Court Stage | Required Form | Government Fee (CAD) |
|---|---|---|
| Starting the Lawsuit | Form 7A: Plaintiff’s Claim | $108 |
| Default Judgment (If ignored) | Form 11B: Default Judgment | $0 |
| Going to Trial | Form 9B: Request to Set Action Down | $308 or $403 |
How Long Does the Process Take?
While designed to be fast, the court system still experiences backlogs. ⏳ Filing the claim and waiting for the 20-day defence period takes about one month. If the debtor defends the claim, waiting for your mandatory Settlement Conference date usually takes 3 to 6 months. If you cannot settle and must proceed to a full trial, expect the entire process to take anywhere from 9 to 18 months from the day you filed the initial paperwork.
Frequently Asked Questions (FAQ)
What if they owe me $40,000? Can I still use Small Claims?
Yes, you can recover the full $40,000 without abandoning any money, as the Small Claims Court limit in Ontario is officially $50,000 CAD. You are only required to abandon the excess amount if your total claim exceeds the $50,000 threshold and you still prefer to stay in Small Claims to avoid the higher costs of Superior Court.
How do I force them to pay if I win the trial?
A court judgment is just a piece of paper; it does not automatically put money in your account. You must enforce it. You can file a Notice of Garnishment against their corporate bank account, or file a Writ of Seizure and Sale to have a bailiff seize their business equipment.
Can I sue the business owner personally for a corporate debt?
Generally, no. A corporation is a separate legal entity. Unless the business owner signed a “Personal Guarantee” when they agreed to your invoice or contract, you can only sue the corporation itself.
Will the judge make them pay my paralegal fees?
If you win your case, the judge will usually award you “costs” to cover your legal representation. However, in Small Claims Court, these costs are strictly capped at a maximum of 15% of the total amount of the claim, plus your court filing fees.
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