Program to Improve Debt Collection

Nova Scotia is taking an extra measure to reach those who owe money to the province. Robbie Harrison, Minister of Business and Consumer Services, said Nova Scotia's participation in Revenue Canada's Refund Set Off Program will help recover outstanding debt to the province by using a debtor's federal income tax refund or GST rebate.

"It isn't fair to collect only from those who co-operate in repaying outstanding debt," said Mr. Harrison. "We can't expect everyone to shoulder the burden for those ignoring payment of debts due the province. The Refund Set Off Program will help us level the playing-field for the benefit of all Nova Scotians."

Most outstanding debt is a result of fines for violations such as drinking and driving, assaults and speeding; unpaid sales tax; and overpayment of benefits.

After attempts to reach individuals with outstanding debts are unsuccessful, accounts will be forwarded to Revenue Canada for inclusion in the Refund Set Off Program. Individuals with overdue accounts will then receive written notice from Revenue Canada requesting repayment arrangements be made with Business and Consumer Services. Exceptions will be made if clients can substantiate an inability to pay. If no contact is made or suitable arrangements not reached, federal income tax returns or GST refunds for non-complying individuals will be used to set off the debt.

Debtors with an annual income below $17,000 will not be affected by this program. Child tax credits will also be unaffected under this program.

Officials estimate the Refund Set Off Program will help Nova Scotia recover $750,000 in 1998-99 through set-off and voluntary repayment. Business and Consumer Services will administer the program for a number of other provincial government departments. As of Jan. 1, 1999, $30 million in fines, sales tax and benefit overpayments remains outstanding.

British Columbia and Ontario are also participating in the program, with other provinces expected to join next year.