A federal licence denial is one of the collection tools the Maintenance Enforcement Program (MEP) may use when a debtor is in arrears.

Where the debtor has failed to make payments in full for three payment periods or has accumulated arrears of $3,000 or more, MEP may apply to the federal government’s Family Orders and Agreements Enforcement Assistance (FOAEA) Unit for a federal licence denial. FOAEA provides for the denial of certain federally issued licences, including aviation and marine licences, and passports.

Before issuing a federal licence denial, MEP must send a notification letter to the debtor’s last known address. This letter warns of the pending licence denial and requests that the debtor contact MEP to make payment arrangements. From the date the notification is mailed, the debtor is given 40 days to respond to the notification. If the debtor contacts MEP and makes reasonable payment arrangements, the federal licence denial will not be completed. However, if no response is received from the debtor within 40 days, MEP will process the licence denial.

If the debtor holds a federal licence or Canadian passport, the appropriate federal department will suspend the licence or passport and refuse to renew it. That federal department will then send the debtor notification that the action has been taken. If the debtor is not a current holder of a licence or passport, the debtor’s name will be placed on a control list to prevent future issuance of a licence or passport. This control will remain in effect until a request to terminate it is received from MEP.

It is an offence for a person notified of the suspension of his/her passport to use it or to fail to return the passport to a passport office. The offence carries a fine of $5,000 or imprisonment for a term not exceeding six months or both. Federal RCMP conduct active investigations to recover unreturned passports.

Should the debtor contact MEP staff and make satisfactory payment arrangements, MEP will apply to have the federal licence denial terminated. However, it may take up to 14 days for MEP to initiate removal of the licence denial.

For additional information on federal licence denials and FOAEA, you may wish to access the Justice Canada website.