Sarnia Council is set to discuss a proposal on Tuesday that would allow collection agencies to recover unpaid debts owed to the municipality as part of the 2025 budget. Under the policy, authorized by Section 304 of Ontario’s Municipal Act, collection agencies would be permitted to recover these debts along with reasonable costs from collecting the debt directly from residents.
The proposal raises questions about its implementation and potential impact, including:
- How will unpaid debts be managed? Will the city retain responsibility for the debt until it is recovered, or will collection agencies assume full responsibility?
- Will collection agencies pay for the debt upfront, or will they charge a fee for their services? If the latter, how will these fees be regulated?
- How will this policy interact with existing processes for unpaid property taxes, such as tax sales or payment plans?
- What measures will be in place to ensure collection tactics are appropriate, particularly for vulnerable residents?
- What recourse will residents have if they believe a collection agency acted improperly?
Additionally, as part of the broader 2025 Fees for Services report, Council will consider raising the interest rate on overdue accounts receivable from 15% to 24% annually, aligning with market standards. Responsibility for managing overdue accounts would also shift from the Corporate to the Finance department, a change intended to streamline processes. However, the higher interest rate could create additional challenges for residents and businesses behind on payments.
The proposal also raises questions about public engagement and transparency. Has there been a consultation with residents about these changes? Clear communication about how debts will be managed and collected may help to address potential concerns and build trust in the decision-making process.
As Council prepares to deliberate, it remains to be seen whether collection agencies will become part of Sarnia’s approach to recovering unpaid municipal debts.
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