Garnishment

Garnishment is a court-ordered process that lets someone who holds a judgment against you intercept money before it reaches you — most commonly a slice of every paycheque, taken at the employer level, or funds seized directly from your bank account. The garnishable share of wages varies sharply by province rather than sitting in one consistent range. Ontario's Wages Act exempts 80% of net wages for ordinary debts, so up to 20% is garnishable. BC's Court Order Enforcement Act exempts 70%, so up to 30% is garnishable, with a minimum monthly exemption floor. Alberta doesn't use a flat percentage at all: its Civil Enforcement Regulation exempts roughly the first $800 of monthly net income (plus $200 per dependant), allows up to 50% garnishment of income between that floor and about $2,400 a month, and permits full garnishment of net income above that ceiling. Support orders can take considerably more in every province.

Why it matters to you#

Garnishment is what "you owe the difference personally" actually looks like. When a court award exceeds your liability limit, the plaintiff doesn't send a polite invoice — their lawyer enforces the judgment, and wages are the most reliable target because they arrive on schedule. Your employer receives the garnishment order and must comply; the deduction shows up before your pay does. Bank accounts can be garnished too, typically frozen and swept in one motion. And because Canadian judgments generally accrue interest and can be renewed — commonly for another 10 years in BC and Alberta, and up to 20 years in Ontario — garnishment on a large shortfall isn't an episode — it's a payroll deduction that can follow you from job to job for years. Bankruptcy doesn't reliably clear judgment debts arising from negligence, either.

In practice#

Say a court awards $2.5 million and your policy pays its $1 million limit, leaving $1.5 million, on a $90,000 net income:

• In Ontario, up to 20% is garnishable — about $18,000 a year toward the judgment, before interest.
• In BC, up to 30% is garnishable — about $27,000 a year.
• In Alberta, the graduated formula can garnish a much larger share of a mid-to-high income: roughly the first $800 a month is exempt, up to 50% of the next portion up to about $2,400 a month is garnishable, and net income above that is garnishable in full — which can mean far more than 20–30% is taken from someone earning $90,000 a year.
• Your bank account can be swept on top of wage garnishment; the two aren't alternatives.
• Exact figures, exemptions, and procedures differ by province and can change — confirm the current numbers with a lawyer or licensed insolvency trustee before relying on them.

The cheapest defence against a lifetime deduction is a bigger limit bought in advance.

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