Limitations Act 2002 Ontario: The 2-Year Clock for Small Claims
Every civil claim in Ontario has an expiry date. If you wait too long to sue, it doesn't matter how strong your case is — the court will dismiss it. The Limitations Act, 2002 sets the rules, and understanding them is the difference between a valid claim and a dead one.
The Two-Year Basic Limitation Period
Under Section 4 of the Limitations Act, 2002, you must start a civil proceeding within two years from the day you discovered your claim. This is the basic limitation period, and it applies to virtually every Small Claims Court action — unpaid invoices, breach of contract, property damage, consumer disputes.
The two-year clock starts ticking on the date you knew (or ought to have known) three things simultaneously under Section 5(1):
- An injury, loss, or damage occurred
- It was caused by an act or omission of the person you're suing
- A court proceeding would be an appropriate way to address it
For most disputes, this is straightforward. If a contractor took your deposit and walked off the job on March 15, your two-year clock started that day. If you received a defective product and the vendor refused a refund on June 1, the clock started June 1.
The "ought to have known" standard matters. If your basement leaked because of a contractor's shoddy waterproofing, but you didn't discover the defect until six months later when water appeared, the clock starts at discovery — not at the date of the work. But if the defect was visible and you ignored it for a year, the court may find you ought to have discovered it earlier.
The 15-Year Ultimate Limitation Period
Section 15 imposes a hard backstop: 15 years from the date of the act or omission that caused the claim. No discovery argument can push past this ceiling.
This mainly matters for latent defects — damage that takes years to surface. If a building was constructed with defective materials in 2012 and the problems only appeared in 2026, the two-year discovery clock starts in 2026, but the entire claim must be brought before 2027 (15 years from 2012). If the defect surfaces after the 15-year ultimate period, the claim is extinguished regardless of when it was discovered.
Restarting the Clock
Two events can reset the two-year limitation period:
Written acknowledgment of liability. Under Section 13(1) and 13(10), if the debtor provides a clear, unequivocal, signed written acknowledgment that they owe you money, the two-year clock restarts from the date of that acknowledgment. This includes email — if the debtor writes "I know I owe you $5,000 and I'll pay when I can," that restarts the clock from the date of that email, provided the email is verifiable.
Partial payment. Under Section 13(11), a payment toward the debt resets the clock from the payment date. If someone owes you $10,000 and pays $500 on January 1, the two-year period runs from January 1.
The critical catch is Section 13(9): an acknowledgment or partial payment only resets the clock if it happens before the original two-year period expires. An acknowledgment made after the limitation period has run cannot revive an expired claim. A $100 payment in year three doesn't help — the claim was already dead.
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What Doesn't Stop or Extend the Clock
Several things that people assume pause the limitation period actually don't:
- Sending demand letters
- Verbal promises to pay
- Ongoing settlement negotiations (unless formalized)
- Filing a complaint with a regulatory body
- Waiting for insurance to respond
The clock runs regardless. Settlement discussions do not suspend it. If you're negotiating with the other side and the two-year mark is approaching, file your claim first and continue negotiating — you can always discontinue the action if you settle.
Limitation Period for Specific Claim Types
While the two-year basic period covers most Small Claims Court disputes, some claims have their own statutory timelines:
- Residential tenancy (LTB): Landlords must file claims against former tenants within one year of the tenant vacating — not through Small Claims Court, but at the Landlord and Tenant Board
- Employment standards: Claims under the Employment Standards Act, 2000 have specific filing timelines with the Ministry of Labour
- Construction liens: Strict preservation and perfection deadlines under the Construction Act
For standard Small Claims Court claims — unpaid debts, contract breaches, property damage — the Limitations Act, 2002 two-year rule governs.
Practical Steps
If you think you have a claim, check the calendar before doing anything else. Count two years from the date of discovery (or from the date of the last written acknowledgment or partial payment, whichever is later). If the deadline is approaching, file your Plaintiff's Claim immediately — you can always refine the details later through amendments.
The limitation period applies to the filing date, not the service date. As long as the court clerk issues your claim (assigns a file number) before the two-year mark, you're within time. You then have six months to serve the defendant.
For the full process of filing and serving your claim before the deadline, our Ontario Small Claims Filing Guide walks through every step in order.
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