What is the difference between power of sale and foreclosure in Canada?

Power of sale allows the lender to sell your property without going to court (used in Ontario, PEI, New Brunswick, Newfoundland). The lender must get fair market value and return any surplus to you. Judicial foreclosure requires the lender to go through the court system (used in BC, Alberta, Saskatchewan, Manitoba). The process is slower and more expensive for the lender but gives you more court-supervised protection. In judicial foreclosure, the court may grant a redemption period during which you can pay the full amount owed to keep your home.

Can you stop a foreclosure in Canada?

Yes — at any point before the sale is finalized (or the court grants an Order Absolute), you can stop the process by paying all arrears, penalties, legal costs, and interest. In power of sale provinces, you have a redemption period (35 days in Ontario) to pay everything owed. In judicial foreclosure provinces, the court sets a redemption period. You can also stop the process by refinancing with a private lender, selling the property yourself, or negotiating a repayment plan with your current lender.

Can a lender pursue you for the shortfall after foreclosure?

It depends on the province and the process used. In an Ontario power of sale, the lender CAN pursue you for any deficiency (amount owed above what the property sold for). In BC and Alberta judicial foreclosure, if the lender chooses foreclosure (taking title), they generally CANNOT pursue a deficiency — it is an either/or choice. In Alberta, if the lender chooses judicial sale (not foreclosure), they can pursue the deficiency. Saskatchewan generally prohibits deficiency judgments on residential mortgages under The Land Contracts (Actions) Act.

Mortgage Foreclosure Process in Canada — Province-by-Province Guide

Foreclosure is the last step in a long process — and understanding that process gives you power. This guide explains exactly how mortgage default proceedings work in every Canadian province, your rights at each stage, and how to stop the process.

Two systems: power of sale vs judicial foreclosure

Canada uses two different legal mechanisms for lenders to recover when a borrower defaults:

Feature	Power of Sale	Judicial Foreclosure
Court involvement	No court required (contractual right in mortgage)	Must go through the court system
Speed	Faster (3–6 months)	Slower (6–18 months)
Cost to lender	Lower	Higher (legal fees, court costs)
Borrower protection	Less — faster timeline	More — court supervises the process
Surplus proceeds	Must be returned to borrower	Depends on whether it is sale or foreclosure order
Deficiency judgment	Lender can pursue shortfall	Depends on province and order type
Provinces	ON, NB, NL, PE	BC, AB, SK, MB, NS (some use both)

Province-by-province process

Ontario — Power of Sale

Ontario uses power of sale as the primary enforcement mechanism.

Step	Timeline	Details
Default	Day 0	Usually 3+ consecutive missed payments
Demand letter (Notice of Sale Under Mortgage)	Day 90–120	Lender sends registered mail stating the amount owed and that they will exercise power of sale
35-day redemption period	Day 120–155	You have 35 days to pay all arrears + penalties + legal costs to stop the process
If not redeemed — property listed for sale	Day 155+	Lender lists the property, typically through a real estate agent
Property sold	Day 180–270	Lender must make reasonable efforts to get fair market value
Proceeds distributed	After sale closes	Mortgage balance + arrears + legal costs + real estate fees deducted; surplus to borrower
Deficiency judgment (if shortfall)	After sale	Lender can sue you for the difference

Ontario-specific rights:

You can redeem (stop the process) at any time before the sale closes by paying all amounts owed
The lender must act in good faith and obtain fair market value
If the lender sells below market value, you can challenge the sale in court
You have the right to be in the property until the sale closes

British Columbia — Judicial Foreclosure

BC uses judicial foreclosure, which requires court involvement.

Step	Timeline	Details
Default	Day 0	Missed payments, demand letter sent
Petition filed in BC Supreme Court	Day 90–150	Lender files a foreclosure petition
Order Nisi granted	1–3 months after petition	Court grants conditional foreclosure; sets a redemption period
Redemption period	Typically 2–6 months	You can pay full amount owed (principal + arrears + costs) to keep the home
If not redeemed — Order Absolute or Order for Sale	After redemption period	Court grants one of two orders
Order Absolute	Varies	Title transfers to lender; lender takes ownership; no deficiency judgment
Order for Sale	Varies	Property listed and sold under court supervision; deficiency judgment possible

BC-specific rights:

Court must approve all steps — more protection than power of sale
Redemption period can be extended by the court in some circumstances
If the lender takes an Order Absolute (takes title), they forfeit the right to a deficiency judgment
You can apply to the court to convert a foreclosure to a sale (may result in surplus proceeds for you)

Alberta — Judicial Foreclosure

Alberta also uses judicial foreclosure but with some unique provisions.

Step	Timeline	Details
Default	Day 0	Missed payments
Demand letter	Day 60–90	Formal notice of default
Statement of Claim filed	Day 90–150	Lender files with the Court of King’s Bench
Court hearing	3–6 months after filing	Court reviews and may grant Order for Foreclosure or Order for Sale
Redemption period	Set by court (typically 1–6 months)	You can pay all amounts owed to keep the home
If not redeemed	After redemption	Either foreclosure (title to lender) or sale (court-supervised)

Alberta-specific notes:

If lender chooses foreclosure (takes title), generally no deficiency judgment
If lender chooses sale, deficiency judgment is possible
The Law of Property Act provides some protections for residential borrowers
Alberta courts may grant longer redemption periods in hardship cases

Saskatchewan — Judicial Foreclosure

Step	Timeline	Details
Default	Day 0	Missed payments
Notice of Intention to foreclose	Day 90+	Lender must provide notice
Court proceedings	3–6 months	Filed in Court of King’s Bench
Redemption period	Set by court	Typically 6 months for agricultural land, shorter for residential

Saskatchewan-specific notes:

The Land Contracts (Actions) Act generally prohibits deficiency judgments on residential mortgages
This is one of the strongest borrower protections in Canada
Lenders cannot pursue you for shortfalls after the property is sold (with limited exceptions)

Manitoba — Foreclosure

Step	Timeline	Details
Default	Day 0	Missed payments
Notice of Exercising Power of Sale	Day 90+	Lender serves notice
Redemption period	Set by The Real Property Act (varies)	Typically several months
Sale or foreclosure	After redemption	Court may be involved

Manitoba-specific notes:

Manitoba uses a hybrid system with elements of both power of sale and judicial oversight
The Real Property Act governs the process
Deficiency judgments are possible but rarely pursued on residential properties

Nova Scotia — Foreclosure and Power of Sale

Nova Scotia allows both power of sale and judicial foreclosure, depending on the mortgage terms.

Process	Timeline	Details
Power of sale	3–6 months	If the mortgage contract contains a power of sale clause
Judicial foreclosure	6–12+ months	Court-supervised process

New Brunswick — Power of Sale

Step	Timeline	Details
Default	Day 0	Missed payments
Notice served	Day 90+	As per mortgage terms
Redemption period	As specified in mortgage	Typically 1–2 months
Sale	After redemption	Lender sells; surplus to borrower

Newfoundland and Labrador — Power of Sale

Similar to New Brunswick — power of sale is the primary mechanism with notice requirements and redemption periods specified in the mortgage.

Prince Edward Island — Power of Sale

PEI uses power of sale with notice periods and borrower right to redeem before sale completion.

How to stop the process

At any stage before sale

Strategy	How It Works	Best For
Pay arrears in full	Pay all missed payments + penalties + legal costs	Borrowers who have found new income or accessed funds
Refinance with B-lender	New mortgage pays off existing mortgage and arrears	Borrowers with equity (35%+ remaining after arrears)
Refinance with private lender	Emergency refinance based on equity (up to 65–75% LTV)	Borrowers with equity but no provable income
Sell the property yourself	Voluntary sale at market value; pay off mortgage from proceeds	Better outcome than power of sale (you control the process and price)
Consumer proposal	Triggers stay of proceedings; restructures unsecured debts	Borrowers with multiple debts; stabilizes finances to resume mortgage payments
Negotiate with lender	Repayment plan for arrears over 12–24 months	Borrowers back on their feet who can afford regular payments plus catch-up

Cost to stop the process

When You Act	Approximate Cost to Cure
Before demand letter (1–2 missed payments)	Arrears + late fees ($100–$200)
After demand letter, before legal	Arrears + late fees + lender’s legal costs ($1,500–$3,000)
After legal proceedings filed	Arrears + lender’s legal costs ($3,000–$10,000) + your own legal costs
During redemption period	Full mortgage balance + all costs + lender’s legal fees

The earlier you act, the cheaper it is. Two months of arrears and a $200 late fee is far easier to resolve than $10,000+ in accumulated legal costs.

Deficiency judgment summary

Province	Process	Can Lender Pursue Deficiency?
Ontario	Power of sale	Yes — lender can sue for shortfall
British Columbia	Judicial — Order Absolute	No — lender takes title, forfeits deficiency
British Columbia	Judicial — Order for Sale	Yes — if sale does not cover debt
Alberta	Judicial — Foreclosure	No (generally)
Alberta	Judicial — Sale	Yes
Saskatchewan	Judicial	No — Land Contracts Act protects borrowers
Manitoba	Hybrid	Rarely pursued on residential
Nova Scotia	Power of sale or foreclosure	Yes (power of sale); depends (foreclosure)
New Brunswick	Power of sale	Yes
Newfoundland	Power of sale	Yes
PEI	Power of sale	Yes