Yes, a Canadian can sue an American. The lawsuit can be filed in a Canadian court or in a U.S. court, and the right choice depends on where the dispute is connected, where the defendant lives, and where any money or property that could satisfy a judgment is located. The harder questions aren’t whether the suit is allowed but how to serve the defendant across the border, which court actually has authority to hear the case, and how to collect once you win.
When a Canadian Court Can Hear the Case
A Canadian court will take jurisdiction over an American defendant only if the dispute has a “real and substantial connection” to the province where the case is filed. The Supreme Court of Canada built a framework around four presumptive connecting factors for tort claims: the defendant lives or is based in the province, carries on business there, committed the tort there, or made a relevant contract there. Show one of those, and the court will presumptively take the case unless the defendant can knock the presumption down.
In practical terms, a Canadian court can hear a claim against an American who caused a car accident in Ontario, shipped defective products into British Columbia, or signed a contract that was negotiated in Alberta. If the American has never set foot in Canada, done business there, or signed anything connected to the country, pulling them into a Canadian courtroom is going to be very hard. In that situation, filing in the U.S. is usually the better route.
Suing in a U.S. Court Instead
A Canadian plaintiff can bypass Canadian courts and sue the American where they live. U.S. federal courts have “alienage jurisdiction” over lawsuits between a citizen of a U.S. state and a citizen of a foreign country as long as more than $75,000 is at stake, excluding interest and costs.1Office of the Law Revision Counsel. 28 USC 1332 – Diversity of Citizenship; Amount in Controversy; Costs The amount the plaintiff claims is accepted at face value if made in good faith.
If the claim is worth less than $75,000, federal court is off the table, but a Canadian plaintiff can still file in a U.S. state court where the defendant lives or where the events happened. State courts don’t apply the same dollar threshold.
Filing in the U.S. has one big practical advantage: whatever judgment you get is already a domestic U.S. judgment, so there’s no separate recognition step before you can start collecting. The tradeoff is that you’re litigating in an unfamiliar system, probably far from home, and you’ll need a U.S.-licensed attorney in addition to any Canadian lawyer already helping you.
Serving the American Defendant
Once a case is filed, the defendant has to be formally notified. When those documents cross an international border, the Hague Service Convention controls the process, and both Canada and the United States are parties to the treaty.2U.S. Marshals Service. Hague Convention on the Service Abroad
Service Through the Central Authority
The Convention’s main channel routes documents through a designated Central Authority in the receiving country. For service into the United States, that’s the Office of International Judicial Assistance at the U.S. Department of State.3U.S. Department of State. Service of Process The office arranges delivery under the laws of the state where the defendant is located. It works, but it’s slow. Turnaround through the Central Authority often runs several months.
Service by Mail
The Convention also allows service by postal channels under Article 10(a), as long as the receiving country hasn’t objected. Neither Canada nor the United States has objected.4HCCH. Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters Mail service is faster, but some courts still insist on the Central Authority channel regardless of what the treaty permits, so confirm what the specific court will accept before relying on it.
If the Defendant Simply Ignores the Papers
A U.S. defendant who receives the documents and does nothing cannot be defaulted on the spot. Article 15 of the Convention requires the court to confirm proper service and allow enough time for a defense. If no proof of delivery has come back, the court must wait at least six months from the date the documents were transmitted, and even then only after reasonable efforts to confirm delivery.5United Nations Treaty Series. Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters Botched service doesn’t just delay things. It can make the final judgment unenforceable, which is why cutting corners here is the single most common way cross-border cases fall apart.
Watch the Limitation Clock in Both Countries
The deadline to file suit is not the same on both sides of the border. Most Canadian provinces impose a two-year limitation period for general civil claims. U.S. jurisdictions tend to run longer, often four to six years for contract claims, though the specifics vary by state and by claim type.
Which deadline applies turns on which court hears the case and that court’s choice-of-law rules. A plaintiff filing in Canada will generally be bound by Canadian limitation periods. One filing in the U.S. will usually face the limitation period of the state where the court sits, except some states have “borrowing statutes” that import the shorter period from wherever the claim arose. The safest move is to file within the shorter of the two possible windows. Waiting to sort out which one technically governs is a gamble that often ends badly.
Collecting on a Canadian Judgment in the United States
Winning in a Canadian court is only part of the job if the defendant and their money are in the United States. A Canadian judgment has no automatic force south of the border. To collect, you have to ask a U.S. court to recognize and domesticate the judgment, turning it into a U.S. judgment that American collection tools like wage garnishment and asset seizure can reach.
You file an action in a U.S. court, usually in the state where the defendant lives or holds assets. Most states have adopted some version of the Uniform Foreign-Country Money Judgments Recognition Act. The U.S. court doesn’t retry the case or second-guess the merits of the Canadian ruling. It checks whether the Canadian proceedings met basic fairness standards.
Grounds the Court Must Refuse
A U.S. court must refuse to recognize a Canadian judgment if the defendant proves one of these:
- The Canadian court system didn’t provide impartial tribunals or due process. This almost never succeeds against Canadian judgments.
- The Canadian court lacked personal jurisdiction over the defendant.
- The Canadian court lacked subject matter jurisdiction over the dispute.
Grounds the Court May Refuse
Beyond the mandatory bars, a U.S. court has discretion to refuse recognition on several additional grounds. The ones that come up most often in practice:
- The defendant didn’t receive notice of the Canadian proceeding in time to defend.
- The judgment was obtained by fraud that kept the losing party from presenting their case.
- The judgment or the underlying claim is repugnant to the public policy of the state or of the United States.
- The judgment conflicts with another final judgment.
- The parties had agreed to resolve the dispute somewhere other than the court that issued the judgment.
- Circumstances raise substantial doubt about the integrity of the court that rendered the judgment.
The defendant carries the burden on all of these. Canadian judgments rarely fall on mandatory grounds, but discretionary challenges around notice or forum-selection agreements do surface.
Tax on What You Collect
Money received from a U.S. defendant through a judgment or settlement carries U.S. tax consequences, and how those payments are taxed depends on what they’re meant to replace.6Internal Revenue Service. Tax Implications of Settlements and Judgments
Compensation for physical injuries or physical sickness is generally excluded from U.S. gross income. Medical bills and pain and suffering tied to a physical injury from, say, a Toronto car crash aren’t taxable under U.S. rules. Punitive damages are always taxable, with a narrow exception for wrongful death claims in states that only allow punitive damages in that context. Damages for non-physical harms like defamation, emotional distress unconnected to a physical injury, or breach of contract are generally taxable income.
Canadian tax rules also apply, and the Canada-U.S. tax treaty includes provisions designed to prevent double taxation. Before any significant payment changes hands, a cross-border tax professional is worth the call.
Choosing Between Canada and the U.S.
Cross-border litigation is expensive. You’ll likely need lawyers in both countries, documents may need translation or authentication, and filing fees apply in every jurisdiction where you file. The choice of forum usually comes down to where the defendant’s assets are. Winning in Canada and then domesticating the judgment in the U.S. means two rounds of litigation and two sets of legal bills. Filing directly in the U.S. where the defendant lives and holds assets can be more efficient, even though it puts you in a foreign court. If the dispute arose entirely in Canada, the evidence is Canadian, and the witnesses are Canadian, a Canadian court may still be the practical forum despite the enforcement step that follows.