What rights do collection agencies have when they call you, can they threaten to take you to court

I am not sure how different Canadian laws differ from US laws regarding collection. In the US they can call you between 8am and 9pm Monday through Saturday, and are not allowed to do so on Sunday (though many still do so anyway.) They are allowed to call you at work until you specify that you are not to be called at work. And yes, they have the right to threaten you with legal action.

That is in the US. I would suggest you contact the Office of the Privacy Comissioner of Canada (http://www.privcom.gc.ca/index_e.asp) and ask them where you can find a list of your rights under Canadian law.

Good luck.

This website will assist you will all your questions:
Service Alberta - Home (http://governmentservices.gov.ab.ca/tipsheets/bill_collection.cfm)

It is a website run by the province of Alberta and this particular link directs you to where they are talking about their legislation.