You're welcome Lipton.
Ok, a layman's interpretation.
EXAMPLE 1:
Let's say I lend you $1,000 today, March 2007 and you promise to pay it back to me on July 1, 2007.
July 1, 2007 comes along, and you do NOT pay me back.
Well, the SOL starts on July 1, 2007. The day that I first discovered you wronged me (by not paying me my money). Therefore, the SOL runs until July 1, 2009.
EXAMPLE 2:
I am your accountant.
You come to me today, March 2007 and ask me to prepare your 2006 tax returns. I do it for you, and I tell you that you owe $18,000 in taxes. You pay your taxes, pay me a $1,000 fee and we say good bye. Next year and all other years, you decide to do your taxes on our own (just to simplify the example).
Now on February 3, 2010, the CRA (Canada Revenue Agency) calls you up and says, we are doing an audit of you for the years 2005, 2006, 2007 and 2008.
They investigate and come to the following conclusions:
- Your 2005, 2007, 2008 taxes were done perfectly
- Your 2006 taxes were done incorrectly. You only paid 18,000 in taxes, you should have paid 38,000! You now owe 20,000 PLUS interest.
Well, I did your 2006 taxes. I wronged you.
If we go by the 2 yr SOL…I did the work for you March 2007, so the SOL would have expired in March 2009.
It is now 2010, what can you do?
Well, the SOL starts on the day the CRA informs you of the problem. The day you first learned you were wronged.
So the SOL would run from Feb 2010 – Feb 2012
Now, the ultimate limitation period basically means you can't come back after me forever and ever. If you don't realize I made a mistake until May of 2037, well, you are out of luck. It has been way too many years (30) to come after me. You only have a MAXIMUM of 15 years.
If you realized the mistake after 14 years, then you would only have 1 year of SOL remaining.
And for the Limitations Act from Ontario's website directly, it is:
Limitations Act, 2002, S.O. 2002, c. 24, Sched. B
Same context as the other link, just a different source.