I also found this. Looks like they weren't allowed to deduct the amount I "owe" off my last paycheck? (from the employment standards act Ontario)
13 (1) An employer shall not withhold wages payable to an employee, make a deduction from an employee’s wages or cause the employee to return his or her wages to the employer unless authorized to do so under this section. 2000, c. 41, s. 13 (1).
Statute or court order
(2) An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them if a statute of Ontario or Canada or a court order authorizes it. 2000, c. 41, s. 13 (2).
(3) An employer may withhold or make a deduction from an employee’s wages or cause the employee to return them with the employee’s written authorization. 2000, c. 41, s. 13 (3).
(4) Subsections (2) and (3) do not apply if the statute, order or written authorization from the employee requires the employer to remit the withheld or deducted wages to a third person and the employer fails to do so. 2000, c. 41, s. 13 (4).
(5) Subsection (3) does not apply if,
(a) the employee’s authorization does not refer to a specific amount or provide a formula from which a specific amount may be calculated;
(b) the employee’s wages were withheld, deducted or required to be returned,
(i) because of faulty work,
(ii) because the employer had a cash shortage, lost property or had property stolen and a person other than the employee had access to the cash or property, or
(iii) under any prescribed conditions; or
(c) the employee’s wages were required to be returned and those wages were the subject of an order under this Act. 2000, c. 41, s. 13 (5).
Priority of claims
14 (1) Despite any other Act, wages shall have priority over and be paid before the claims and rights of all other unsecured creditors of an employer, to the extent of $10,000 per employee. 2000, c. 41, s. 14 (1).
(2) Subsection (1) does not apply with respect to a distribution made under the Bankruptcy and Insolvency Act (Canada) or other legislation enacted by the Parliament of Canada respecting bankruptcy or insolvency. 2001, c. 9, Sched. I, s. 1 (3)