I was just wondering if a collection agency based out of say for example Canada collect money from a Canadian resident? What are the rules for other countries?
I suppose it would depend upon where they were licensed to operate. In most countries debt collection companies are regulated and licensed, although some may have a relationship with similar companies in other countries. Their operating licence will be for the country/state they operate in, not the nationality of the person they are contacting. In most countries these companies have no real power unless acting under the orders of a court but they can call you and write to you - unless you're dealing with one of the more unscrupulous ones where they may send someone to visit you without an appointment.
In most cases they'll be licensed to collect. Check out the specific company and see if they have any legal right to pursue you.
There is a limit to what they can do to collect from you, find out the rules in your country. Mostly they are bluffing but larger collections could affect your credit rating.