Premier Fitness Unauthorized Automatic Renewal Mississauga, Ontario Canada

 A week ago, I received a letter from their lawyer's office that I owe them about $800 because the contract was automatically renewed in October, 2009 since I didn't sign the termination agreement. I read over the contract I signed, and found out that the agreement states: [t]he member will be notified of the renewal in writing at least 30 days but not more than 90 days before [the] agreement expires at the address noted on [the] agreement". I NEVER received any letter from them regarding the renewal, which means Premier Fitness breached the contract themselves and cannot ask me to pay the outstanding $800. Furthermore, I read over the Consumer Protection Act, and it states that a services contract cannot be automatically renewed unless the signor was notified in writing 30 days in advance. I emailed the representatives at their headquarter and they just keep saying that I need to pay them $800 ASAP. Ridiculous. 

My questions for you: what are the consequences of not paying the outstanding balance they are demanding? I know they are engaging in illegal business practice and am ready to report them to appropriate government agencies if necessary. Can I just ignore them because they are just making empty threats? Or should I take more aggressive measures? What do you guys think??