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ARTICLE · 26 JANUARY 2024

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Criminal Interest Rate: Canada Sets High Stakes For High Rates

Borden Ladner Gervais LLP
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As it revisits decades-old regulations on what constitutes a criminal interest rate, Canada challenges lenders to remain profitable under substantially tighter margins.

CanadaCriminal Law
Guillaume Talbot-Lachance
Guillaume Talbot-Lachance
Matthew Connors
Matthew Connors
Kaliopi Dimitrakoudis
Kaliopi Dimitrakoudis
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As it revisits decades-old regulations on what constitutes a criminal interest rate, Canada challenges lenders to remain profitable under substantially tighter margins.

What you need to know

On Dec. 23, 2023, the federal government published the much-anticipated Criminal Interest Rate Regulations (the Regulations) in the Canada Gazette, inviting public feedback until Jan. 22, 2024.

These Regulations are necessary to implement amendments brought by the Budget Implementation Act, 2023, No. 1 to section 347 of the Criminal Code. The amendments will lower the criminal annual rate of interest from the current 60 per cent (effective annual interest rate) to an annual percentage rate (APR) of 35 per cent. They will also narrow the types of agreements and arrangements to which this criminal offence applies. Though not yet in force, the Regulations aim to combat predatory lending practices and reform Canada's framework for consumer financial protection and regulation.

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