Criminal Interest Rate Reduced To Crack Down On Predatory Lending

On December 23, 2023, the Criminal Interest Rate Regulations (Regulations) were published together with a Regulatory Impact Analysis Statement (RIAS). The Regulations are subject to a 30-day consultation period ending on January 22, 2024. The Regulations build on amendments to the criminal interest rate provisions of the Criminal Code, which were introduced as part of the Budget Implementation Act, 2023, No. 1 in May 2023.

What you need to know

• Currently, all loans are subject to the 60% effective interest rate cap set out in section 347 of the Criminal Code without exception. The amendments to the Criminal Code are intended to crack down on predatory lending and to help prevent consumers from becoming trapped in a cycle of debt by:
  • moving from an effective annual rate to an annual percentage rate (APR);