Parliament Combats Predatory Lending Practices With Criminal Code Amendments

On January 1, 2025, section 347 of the Criminal Code reduced the criminal interest rate while shifting the calculation from an effective annual interest rate (EAR) to an annual percentage rate (APR). By shifting the calculation from EAR to APR, lenders will now be committing a criminal offence if entering or providing arrangements at an interest rate exceeding 35% APR – a 12% decrease from the previous provision. The amendments are accompanied by the new Criminal Interest Rate Regulations, which exclude three types of lenders from the 35% APR limit.

A brief history of lending rates

Since its enactment in 1980, there were multiple attempts to lower the criminal interest rate in section 347, with many of the bills lapsing or stalling before serious consideration. In 2004, as a response to the successful implementation of a lower interest rate in Quebec, the first amendment proposal was introduced. Until renewed discussions on the matter appeared in 2021, however,