Proposed Changes To Criminal Interest Rate Regime In Canada

In the 2023 Federal Budget, the Canadian federal government expressed its intention to reduce the criminal rate of interest currently set out in the Criminal Code¹to protect financially vulnerable Canadians from predatory lending practices.² Generally, predatory lending involves certain lenders taking advantage of borrowers by imposing unfair loan terms. These loans often carry high interest rates and fees, often making them unaffordable or difficult for individuals to pay back, particularly low-income Canadians and those with a limited credit history.

On June 22, 2023, Parliament approved Bill C-47 (the "Bill") to implement the proposed changes discussed in the 2023 Federal Budget. However, the amendments introduced by the Bill are not yet in force – they will only become effective at a later date determined by order of the Governor in Council. Once effective, the proposed amendments to section 347 of the Criminal Code will: (i) revise the definition of "criminal