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ARTICLE · 23 JANUARY 2024

Proposed Changes To The Criminal Rate Of Interest

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On June 22, 2023, the Government of Canada's Bill C-47, the Budget Implementation Act, 2023, No. 1 (Bill C-47) received royal assent.1 Bill C-47 proposes to...

CanadaCriminal Law
Lauren Grossman
Lauren Grossman
Erin Curtis
Erin Curtis
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AMENDMENT TO CRIMINAL RATE OF INTEREST

On June 22, 2023, the Government of Canada's Bill C-47, the Budget Implementation Act, 2023, No. 1 (Bill C-47) received royal assent.1 Bill C-47 proposes to, among other things, lower the current criminal rate of interest set out in Section 347 of the Criminal Code (the Code) from an effective annual rate (EAR) that exceeds 60% to an annual percentage rate (APR) that exceeds 35%.2

OBJECTIVE

The federal government's objective in making changes to the criminal rate of interest is to combat predatory lending practices and protect consumers to avoid Canadians trapped in a "cycle of debt."3 However, because "credit advanced" and "interest" have been defined broadly in Canadian case law to encompass most charges and expenses,4 the initial concern was that the proposed amendments to Section 347 of the Code were overly broad and could impact many commercial transactions with a lending component.

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