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ARTICLE · 10 SEPTEMBER 2024

New Criminal Interest Rate Regulations: A Safe Haven—for Some Lenders

Wildeboer Dellelce LLP
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The Government of Canada recently introduced the Budget Implementation Act, 2023, No. 1 (the "Budget Implementation Act") and the Criminal Interest Rate Regulations (the "Regulations")...

CanadaFinance and Banking
Rachel Manno
Rachel Manno
Krystle Formhals
Krystle Formhals

The Government of Canada recently introduced the Budget Implementation Act, 2023, No. 1 (the "Budget Implementation Act") and the Criminal Interest Rate Regulations (the "Regulations") in an effort to crack down on predatory lending. Both acts will come into force as of January 1, 2025.

In 2023, when the Government of Canada announced its intention to lower the criminal rate of interest, lenders worried that the combination of interest, fees, commissions and other charges and expenses payable under or in connection with their loan agreements would qualify as "criminal." The new legislation is not bad news for all lenders, however. A large proportion of commercial lenders can rest assured that their commercial loans benefit from exceptions set out in the Regulations.

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