On July 22, 2023,
the Government of Canada released the Budget Implementation Act, 2023, No.
1. Among other things, the Budget Implementation
Act amended section 347 of the Criminal Code,
changing the criminal interest rate across Canada
effective January 1, 2025.
The criminal interest rate is the maximum rate at which a lender
can charge interest on a loan before it becomes a crime. Under the
old section 347, the criminal interest rate was 60% Effective
Annual Rate (EAR), or approximately 48% Annual
Percentage Rate (APR). Under the new Budget Implementation
Act, the criminal interest rate will be lowered to
35% APR.
Purpose behind the new rate
The purpose behind the new rate change was explained in the
Government's Regulatory Impact Analysis Statement, which
was released in the Canada Gazette on December 23, 2023 alongside
the Criminal Interest Rate Regulations.
The Criminal Interest Rate Regulations also contain
three exemptions from the new rate,
