It's Official—Proposed Criminal Interest Rate Amendments Introduced

On April 20, 2023, the Canadian government introduced Bill C-47, the Budget Implementation Act, 2023, No. 1 (the Bill), which includes the long awaited proposed amendments to the criminal interest rate.

If the Bill is passed, criminal interest will be defined as: "an annual percentage rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds 35 percent on the credit advanced". Criminal interest will continue to include charges and expenses paid or payable for the advancing of credit and continue to exclude certain amounts such as insurance charges and amounts to be paid in respect of property taxes. Importantly, the proposed legislation excludes certain agreements or arrangements as provided for in the regulations. However, at this point, no regulations have been proposed so it is unknown which agreements are excluded from the application of the criminal interest rate provisions.