Regulatory Initiative: Criminal Interest Rate Regulations – Forward Regulatory Plan 2023-2025

Criminal Interest Rate Regulations

Criminal Code

In Budget 2023, the federal government announced its intention to fight predatory lending by lowering the criminal interest rate to 35 per cent APR and cap the cost of borrowing on payday lending to $14 per every $100 borrowed. The proposed Criminal Interest Rate regulations exempt certain types of loans from the criminal interest rate in the Criminal Code and set a limit on the cost of borrowing for a payday loans.

The Department has consulted provincial partners with existing payday lending regimes in developing these proposed regulations.  

Canadians who use payday loans or loans from alternative lenders—among which women, Indigenous Peoples and Canadians with low incomes are overrepresented—may benefit from these proposed regulations as they may experience a lower cost of borrowing on payday loans.

Businesses and commercial borrowers, such as venture capital/private equity lenders and automotive floor financers, may benefit from the proposed exemptions to the criminal rate as these will allow them to offer and/or contract loans at higher rates than 35 per cent APR.  

Stakeholders’ consultations were conducted in Fall 2022 on fighting predatory lending by lowering the criminal interest rate, during which feedback was provided on potential exemptions to the rate on payday lending. The proposed regulations were pre-published to the Canada Gazette, Part 1 on December 23, 2023. The formal comment period ended January 22, 2024.

Judith Hamel
Director General, Financial Services Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin St.
Ottawa, Ontario K1A 0G5
Email: Judith.Hamel@fin.gc.ca

November 2023