Criminal Interest Rate Regulations (SOR/2024-114)

Marginal note:Criteria

1 For the purposes of subsection 347.01(1) of the Criminal Code, section 347 of that Act does not apply in respect of an agreement or arrangement if

• The following provision is not in force.

  (a) the borrower is not a natural person;

• The following provision is not in force.

  (b) the borrowing is for a business or commercial purpose; and

• The following provision is not in force.

  (c) either

  • (i) the amount of the credit advanced is more than $10,000 but less than or equal to $500,000 and the annual percentage rate of interest — calculated in accordance with generally accepted actuarial practices and principles — does not exceed 48% on the credit advanced, or

  • (ii) the amount of the credit advanced is more than $500,000.

Marginal note:Criteria

2 For the purposes of subsection 347.01(1) of the Criminal Code, section 347 of that Act does not apply in respect of an agreement or arrangement if

• The following provision is not in force.

  (a) the person who receives interest carries on a business related to pawnbroking;

• The following provision is not in force.

  (b) the credit is advanced in exchange for the pawning of tangible personal property or corporeal movable property, other than a vehicle;

• The following provision is not in force.

  (c) in the event of the borrower’s default, the only recourse of the person referred to in paragraph (a) is the seizure of the pawned property; and

• The following provision is not in force.

  (d) the amount of the credit advanced is less than $1,000 and the annual percentage rate of interest — calculated in accordance with generally accepted actuarial practices and principles — does not exceed 48% on the credit advanced.

Marginal note:Limit on total cost of borrowing

• The following provision is not in force.

  3 (1) For the purposes of paragraph 347.1(2)(a.1) of the Criminal Code, the limit on the total cost of borrowing under a payday loan agreement is 14% of the amount of money advanced to the borrower under the agreement.

• The following provision is not in force.

  Marginal note:Clarification

  (2) In determining whether a payday loan agreement complies with the limit fixed under subsection (1), the total cost of borrowing does not include a fee, fine, penalty or other charge that is specifically authorized under the applicable provincial law and imposed on the borrower

  • The following provision is not in force.

    (a) for defaulting in any payment; or

  • The following provision is not in force.

    (b) for providing a dishonoured cheque or other dishonoured instrument, if the amount of the fee, fine, penalty or other charge is $20 or less.

• The following provision is not in force.

  Marginal note:Definition of applicable provincial law

  (3) In subsection (2), applicable provincial law means the legislative measures referred to in subsection 347.1(3) of the Criminal Code that apply in the province in which the payday loan agreement is entered into.