Legislative Proposals Relating to the Criminal Interest Rate under the Criminal Code
SUMMARY
This enactment
His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
R.S., c. C-46Criminal Code
Amendments to the Act
1 The definitions insurance charge and interest in subsection 347(2) of the Criminal Code are replaced by the following:
- insurance charge
insurance charge means the cost, that is paid or payable by or on behalf of the person to whom credit is or is to be advanced under an agreement or arrangement, related to insuring the risk that is or is to be assumed by the person who advances or is to advance the credit; (frais d'assurance)
- interest
interest means the aggregate of all charges and expenses, whether in the form of a fee, fine, penalty, commission or other similar charge or expense or in any other form, that are paid or payable for the advancing of credit under an agreement or arrangement by or on behalf of the person to whom the credit is or is to be advanced, irrespective of the person to whom any of those charges and expenses are or are to be paid or payable, and of all insurance charges, but does not include any repayment of credit advanced or any official fee, overdraft charge, required deposit balance or, in the case of a mortgage transaction or hypothecary loan, any amount required to be paid on account of property taxes; (intérêt)
2 (1) Paragraph 347.1(2)(a) of the Act is replaced by the following:
(a) the amount of money that is advanced under the agreement is $1,500 or less, the term of the agreement is at least 42 days and not more than 62 days and the payday loan is repayable in instalments;
(2) Subsection 347.1(2) of the Act is amended by striking out "and" at the end of paragraph (b), by adding "and" at the end of paragraph (c) and by adding the following after paragraph (c):
(d) no charges related to insuring the risk that is or is to be assumed by the person who advances or is to advance the money under the agreement are paid or payable by or on behalf of the person to whom the money is or is to be advanced.
Transitional Provisions
Marginal note:Words and expressions
3 The words and expressions used in sections 4 and 5 have the same meaning as in sections 347 and 347.1 of the Criminal Code.
Marginal note:Subsection 347(1) of Criminal Code
4 For the purposes of subsection 347(1) of the Criminal Code, the definitions insurance charge and interest in subsection 347(2) of that Act, as they read on the day on which section 1 comes into force, do not apply in respect of
(a) any agreement or arrangement to receive interest that, on or after that day, is interest at a criminal rate, if the agreement or arrangement was entered into before that day and the interest arising from it would not have been at a criminal rate before that day; or
(b) any receipt of a payment or partial payment of interest that, on or after that day, is interest at a criminal rate, if the payment arising from the agreement or arrangement was entered into before that day and the interest arising from that agreement or arrangement would not have been at a criminal rate before that day.
Marginal note:Paragraphs 347.1(2)(a) and (d) of Criminal Code
5 Paragraphs 347.1(2)(a) and (d) of the Criminal Code, as they read on the day on which section 2 comes into force, do not apply to a person who
(a) before that day, entered into a payday loan agreement to receive interest; or
(b) on or after that day, receives any payment or partial payment of interest arising from such an agreement that was entered into before that day.
Coordinating Amendments
Marginal note:2024, c. 17
6 On the first day on which subsection 336(2) and section 337 of the Budget Implementation Act, 2024, No. 1 and sections 1 and 2 of this Act are in force,
(a) the definitions insurance charge and interest in subsection 347(2) of the Criminal Code are replaced by the following:
- insurance charge
insurance charge means the cost, that is paid or payable or would be paid or payable by or on behalf of the person to whom credit is, is to be or would be advanced under an agreement or arrangement, related to insuring the risk that is, is to be or would be assumed by the person who advances, is to advance or would advance the credit; (frais d'assurance)
- interest
interest means the aggregate of all charges and expenses, whether in the form of a fee, fine, penalty, commission or other similar charge or expense or in any other form, that are paid or payable for the advancing of credit under an agreement or arrangement, or that would be paid or payable if such an agreement or arrangement were entered into, by or on behalf of the person to whom the credit is or is to be advanced, or would be advanced, irrespective of the person to whom any of those charges and expenses are or are to be paid or payable, or would be paid or payable, and of all insurance charges, but does not include any repayment of credit advanced or any official fee, overdraft charge, required deposit balance or, in the case of a mortgage transaction or hypothecary loan, any amount required to be paid on account of property taxes; (intérêt)
(b) paragraph 347.1(2)(a) of the Criminal Code is replaced by the following:
(a) the amount of money that is or would be advanced under the agreement is $1,500 or less, the term of the agreement is or would be at least 42 days and not more than 62 days and the payday loan is or would be repayable in instalments;
(c) paragraph 347.1(2)(d) of the Criminal Code is replaced by the following:
(d) no charges related to insuring the risk that is, is to be or would be assumed by the person who advances, is to advance or would advance the money under the agreement are paid or payable or would be paid or payable by or on behalf of the person to whom the money is, is to be or would be advanced.
Coming into Force
Marginal note:Order in council
7 Sections 1 and 2 come into force on a day to be fixed by order of the Governor in Council.
- Date modified: