Ontario is among the largest of the Canadian provinces, and is home to the nation’s capital, Ottawa. In 2010 the population was 13,210,667. At the same time, the province was home to approximately 750 payday loan storefronts out of the roughly 1,350 storefronts operating in all of Canada. That’s around one payday loan storefront per 17,614 people.
Payday loans have been strongly regulated in Ontario since 2009, shortly after the Canadian federal government passed legislation allowing provinces to regulate the industry. Previous to that point, Canadian usury law prohibited loans from exceeding 60% APR, which effectively made all payday loans illegal.
In Ontario, interest is capped at 18% of the principal borrowed, which is the second lowest legislated rate in Canada. Alberta and Manitoba have lower maximum rates, at 15% and 17% respectively. In the event of default, overdue interest can be charged at any rate up to that prescribed by the Criminal Code, which generally means 59% per annum. In addition, lenders can charge a dishonourment fee every time a payment instrument (such as a cheque or EFT authorization) is rejected by the bank. The dishonourment fee has been capped by the government at $50.
Other Laws of Interest
Under the rules of the Canadian Payments Association (the CPA), a direct debit authorization comes in two forms: one-time and repetitive. Payday lenders fall under the one-time category. Under normal circumstances, if one-time authorization is rejected by the bank, it may be represented (that is, reused) one time within 30 days for the exact same amount. The Ontario Payday Loan Act specifically prohibits this in the case of payday loans.
Lenders operating in Ontario include:
For more information, please check with The Ontario Ministry of Consumer Services.
Payday lenders can be found in virtually every city in Ontario, and we will be detailing them in a comprehensive list. See below for what we have so far: