Public Interest Law Centre (PILC)

Consumer Law

Among the Lowest Payday Loan Rates in Canada

The Public Interest Law Centre (PILC) represented a coalition of Winnipeg Harvest, Community Financial Counseling Services and the Consumers’ Association of Canada (Manitoba Branch) at three proceedings before the Manitoba Public Utilities Board (PUB) dealing with payday loans.

At these hearings, PILC argued that the high rates charged by payday lenders left vulnerable consumers at risk of being trapped in a debt cycle.

In its first report, PUB recommended rates for Manitobans that were more than 20 percent lower than any other Canadian jurisdiction in which rates are regulated. PUB rejected a number of requests by the payday lending industry to set rates significantly higher than the current Manitoba rate of $17 for every $100. Following these hearings, the Manitoba government set payday loan rates based on the PUB recommendations. Manitoba continues to have among the lowest payday lending rates in Canada as other provinces come to recognize the value of the Manitoba precedent.

Hundreds of Millions of Dollars Saved for Manitoba Motorists

Following a PILC intervention on behalf of the Consumers’ Association of Canada (Manitoba Branch) and the Manitoba Society of Seniors in 2000, PUB ordered a reduction in the Manitoba Public Insurance Corporation (MPIC) reserve fund.

As a result, an $80-million dividend was paid to consumers. In 2006, 2007 and 2008, consumers received dividends of $58-million, $60-million and $63-million.

In 2011, PUB ordered MPIC to rebate $336-million to consumers. On average, each policy holder received a rebate of over $500. When MPIC sought to restrict the rebate to $70-million, PILC successfully argued that the entire amount should be rebated. Overall, between 2001 and 2016, PUB ordered the rebate of nearly $600-million to Manitoba consumers.

Reduced Rates for Government Cheque Cashers

Low-income Manitobans who do not have access to a bank account pay a high price to cash their government cheques at private-sector outlets.

In 2007, on behalf of the Consumers’ Association of Canada (Manitoba Branch), PILC took part in the first proceeding in Canada to set rates for government cheque cashers.

PUB adopted rates which were materially lower than the industry average and recommended that rates should be set based on the criteria of an efficient payday lender rather than the more generous standard the industry proposed.