Hon. Pierrette Ringuette: Honourable senators, I rise today to inform you that Phillipe Bélanger, a young Senate employee, passed away on March 2. He was just 40 years old. Phillipe drove our shuttle buses and always greeted us with a beautiful smile.

A native of Edmundston, Phillipe lived life to the fullest through his love of and appreciation for nature. He loved climbing, hiking in the woods, downhill skiing, snowboarding and other outdoor activities.

A snowboarding accident when he was younger nearly cost him his life, but thanks to the exceptional dedication of his father Bertrand, a physiotherapist, and his mother Lise, a nurse, Phillipe recovered, and he was more determined than ever to make every second of his life count.

In June 2019, Phillipe informed us that he had been diagnosed with Lou Gehrig’s disease. It was sad news, but Phillipe was determined to beat this disease, and he diligently participated in clinical trials in Montreal. He remained positive up until a few months ago. During that time, Phillipe travelled with me from Gatineau to Edmundston several times to visit his parents and friends. The trip was definitely hard on him, but he shared his deepest thoughts with me, always with a smile. I so enjoyed those times and especially his company.

He enjoyed those visits, but he always looked forward to returning to his little daughters and his wife, Martine, his treasures.

Phillipe left us far too soon, but his memory shall remain with us always. As the song by Angèle Arsenault goes, there is a star for you, there is a star for each and every one of us. Thanks to his parents’ devotion, there is indeed a star for Phillipe, a star that will always shine brightly for us.

Honourable senators, please join me and Senator Mockler in extending our sincere condolences to his wife Martine, his two young daughters, Marguerite and Clémence, his parents, Bertrand and Lise Bélanger, and his sisters, Josette and Martine.

This is a sad occasion. Thank you.

Hon. Pierrette Ringuette moved second reading of Bill S-239, An Act to amend the Criminal Code (criminal interest rate).

She said: Honourable senators, I would like to acknowledge that we are gathered on the unceded territory of the Algonquin Anishinaabe people.

I am happy to finally introduce my bill to lower the criminal interest rate. I have spoken on this topic many times before. I am optimistic from the support I have received in the chamber, but alas, the bill has not passed.

The first time, the bill made it to committee, but then there was an election. The second time, it made it through committee, with amendment, but then another election. I also tabled it in the spring of last year, but, of course, there was another election. So let’s see if we can do it this time before another election.

Let us talk about the bill. The bill will revise section 347 of the Criminal Code that currently sets the criminal interest rate at 60%.

This legislation will set the following interest rate limit at 20% above the Bank of Canada rate, which is currently 0.5%. It would be a 20.5% maximum interest rate; after that it would be a criminal interest rate.

I have tied it to the Bank of Canada rate so that the limit will move with general interest rates and remain relevant to current markets as they change over time.

The criminal interest rate was first put into place in 1981. At that time, 40 years ago, the bank rate was at 21%. Now the rate is at 0.5%. Why should the Bank of Canada rate fall so low while interest rates paid by Canadians remain so high? It does not have to be that way.

This new rate limit of 20% over the Bank of Canada rate will leave almost all normal financial transactions alone. It is above the vast majority of credit cards, mortgage rates and standard loans. Since the bank rate will not likely go lower, and in fact will likely rise soon, there is no danger of this new limit falling below those standard rates. Almost every major bank credit card is 19.99% or less. However, it would affect the excessive outliers, such as late charges from phone and cable companies — look at your monthly statements — instalment loans, high‑interest credit cards, et cetera.

Many instalment loans, lines of credit, et cetera, that are being offered by some companies are also heavily involved in payday loans.

Fairstone advertises instalment loans at 26.99% to 39.99%; easyfinancial advertises unsecured instalment loan rates starting at 29.99%; Money Mart advertises at 29.90% to 46.90%; Loans Canada ranges from 2.99% to 46.96%; and Capital Cash loans are at 59%.

You wonder where that number comes from?

There are also some store-branded credit cards that have high rates. For example, The Home Depot card is 28.8%, as are other store cards.

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These loans often target the financially vulnerable. They are even advertised not as last-resort loans, but as easy cash, and there is no mention of whether or not people can make the payments. Even the companies’ names focus on that aspect, as in the case of easyfinancial. These companies say that no credit check is required, that it’s easy money and so forth. They downplay the costs while giving the impression that they grant loans out of the goodness of their hearts.

Late fees would also be covered by this bill. For example, companies such as Rogers and Bell charge 42.58% interest for late fees. After 31 days, Alberta Utilities Commission charges an interest rate of 30% plus the prime business interest rate taken from the Bank of Canada website.

Most financial instruments would not be affected, but we can target those that I, like many of you, would consider to be excessive.

The purpose of this bill is not to criminalize legitimate financial activity, but section 347 of the Criminal Code is where the maximum interest rate is set and is therefore the most productive place to lower interest rates. Section 347 is currently used in civil contract disputes; it is not used as a criminal matter. This amendment would force down the interest rate, not cause arrests.

[English]

I will quickly address the issue of payday loans, which is quite different.

This legislation does not hit standard payday loans, although I do see them as a problem as well. Payday loans were carved out of section 347 in 2006. This placed regulation of small short-term loans — that is, loans under $1,500, no longer than 62 days — into the control of the provinces.

So they do not have to offer loans under this limit, recognizing that short-term loans require a higher fee in relation to an annualized interest rate.

Colleagues, the provinces vary in how they regulate. Generally, it is around $15 per $100 borrowed for up to $1,500 for a two-week period. Annually, that is an interest rate of 391%. In Quebec, they just won’t license any loan lender that charges more than 35%, effectively banning payday loans. They are the only province that does that in this entire country.

Honourable senators, we also made a mistake in 2006, when we agreed to the provinces regulating the payday loan industry. It was a mistake that Parliament made. It was a mistake the Senate made in agreeing to that part. I do wish that we will find a way to rescind that decision.

Payday loan companies have been busy and have expanded into loans that would fall under section 347 in regard to longer terms and larger amounts of money. Currently, they should be covered under the criminal interest rate, but there is a major lack of enforcement. My goal is for this bill to send a strong signal that we will not tolerate these excessive rates. Enough is enough.

In the last few weeks, colleagues have risen in this place to talk about how difficult it is for families with the inflation rate. The inflation rate has not yet gone down. How do you think that a normal family — some making a minimum wage that has not increased — can make ends meet, buy groceries, put gas in their car to go to work and buy medication for their kids? We rise this in this place and we say it’s awful; inflation is awful for what it’s doing to our most vulnerable. I do hope you understand that this bill is not aimed at any of us. This bill is aimed at those who are in dire need. Unfortunately, banking institutions do not necessarily have open arms to help them along when they are in need. But we have other institutions, like easyfinancial, which more than welcome them.

Some may say this will affect access to loans for many vulnerable people, but it isn’t a good thing for the vulnerable to have access to loans that they cannot pay back with these extreme rates and fees. I grant that this is a concern, so I will note that there are options, such as current low-cost borrowers, like Borrowell, with an average APR around 11% to 12%, not 59%, and home equity loans with rates around 10%. You have to ask yourself this question: If this business entity makes a profit with that amount of interest charged, how can we accept other entities coming to the Senate Banking Committee and saying that if they cannot charge 49%, they will have to close up shop? How can we accept that?

There are also secure credit options for building credit scores. Recently, Canada Post and TD Bank joined forces in a pilot project to offer Canadians in rural and unbanked areas small dollar loans through the post office at competitive rates, between 6.33% and 16.03%. This will provide Canadians across the country accessible, reasonably priced loans. The market test from the pilot project included over 200 post offices in select locations and aimed to gauge demand and impact on underserved communities. Canada Post has informed me that the pilot has been very successful at providing accessibility to key customer segments, with approximately 80% of those who received loans having no credit or credit scores below the national average. With the pilot recently completed, I am very excited to see how this progresses. I strongly encourage Canada Post and TD in making this a nationwide program. For the first time in more than 19 years in the Senate, I will thank and congratulate a bank. They earned it. Thank you, TD, for initiating this pilot project with Canada Post.

While many argue that high rates are the cost of accessibility, there are clearly companies that are able to operate with these lower rates. Also, I do not believe that the answer to this concern is to just throw our arms up and say that the financially vulnerable must pay extremely high rates because they are risky. We should be concerned and look at the issue of loan access for our most vulnerable. A previous version of the bill had been amended with a higher rate, and I disagreed with that rate. While I hope to have a fruitful discussion around the specific rate as we proceed, I will support 20%. The 20% covers the vast majority of existing options from mortgages, credit cards, lines of credit, government rates, et cetera. It particularly allows for the most common of these credit cards to continue unaltered, with a standard rate of 19.99%, so 20% plus the bank rate adjustment hits the right spot. I could also be persuaded to get it lower. That’s up to all of you.

These companies are all able to operate with rates at and well below this new limit, and in fact these rates have changed very little in light of the plunge in the bank rate over the last 10 years. Consumer debt is a growing problem in Canada, and the pandemic has made it even worse for too many Canadians. According to MNP, 6 in 10 Canadians are at least somewhat likely to borrow more before the end of this year; and 3 in 10 say the pandemic worsened their credit, their debt, or increased the debt burden on either themselves or their family. The number of Canadians who report being insolvent sits at its highest level since 2017, at 30%. Overall, consumer debt now stands at $2.08 trillion, which is up 0.62% from last quarter and up 4.78% from the first quarter of 2020.

Over the course of the pandemic, the Canadian government has borrowed at historically low rates, while Canadians themselves have continued to amass debt under what are extremely punishing interest rates for too many. The government has been using these funds to help Canadians, but this measure will help Canadians help themselves, and it does not cost the government a penny to do it — not one penny to help Canadians.

People do not take on debt lightly. They are often forced to through matters out of their control, be it an unforeseen medical expense, the loss of a job, a car breaking down or, perhaps, a global pandemic. This is a matter of fairness. It will help the most marginalized. It will help them not by paying off their debts but by giving them the opportunity to do it themselves. This is a hand up, not a handout.

I look forward to a lively debate, and mostly, I look forward to your support. Thank you.

(On motion of Senator Duncan, debate adjourned.)

On the Order:

Resuming debate on the motion of the Honourable Senator Kutcher, seconded by the Honourable Senator Boehm:

That the Standing Senate Committee on Social Affairs, Science and Technology be authorized, when and if it is formed, to examine and report on the Federal Framework for Suicide Prevention, including, but not limited to:

(a)evaluating the effectiveness of the Framework in significantly, substantially and sustainably decreasing rates of suicide since it was enacted;

(b)examining the rates of suicide in Canada as a whole and in unique populations, such as Indigenous, racialized and youth communities;

(c)reporting on the amount of federal funding provided to all suicide prevention programs or initiatives for the period 2000-2020 and determining what evidence-based criteria for suicide prevention was used in each selection;

(d)determining for each of the programs or interventions funded in paragraph (c), whether there was a demonstrated significant, substantive and sustained decrease in suicide rates in the population(s) targeted; and

(e)providing recommendations to ensure that Canada’s Federal Framework for Suicide Prevention and federal funding for suicide prevention activities are based on best available evidence of impact on suicide rate reduction; and

That the committee submit its final report on this study to the Senate no later than December 16, 2022.