Senator Ringuette: The battle is not over.

I introduced my bill several times, but each time it died on the Order Paper when an election was called or Parliament was prorogued. I introduced it again in this Parliament. It is entitled Bill S-239, An Act to amend the Criminal Code (criminal interest rate), and it is currently at second reading.

When I saw Bill C-47, I thought that maybe I should withdraw my bill. However, after giving it some thought, I decided that I wouldn’t take any chances. I will leave it until it is a done deal, from beginning to end.

Whereas Bill C-47 sets the limit at 35%, my bill would tie the criminal interest rate to the Bank of Canada’s overnight rate plus 20%.

In Quebec, the interest rate limit is currently 35%, the lowest rate in Canada. That rate is similar to what is currently set out in Bill C-47.

I tied my rate to the overnight rate so that it could be adjusted based on the evolving economic situation. The past year has shown how relevant this proposal is, because the rate went from 0.25% in January 2022 to 4.75% last week. Let’s not forget that more hikes could be coming.

The rate proposed in my bill would therefore be 24.75% as of today, about 10 points lower than the rate in Bill C-47.

Based on what I heard from many Canadians and what I’ve learned from my own research over the years, instalment loans are being granted at unreasonable, even abusive, rates that can be as high as 39%, 45% and even 59.9%, just within the 60% limit. I have seen public services charge late fees of 42%.

One area where I wanted to see lower rates was credit card interest rates, but this rate will not affect that.

Most credit cards have interest rates below 20%, but there are some, especially store cards like Home Depot, whose interest rates are around 30%. I think these rates are too high, and I would like to see them come down, but my bill targets the very high rates charged by instalment loan providers and public services, such as Bell and Telus, as anyone who checks their bill can see.

I should also point out that the government has made progress in another area I’m concerned about, namely interchange fees. There have been bills about this. Processing fees in Canada are among the highest in the world. They drive prices up, and we all pay for that. The government recently announced agreements with Visa and Mastercard to reduce these fees to, on average, 0.95%, which is a considerable improvement over a few years ago, when the rates were at 3%.

This limit is not as low as that imposed elsewhere, for example in the European Union, which set a limit of 0.3% on transaction fees more than 10 years ago.

I therefore thank the government for continuing to keep its budgetary promises in this regard.

I would also like to point out that the budget indicates — and the Minister of Finance also said it — that there would be new consultations to determine whether the interest rate should be lowered further. I am very pleased about this, because I believe that the rate should be lower than 35% and perhaps equal to the overnight rate plus 20%. Imagine that.

I will be closely following these consultations, and I will continue to apply pressure to ensure the rate is lowered.

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Consumer debt is a serious and growing problem in Canada. This problem is of particular concern with respect to inflation and the rising cost of living. According to TransUnion, consumer debt from all sources has increased by 5.6% year over year to a new high of $2.32 trillion. That’s the debt load that Canadians have.

Instalment loans are down 5.76%, but Canadians still hold an average of $20,846 in debt — and these are often at the highest rates of interest. It is worrying that debt continues to climb, and measures like this — to help Canadians deal with their debt load — will not do a lot to improve or perhaps reverse this trend.

This bill also addresses a related issue that I have been watching closely: In 2006, Parliament made a major mistake. We carved out a section of the Criminal Code as long as the provinces would make the regulation. Here is the regulation that they made: The criminal interest rate was amended to exclude short-term loans under $1,500, otherwise known as payday loans. I believe that this was a mistake, and this budget has taken steps to recognize this error. The bill grants the Governor-in-Council the power to set rates by regulations for these loans.

The current rates in the provinces are as high as $17 per $100; you might think that $17 per $100 isn’t that much. As stated in the budget, the government aims to set the limit at $14, in line with the lowest rate which is in Newfoundland right now. Colleagues, $14 in interest for every $100 in loans for a two-week period is an annualized rate of 365% in Newfoundland. With the exception of Quebec, all of the other provinces’ and territories’ rate is 395%. And then we ask the following: Why are Canadians in so much debt? This is highway robbery. I’m going to hold the government to account to ensure they keep their word, do the proper consultations, take that out of the provinces’ hands and bring it back under the Criminal Code, as it should have been.

I would say that the whole section, excluding payday loans, should be removed; I support this action being taken. I hope that future consultations lead the government to remove this, carve it out entirely from the Criminal Code and bring these loans under the same limit as the current 35% — hopefully it’s 20% in the future.

After years of pushing this issue, listening to Canadians and talking to stakeholders and government officials, it brings me joy — I am honest — to see that there’s finally hope, as well as some action being taken with the promise of further action in the fall to lower these rates. This will be a great benefit to the most financially vulnerable, who often find themselves in this position through no fault of their own. And these measures cost zero dollars for the federal government.

I continue to believe that an even lower rate is a reasonable goal, but I do appreciate the government taking this action in the budget. It is long overdue, and it will help Canadians in these uncertain economic times.

I support this action by the government, and, even though it is not what I would have preferred, it is a step in the right direction. That being said, I urge the government to keep an eye on this and be open to considering further changes, as this is an issue that affects the well-being of all Canadians, which also affects us all. Thank you, once again, for listening to my speech on criminal interest rates.

The Hon. the Speaker pro tempore: Is it your pleasure, honourable senators, to adopt the motion?

The Hon. the Speaker pro tempore: Are senators ready for the question?

The Hon. the Speaker pro tempore: Honourable senators, leave is not granted. Therefore, the sitting is suspended, and I will leave the chair until 8 p.m.

(The sitting of the Senate was suspended.)

(The sitting of the Senate was resumed.)

On the Order:

Resuming debate on the motion of the Honourable Senator Loffreda, seconded by the Honourable Senator Gold, P.C., for the third reading of Bill C-47, An Act to implement certain provisions of the budget tabled in Parliament on March 28, 2023.

The Hon. the Speaker pro tempore: I am sorry, Senator Pate, but you will have 11 minutes upon our return.

Honourable senators, it is now six o’clock. Pursuant to rule 3-3(1), I am obliged to leave the chair until eight o’clock, unless it is your wish, honourable senators, not to see the clock.

Is it agreed not to see the clock?

Hon. Pierrette Ringuette: Honourable senators, I rise today to speak to a specific section of Bill C-47, the budget implementation bill.

In this bill, division 34 of part 4 amends section 347 of the Criminal Code in order to lower to 35% the criminal rate of interest, in accordance with generally accepted actuarial practices and principles.

As many of you know, this is an issue I have been endeavouring to fix for a very long time, nearly 10 years.