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Ontario Proposing Changes to Payday Loans, Debt Collection

News Release

Ontario Proposing Changes to Payday Loans, Debt Collection

Province Introducing Legislation to Strengthen Consumer Financial Protection

Ontario will introduce legislation to increase protections for consumers who use high-cost alternative financial services, such as payday loans, instalment loans, rent-to-own services and cheque-cashing services, and to better protect those with debts in collection.

If passed, the Alternative Financial Services Statute Law Amendment Act would make amendments to the Payday Loans Act, Consumer Protection Act and the Collection and Debt Settlement Services Act that would increase protections for consumers in several important new ways, for example:

  • Consumers cashing cheques at alternative financial service providers would have more information made available to them and would benefit from a cap on the rate of cheque-cashing services 
  • Consumers using rent-to-own services would benefit from a grace period for repayment 
  • Consumers using instalment loans would be certain that the costs of optional insurance would not be excessive 
  • Consumers who are repeat payday loan borrowers would have the option of a longer repayment period 
  • Consumers with overdue debts would benefit from expanded rules against unfair collection practices from businesses that purchase and collect overdue debts. 

Protecting Ontario's consumers is part of the government's plan to build Ontario up. The four-part plan includes investing in people's talents and skills, making the largest investment in public infrastructure in Ontario's history, creating a dynamic, innovative environment where business thrives, and building a secure retirement savings plan.

Quick Facts

  • Alternative financial services are any financial service offered by a party other than a bank or a credit union.
  • There are over 800 licensed payday lenders and loan brokers in Ontario.
  • Ontario’s 2015 survey of 500 payday loan borrowers found that 18 per cent took out 10 or more payday loans in the last year and slightly more than half used payday loans to cover recurring expenses.
  • Approximately 1,000 Ontarians were consulted in the development of this legislation.

Background Information

Additional Resources


David Orazietti

“Our government is committed to protecting consumers, and that includes protecting Ontarians from a cycle of personal debt. Strengthening consumer financial protection ensures our province’s financial marketplace is fair, safe, and keeps consumers well informed.”

David Orazietti

Minister of Government and Consumer Services

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