As COVID-19-related layoffs affect workers across the country, Canada’s payday loan companies will see windfall profits at the expense of low- and moderate-income people. This new report details how a lack of government oversight allows payday lenders to prey on the most economically vulnerable households in Canada. The report details the provincial variance in annual interest rates on these quick loans, with rates as high as 391% and 652% in some provinces.
In 2016, the federal Survey of Financial Security estimated that 520,000 Canadian households (3.4 per cent of the total) had at least one family member who had used a payday loan in the past three years. Other key findings include:
- Tenant households were four times more likely than home-owning households to use payday loans.
- Single-parent households were almost four times more likely than two-parent households to use payday loans.
- Single-parent tenant households were six times more likely than the average household to use a payday loan (one in five had used them).
- Female-led single-parent households borrowed from payday lenders more often than male-led households did.