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Saturday March 6, 2021

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Saturday March 6, 2021

Payday lender lines of credit and instalment loans at 47% create debt traps, critics say

Patricia Edwards of Toronto wanted to help her two adult daughters when they fell behind on bill payments at the rented townhouse they share.  

October 18, 2006

She has few assets and a poor credit history, but she was employed at the time, so she went to a payday lender — not for a payday loan, but for an ongoing line of credit. 

“I was like, OK, let’s see if I qualify for the loan because I’m working.”

Edwards, 53, was able to borrow $1,500 early in 2019 from Cash Money. But then she lost her job, and in 2020 came the pandemic. She’s had to refinance the loan twice, and went to another lender, Money Mart, for an instalment loan that could be repaid over two years.

Now she’s close to $5,000 in debt, all in, paying nearly 47 per cent interest on both loans.

December 6, 2014

Her predicament, and that of many other Canadians like her, has a chorus of voices calling for industry reform. Activist groups, elected officials and even some smaller lending companies say financially vulnerable people are too often lured by payday lenders’ low bi-monthly payments on longer-term loans without realizing how the costs will add up.

“I’d love to get a bank loan,” said Edwards. “But I don’t have a car, I don’t have a home, I don’t have any assets. I don’t qualify.”

Payday lenders argue that’s exactly why their services are essential. They provide money to people in need who otherwise would be unable to borrow. 

December 11, 2015

In a statement to CBC News, the Canadian Consumer Finance Association, which represents close to 1,000 high-interest lenders across the country, said unsecured loans are expensive to provide, and that its members’ interest rates are government-approved. 

Acorn Canada, a national organization that advocates for low-income people, has taken aim at large payday lenders, organizing protests across the country and calling on the federal government to take action.

Donna Borden, vice-chair of Acorn’s East York chapter in Toronto, said the pandemic has forced more Canadians to turn to high-interest lenders.  

September 11, 2015

“A lot of people are using or taking these loans to buy food, to pay their rent,” she said. “And especially now with COVID, it’s even worse.” 

Instalment loans, where regular repayments are scheduled over a number of years, were the fastest growing segment of lending among payday companies, according to the results of a limited online survey conducted by Acorn in February. It found that the number of survey respondents who reported taking instalment loans had jumped from 11 per cent in 2016 to 45 per cent in 2020. 

Independent Sen. Pierrette Ringuette of New Brunswick has sponsored two bills to have the Criminal Code amended to lower the maximum interest rate that lenders can legally charge from 60 to 20 per cent plus the overnight bank rate. Neither bill moved forward due to prorogations and election calls, but Ringuette said she intends to sponsor another one.   

“Canada is like a gold mine to these institutions because of the current state of legislation we have in place,” she said. (CBC) 

 

Wednesday July 12, 2017

Editorial Cartoon by Graeme MacKay, The Hamilton Spectator – Wednesday July 12, 2017

Bank of Canada may hike interest rate for 1st time in 7 years

After almost a decade of warnings that never came to pass, it appears as though the Bank of Canada is ramping up to hike its benchmark interest rate — possibly as soon as next week.

July 16, 2015

On July 12, Canada’s central bank will announce its latest decision on where to place its trend-setting interest rate, which has an impact on the rates that Canadian borrowers and savers get for their bank accounts, mortgages and other products.

Eight times a year, the bank’s board of governors meets to assess the latest economic indicators and decide whether Canada’s economy needs a shot in the arm from a rate cut, or a pump of the brakes by way of a hike.

And for the first time in 54 such meetings, it’s looking like the latter is in order.

It’s not like there haven’t been warning signs. By the time Stephen Poloz was named to replace Mark Carney atop the bank in 2013, the central bank had already been on the sidelines for more than two years, its benchmark interest rate set at one per cent.

May 13, 2010

But even as the bank kept loans cheap coming out of the financial crisis, the messaging from the top came early and often that Canadians should be forewarned — rates have to go up eventually.

As far back as 2014 Poloz warned Canadians that rates would rise “soon” — before oil’s plunge in 2015 caused the bank to lose its nerve. Instead, the central bank moved in the opposite direction, cutting rates twice that year to bring its rate to 0.5 per cent, where it currently sits.

At the time, those hikes were described as a temporary measure to help a Canadian economy that had been waylaid by an oil price that lost more than 70 per cent of its value in a matter of months. But in recent weeks the bank has started leaving clear signals that despite oil still being in the $40-per-barrel range, those temporary conditions are over and it’s time for a return to normalcy. (Source: CBC News) 

 

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Friday December 11, 2015

Friday December 11, 2015 Payday loan industry comes under microscope The province is moving to protect vulnerable people from cash stores and collections agencies Ñ but a local councillor calls the efforts "half-hearted." If passed, new legislation by the Ontario government promises to increase protections under the Payday Loans Act, Consumer Protection Act and the Collection and Debt Settlement Services Act. The aim is to provide safeguards such as a cap on the rates charged by cheque-cashing services, a grace period for repayment for customers of rent-to-own services and reasonable costs for optional insurance on instalment loans. It would also offer longer repayment periods for repeat payday loan borrowers, and expanded rules against unfair collection practices from businesses that purchase and collect overdue debts. But Ward 3 Coun. Matthew Green says the legislation "doesn't go nearly far enough in terms of really tackling the core elements and the predatory nature of this industry." There are 813 licensed payday lenders in Ontario Ñ more than there are McDonalds restaurants. Roughly 35 of those are in Hamilton, according to the ministry's online database. For starters, Green wants to see the "ridiculous" interest rates on payday loans slashed. Green put forward a motion this summer to limit and regulate these stores at a municipal level, which would have made Hamilton the first city in the province to do so. Staff is now looking into the feasibility of that. In the meantime, he and a working group made up of local agencies, including credit unions, are actively researching a model for a market alternative low-cost loan service. Tom Cooper, director of Hamilton's Roundtable for Poverty Reduction (HRPR), says he'd like to see provincial legislation that enables municipalities to license lenders at the local level. He agrees there's more work to do on this. "At the end of the day É these services are predatory by nature and they'll continue to take a

By Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator – Friday December 11, 2015

Payday loan industry comes under microscope

The province is moving to protect vulnerable people from cash stores and collections agencies — but a local councillor calls the efforts “half-hearted.”

Saturday, December 6, 2014If passed, new legislation by the Ontario government promises to increase protections under the Payday Loans Act, Consumer Protection Act and the Collection and Debt Settlement Services Act. The aim is to provide safeguards such as a cap on the rates charged by cheque-cashing services, a grace period for repayment for customers of rent-to-own services and reasonable costs for optional insurance on instalment loans.

It would also offer longer repayment periods for repeat payday loan borrowers, and expanded rules against unfair collection practices from businesses that purchase and collect overdue debts.

By Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator - Friday September 11, 2015 Hamilton looks to crack down on payday loan industry Hamilton councillors unanimously approved a motion seeking from the province the ability to limit the locations of payday loan and cheque cashing outlets, while also strengthening the Payday Loans Act. ÒThis is predatory economic violence,Ó said Ward 3 councillor Matthew Green, who introduced the motion at councilÕs Sept. 9 meeting. Ò(They) are targeting our most vulnerable, indebted people. ItÕs legalized loan sharking.Ó GreenÕs motion targeting the industry, which was revealed earlier this summer, includes forcing these businesses to post their rates on their walls, provide information about debt counselling, and having Hamilton staff identify all the payday loan businesses in the city. Also contained in the motion was a request to the province to toughen the Payday Loans Act. The act regulates the industry allowing outlets to charge $21 for every $100 people borrow. Green says desperate people use these businesses, and they end up having to go to another payday loans outlet to pay the loan of the first one. ÒThis is usury, this is criminal,Ó said Green. ÒIÕd love to see (the places) outlawed.Ó Tom Cooper, director of the Hamilton Roundtable for Poverty Reduction, says municipalities need the power to regulate a business that is taking advantage of vulnerable people. ÒWe deem the industry as predatory in nature because its practices and slick marketing campaigns lure vulnerable consumers into transactions where there is nowhere else to turn in a financial crisis,Ó said Cooper. Based on the payday industryÕs own information, for every new customer loan, 15 are repeats, said Cooper. Stan Keyes, president of the Canadian Payday Loan Association, headquartered in Hamilton, stated in an email letter sent to councillors Sept. 8 that Òcouncil should not pass bylaws to ban industries providing services that consumers d

But Ward 3 Coun. Matthew Green says the legislation “doesn’t go nearly far enough in terms of really tackling the core elements and the predatory nature of this industry.”

There are 813 licensed payday lenders in Ontario — more than there are McDonalds restaurants. Roughly 35 of those are in Hamilton, according to the ministry’s online database.

For starters, Green wants to see the “ridiculous” interest rates on payday loans slashed.

Green put forward a motion this summer to limit and regulate these stores at a municipal level, which would have made Hamilton the first city in the province to do so.

Friday July 26, 2013Staff is now looking into the feasibility of that.

In the meantime, he and a working group made up of local agencies, including credit unions, are actively researching a model for a market alternative low-cost loan service.

Tom Cooper, director of Hamilton’s Roundtable for Poverty Reduction (HRPR), says he’d like to see provincial legislation that enables municipalities to license lenders at the local level.

He agrees there’s more work to do on this.

“At the end of the day … these services are predatory by nature and they’ll continue to take advantage of people who run into desperate financial situations,” he says.

According to a survey of 500 Ontario payday loan users earlier this year, more than half of the borrowers surveyed said they are using the service for recurring expenses, not crisis situations.

Of those surveyed, 27 per cent reported making less than $30,000 a year. (Source: Hamilton Spectator)

Wednesday December 2, 2015

By Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator - Wednesday December 3, 2015 Trudeau children's nannies being paid for by taxpayers Canadian taxpayers are paying the wages of two nannies hired to care for the children of Prime Minister Justin Trudeau and his wife, Sophie GrŽgoire-Trudeau, according to cabinet orders posted online. The hirings were approved late last week, with cabinet authorizing the appointment of the two women under the Official Residences Act as "special assistants at the prime minister's residence." They will be paid between $15 and $20 an hour during the day and $11 to $13 an hour for night shifts effective Nov. 4 Ñ the day Trudeau and his cabinet were sworn in. The disclosure comes after an election campaign where Trudeau repeatedly attacked the Conservatives' enhanced universal child care benefit, or UCCB, and income splitting for families, arguing rich families like his and former prime minister Stephen Harper's didn't need taxpayers' help. "In these times, Mr. Harper's top priority is to give wealthy families like his and mine $2,000," Trudeau said in reference to the Conservatives' income-splitting tax credit. "Let me tell you something: We don't need it. And Canada can't afford it." Trudeau is also entitled to collect annual UCCB payments of about $3,400 for his three children. He promised to give the money to charity. One of the women hired was with the Trudeaus this past week on the prime minister's foreign trip that wrapped up Monday at the UN climate change conference in Paris. She posted photos online of the couple's two children who came on the trip. There were also shots of her with the Trudeaus' youngest child on Facebook visiting museums and at the hotel where they stayed in Paris. The prime minister's director of communications, Kate Purchase, said in an email that the two women who have been hired are doing more than childcare. "Like all families of prime ministers, a small number of staff provide assi

By Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator – Wednesday December 2, 2015

Trudeau children’s nannies being paid for by taxpayers

Canadian taxpayers are paying the wages of two nannies hired to care for the children of Prime Minister Justin Trudeau and his wife, Sophie Grégoire-Trudeau, according to cabinet orders posted online.

Editorial Cartoon by Graeme MacKay, Editorial Cartoonist, The Hamilton Spectator - Friday January 12, 2007 Is Justin Trudeau set to run as MP? Justin Trudeau is about to enter federal politicsÑwell, according to everyone but him, that is. While the 35-year-old school teacher and academic is remaining coy about his intentions, a report published in MontrŽalÕs French-language daily La Presse on Tue, Jan 9, claims that the eldest son of former Prime Minister Pierre Elliot Trudeau is planning on running as a Liberal candidate in the next federal election in Outremont, a riding located in the centre of the Island of MontrŽal that is home to wealthy Francophone families and a sizeable Jewish community. Outremont is considered to be an extremely ÒsafeÓ riding for the partyÑsince its creation in 1933, the Liberals have failed to win the seat only once, in 1988Ñand the areaÕs current MP, former Transport Minister Jean Lapierre, has indicated that he does not plan to run in the next election. Despite his denials and deflections (ÒI have no comment to make at this time,Ó Trudeau wrote in an email to the MontrŽal Gazette), the increasing likelihood of TrudeauÕs entrance into the House of Commons has set political pundits and journalists abuzz. A recent article in MacleanÕs magazine headlined ÒHis SecretÕs OutÓ claims that Trudeau hinted in an interview that he would make an announcement regarding his future in politics sometime after Christmas, while a close friend of the supposed star candidate reportedly told the magazine ÒOff the record, I think heÕs pretty much there.Ó (Source: Vue) editorial cartoon, 2007, Justin Trudeau, Pierre Trudeau, Colm Feore, politics, Outremont, trudeau

Friday January 12, 2007

The hirings were approved late last week, with cabinet authorizing the appointment of the two women under the Official Residences Act as “special assistants at the prime minister’s residence.”

They will be paid between $15 and $20 an hour during the day and $11 to $13 an hour for night shifts effective Nov. 4 — the day Trudeau and his cabinet were sworn in.

The disclosure comes after an election campaign where Trudeau repeatedly attacked the Conservatives’ enhanced universal child care benefit, or UCCB, and income splitting for families, arguing rich families like his and former prime minister Stephen Harper’s didn’t need taxpayers’ help.

“In these times, Mr. Harper’s top priority is to give wealthy families like his and mine $2,000,” Trudeau said in reference to the Conservatives’ income-splitting tax credit. “Let me tell you something: We don’t need it. And Canada can’t afford it.”

Trudeau is also entitled to collect annual UCCB payments of about $3,400 for his three children.

He promised to give the money to charity.

April 25, 2012

One of the women hired was with the Trudeaus this past week on the prime minister’s foreign trip that wrapped up Monday at the UN climate change conference in Paris. She posted photos online of the couple’s two children who came on the trip.

There were also shots of her with the Trudeaus’ youngest child on Facebook visiting museums and at the hotel where they stayed in Paris.

The prime minister’s director of communications, Kate Purchase, said in an email that the two women who have been hired are doing more than childcare.

“Like all families of prime ministers, a small number of staff provide assistance. Given the nature of the prime minister’s responsibilities and his young family, the Trudeaus employ two household employees who, in addition to performing other duties around the house, act as secondary caregivers to the three children,” Purchase said. (Source: CBC News)

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Regina Leader-Post, December 3, 2015

Regina Leader-Post, December 3, 2015

Friday April 27, 2012

By Graeme MacKay, The Hamilton Spectator, Friday April 27, 2012

Moody’s debt-rating downgrade sour news for Ontario

A community group pushing the city to take another look at its ward boundaries has successfully collected the 500 Just two days after the McGuinty Liberals’ first minority government budget passed a crucial vote, one of the world’s major credit rating agencies downgraded Ontario, citing the province’s swollen debt burden and tough economic times ahead.

Moody’s Investors Service’s decision Thursday to downgrade Ontario followed a stern warning and dimmer outlook issued one day earlier from Standard & Poor, another influential credit rating agency.

Finance Minister Dwight Duncan acknowledged that the move by Moody’s was serious but he also attempted to play down the sour financial news. Moody’s downgrade could make Ontario’s government bonds less attractive to investors and could also make it more expensive to borrow money at a time when the province’s debt is mounting.

Progressive Conservative finance critic Peter Shurman suggested the rating drop was “catastrophic for Ontario,” but Mr. Duncan said he expects the effect will be minimal.

“We’re still in the top echelons of credit ratings,” Mr. Duncan noted. “It [the downgrade] reminds us that it’s important that we continue to meet our targets or we risk paying more money to bond holders instead of for schools and for health care.”

Moody’s downgrade of the province’s debt rating to Aa2 with a stable outlook from Aa1 with a negative outlook brings the agency’s score more in line with S&P and DBRS, which both downgraded Ontario by one notch in the fall of 2009. DBRS, which also weighed in Thursday on Ontario’s fiscal state, decided to maintain its “stable” outlook on its debt rating for Canada’s largest province, saying the government’s increased focus on controlling spending was “an encouraging step in the right direction.” (Source: Globe & Mail)