Payday law · Ontario
Payday Loan Laws in Ontario
Ontario is a designated province. Operating as a payday lender or loan broker requires a licence under the Payday Loans Act, 2008, and the cost of borrowing is capped.
Payday lending in Ontario: permitted, licensed
Educational information, not legal advice
We are not lawyers and hold no legal accreditation of any kind. Everything below is our own reading and interpretation of publicly available laws, offered purely for education. It is not legal advice and may be incomplete or out of date. Laws change and exceptions apply. Confirm anything that matters with the cited official source or a qualified legal professional before relying on it.
Ontario is a designated province. Operating as a payday lender or loan broker requires a licence under the Payday Loans Act, 2008, and the cost of borrowing is capped.
Designated province
Ontario is designated under Criminal Code s. 347.1, so licensed payday lenders may operate. The governing Act is the Payday Loans Act, 2008, overseen by Consumer Protection Ontario. The maximum cost of borrowing is $14 per $100 borrowed.
The national rules that apply here
Every jurisdiction starts from the same federal baseline. The Criminal Code caps interest at an effective 35% per year[4], and section 347.1 carves out payday loans only where the province is designated and the lender is licensed[3].
“The Governor in Council shall, by order and at the request of the lieutenant governor in council of a province, designate the province for the purposes of this section if the province has legislative measures that protect recipients of payday loans and that provide for limits on the total cost of borrowing under the agreements.”[6]— Criminal Code, s. 347.1(3) — designation of province
Ontario's carve-outs and exemptions
Beneath the national baseline, Ontario sets its own specifics through the Payday Loans Act, 2008, administered by Consumer Protection Ontario[1]. The points below are where the province departs from, or gives effect to, the federal framework:
- Since January 1, 2025 the federal limit of $14 per $100 governs the maximum cost of borrowing, replacing Ontario's earlier $15 per $100 figure.
- A lender or broker must hold an Ontario licence — an unlicensed storefront cannot legally make payday loans here.
Our reading: because the federal cost limit of $14 per $100[2] now sits at or below the older provincial figures, it is the effective cap in Ontario today. A licensed lender pricing within that limit, on a loan of $1,500 or less for 62 days or less, fits inside the carve-out[3].
What this means for businesses listed here
A business may be classified as a payday lender in Ontario when its location and offering are consistent with licensed payday lending under the Payday Loans Act, 2008. We expect operators to hold the required provincial licence; where that is unclear we flag the listing for review.
References
- Payday Loans Act, 2008, S.O. 2008, c. 9. Government of Ontario (e-Laws). https://www.ontario.ca/laws/statute/08p09 (retrieved 2026-08-24).
- Criminal Interest Rate Regulations, SOR/2024-114. Justice Laws Website, Government of Canada. https://laws-lois.justice.gc.ca/eng/regulations/SOR-2024-114/FullText.html (retrieved 2026-08-24).“For the purposes of paragraph 347.1(2)(a.1) of the Criminal Code, the limit on the total cost of borrowing under a payday loan agreement is 14% of the amount of money advanced to the borrower under the agreement.”
- Criminal Code, s. 347.1(2) — non-application (payday exemption conditions). Justice Laws Website, Government of Canada. https://laws-lois.justice.gc.ca/eng/acts/C-46/section-347.1.html (retrieved 2026-08-24).“Section 347 and section 2 of the Interest Act do not apply to a person … if (a) the amount of money that is or would be advanced under the agreement is $1,500 or less and the term of the agreement is or would be 62 days or less; (a.1) the total cost of borrowing under the agreement does not or would not exceed the limit fixed by regulation; (b) the person is licensed or otherwise specifically authorized under the laws of a province to enter into the agreement; and (c) the province is designated under subsection (3).”
- Criminal Code, R.S.C. 1985, c. C-46, s. 347 (criminal interest rate). Justice Laws Website, Government of Canada. https://laws-lois.justice.gc.ca/eng/acts/C-46/section-347.html (retrieved 2026-08-24).“criminal rate means an annual percentage rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds 35 per cent on the credit advanced”
- Criminal Code, R.S.C. 1985, c. C-46, s. 347.1 (payday loans). Justice Laws Website, Government of Canada. https://laws-lois.justice.gc.ca/eng/acts/C-46/section-347.1.html (retrieved 2026-08-24).“payday loan means an advancement of money in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature but not for any guarantee, suretyship, overdraft protection or security on property and not through a margin loan, pawnbroking, a line of credit or a credit card.”
- Criminal Code, s. 347.1(3) — designation of province. Justice Laws Website, Government of Canada. https://laws-lois.justice.gc.ca/eng/acts/C-46/section-347.1.html (retrieved 2026-08-24).“The Governor in Council shall, by order and at the request of the lieutenant governor in council of a province, designate the province for the purposes of this section if the province has legislative measures that protect recipients of payday loans and that provide for limits on the total cost of borrowing under the agreements.”
- Payday loans — Financial Consumer Agency of Canada. Financial Consumer Agency of Canada (FCAC). https://www.canada.ca/en/financial-consumer-agency/services/loans/payday-loans.html (retrieved 2026-08-24).