Local organizations create coalition to bring reform to Manitoba’s payday lending regulations

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A coalition of local organizations convened in front of the Public Utilities Board (PUB) Friday to urge the provincial government to amend regulations and enhance oversight of payday loans and other high-cost credit products.

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The Consumers Coalition, which includes the Manitoba Branch of the Consumers’ Association of Canada, Harvest Manitoba, Community Financial Counselling Services, and the Aboriginal Council of Winnipeg, is advocating for what they describe as long-overdue reforms to the province’s payday lending regulations. They assert that current regulations are insufficient to safeguard Manitoba consumers who are experiencing financial difficulties, struggling to fulfil their basic needs, and facing limited access to credit.

“Manitoba has a narrow focus when it comes to high-cost credit, mainly on payday loans. With a rapidly changing and expanding landscape that now includes many more products, that’s no longer enough. On top of that, Manitoba’s protections for payday loan borrowers are years out of date and the rates they can charge are too high. Manitobans pay more than borrowers in most other provinces,” said Jennifer Montebruno, executive director of Community Financial Counselling Services.

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They presented two of their primary concerns focusing on the protection of Manitobans during this week-long hearing.

“Both of these issues will have big impacts on the wallets of Manitobans, many of whom can’t bear the extra financial burden,” said Peggy Barker of the board of directors of the Manitoba Branch of the Consumers’ Association of Canada.

The coalition said regulations governing high-cost credit products in Manitoba have not evolved in alignment with the national developments within the industry.

“The sector has grown to include many new types of high-cost credit products beyond payday loans and yet there are no regulations that address the expansion and offer consumer protections,” Barker said.

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Residents of Manitoba are incurring higher costs per $100 borrowed compared to other provinces in Canada.

“In 2016, Manitoba led its peers by capping payday loan fees at $17 per $100 borrowed. Manitoba is now a laggard, with the federal government soon to impose a fee cap of $14 per $100 borrowed. Manitoba hasn’t kept pace,” said Meaghan Erbus, director of network, advocacy and education for Harvest Manitoba. “That means Manitobans are still paying more to high-cost lenders than in many other places across the country.”

What accounts for Manitoba’s lag? The Consumers Coalition highlights that the last hearing occurred in 2016. Although the Consumer Protection Act empowers the Minister in charge to instruct the Public Utilities Board (PUB) to reassess Manitoba’s regulation of this sector, a review was declined in both 2019 and 2022.

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“Manitoba’s government can’t allow eight years to pass again with respect to oversight and regulation of high-cost credit products in our province. The industry is changing rapidly and expanding to include new products,” said Damon Johnston, president, Aboriginal Council of Winnipeg. “Without oversight, the cost could be too great for average Manitobans to bear.”

The recommendations put forward by the coalition utilized evidence-based data and reports that pertain to the proliferation of high-cost credit products beyond payday loans, as well as an evaluation of Manitoba’s cap in relation to the federally mandated limit.

The hearing started Friday with opening statements and will conclude Dec. 13. The report and recommendations from the Public Utilities Board (PUB) to the government will be released by June 2025.

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