Payday loan rules and cost caps

A payday loan in Canada is a small advance of $1,500 or less for a term of 62 days or less, and where a province licenses the product the total cost of borrowing is capped at $14 per $100 advanced.

Maximum cost of borrowing (provinces with an approved regime) $14 per $100 advanced Canada Gazette, Part II — Payday Lending Regulations, SOR/2024-114, as of 2024-06-19 — Limit fixed under the Payday Lending Regulations for the purposes of paragraph 347.1(2)(a.1) of the Criminal Code.

Maximum amount advanced to qualify as a payday loan $1,500 or less Department of Justice Canada — Criminal Code, as of 2026-07-21

Maximum term to qualify as a payday loan 62 days or less Department of Justice Canada — Criminal Code, as of 2026-07-21

Lowest published provincial limit described in the Regulations $14 per $100 (Newfoundland and Labrador) Canada Gazette, Part II — Payday Lending Regulations, SOR/2024-114, as of 2024-06-19

Highest published provincial limit described in the Regulations $17 per $100 (Manitoba and Saskatchewan) Canada Gazette, Part II — Payday Lending Regulations, SOR/2024-114, as of 2024-06-19

Dishonoured cheque or instrument fee excluded from the cap $20 or less Canada Gazette, Part II — Payday Lending Regulations, SOR/2024-114, as of 2024-06-19

Quebec payday lending licence See the published figure Financial Consumer Agency of Canada, as of 2024-06-19 — Quebec does not license payday lending. Not verified against the FCAC page during this build — confirm with the publisher.

Your province's current cap See the published figure Financial Consumer Agency of Canada, as of 2024-06-19 — Provincial caps are set provincially and change. Confirm the figure in force where you live with your provincial regulator.

Payday lending is the most tightly prescribed consumer credit product in Canada. Two things decide how it is treated: whether the advance fits the federal definition of a payday loan, and whether the province the borrower lives in operates a licensed payday regime.

What makes a loan a payday loan

The Criminal Code defines a payday loan as an advancement of money in exchange for a post-dated cheque, a pre-authorized debit or a future payment of a similar nature, where the amount advanced is $1,500 or less and the term is 62 days or less. Both conditions have to hold. A $900 advance for 45 days is a payday loan; the same $900 over 90 days is not, and falls back under the general criminal rate of interest instead.

The federal cost cap

Where a province has an approved payday lending regime, the Payday Lending Regulations cap the total cost of borrowing at $14 per $100 advanced. Provinces that operate a regime may set a lower number, and the lower number applies. The Regulations also fix what may be excluded from the calculation: a dishonoured cheque or instrument fee of $20 or less is outside the cap, and interest of up to 2.5% per month on an outstanding balance after the due date is outside it too.

What differs by province

The Regulations themselves describe provincial limits as ranging between $14 per $100 borrowed in Newfoundland and Labrador and $17 per $100 borrowed in Manitoba and Saskatchewan. Provincial regimes also set their own one-time dishonoured cheque fee: $20 in British Columbia, Manitoba, New Brunswick and Newfoundland and Labrador; $25 in Alberta, Ontario and Saskatchewan; and $40 in Nova Scotia. Quebec does not license payday lending at all, which effectively removes the product from the market there.

What a payday loan costs in practice

At the federal cap, $500 advanced for 14 days carries a $70 charge, so $570 is repaid. The charge looks small next to the principal and very large when annualised, which is why the annualised equivalent is worth calculating rather than eyeballing. The payday cost calculator does that arithmetic from whatever charge per $100 you have been quoted.

Where to check your own province

Provincial caps are set by provincial regulation and are re-published by the province's own regulator. This page states the federal position and the range the federal Regulations describe; for the exact cap in force where you live, use the regulator for your province. The province pages name the regulator for each province and territory.

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