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High-Cost Credit in Canada

What “high-cost credit” means in Canada, how the 35% criminal-interest framework interacts with provincial rules, and why payday loans are treated differently.

Reviewed: August 19, 2026 · Canadian consumer lending · Primary-source grounded
Key point: Canadian lending rules depend on both the credit product and the provider. Federal boundaries can operate alongside provincial licensing, disclosure and consumer-protection rules.

High-cost credit is not one uniform legal category across Canada. Provinces can define and regulate expensive non-payday credit differently. Alberta, for example, regulates credit at 32% or more as high-cost credit, while British Columbia describes high-cost products as credit above 32% APR; both regimes cover online activity. The federal Criminal Code separately establishes the criminal-interest boundary.

Since January 1, 2025, the federal criminal rate framework is 35% APR. That change matters for instalment loans, lines of credit and other products, but borrowers should not assume that “under 35%” means inexpensive or that it satisfies every provincial rule.

Why payday loans are different

Qualifying payday loans can operate under a specific Criminal Code exemption when provincial requirements are met. FCAC says payday loans are short-term, high-fee products and warns borrowers to verify that the lender is licensed in their province. The federal reforms also set a $14-per-$100 payday-loan cost ceiling for the exemption framework.

How to evaluate a high-cost app loan

  1. Identify whether the product is fixed credit, open credit, a payday loan or another product.
  2. Find the legal lender, not just the app brand.
  3. Calculate APR and total dollar repayment, including mandatory fees.
  4. Check the province’s licensing and disclosure rules.
  5. Compare lower-cost alternatives before accepting.

Provincial examples

Alberta requires high-cost credit businesses, including online operators, to hold a licence and defines covered fixed credit using an APR of 32% or more. Consumer Protection BC says anyone offering, arranging, providing or facilitating high-cost credit in B.C. needs a licence and describes the covered range as above 32% APR, subject to the federal ceiling.

How this connects to your province

Use the Canada Digital Lending Knowledge Center to open your province guide. Provincial pages identify local payday-lending, licensing and consumer-protection sources. Do not assume that a rule described for one province applies unchanged in another.

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Primary sources

AppLoans prioritizes government and regulatory sources. This page is educational information, not legal or financial advice. Rules can change; verify current requirements with the applicable regulator.