[1] Bill 48, the Payday Loans Act, 2008, S.O. 2008, c. 9, received Third Reading on June 9, 2008, and Royal Assent on June 18, 2008. At the time of writing, Bill 48 had not yet been proclaimed into force, although this was expected to occur shortly.

[2] For example, a single person receiving assistance through Ontario Works currently receives a maximum of $560 per month ($6720 annually). The 2007 Low Income Cutoff for a single person was $14,914 for rural areas and $21,666 for large urban areas.

[3] For more information on the Government’s anti-poverty initiative, see the Government of Ontario’s website, www.ontario.ca/GrowingStronger.

[4] The most recent figures are those provided by the Financial Consumer Agency of Canada. See Les Études de Marché Créatec, General Survey on Consumer Financial Awareness, Attitudes, and Behaviours (Ottawa: Financial Consumer Agency of Canada, 2006) at page 4. 96 per cent of those responding to this survey reported holding a bank account. Extrapolated to population figures, it was estimated that nearly 1 million adult Canadians do not hold a bank account.

[5] R. Morisette, “On the Edge: Financially Vulnerable Families”, Canadian Social Trends (Statistics Canada: Winter 2002) at 13.

[6] The poverty rate for First Nations households is 34 per cent. (Statistics Canada, Selected Income Characteristics, 35). A 2000 Report by the Ontario Federation of Indian Friendship Centres reported that over 50 per cent of Aboriginal children growing up off-reserve in Ontario are poor (Ontario Federation of Indian Friendship Centres, Urban Aboriginal Child Poverty: A Status Report on Aboriginal Children and their Families in Ontario (Toronto:2000), available online at www.ofifc.org/ofifc.home/page/Document/UP_FILE/20070723101231NVN.pdf

[7] For a very thorough and recent discussion of the phenomenom of low-income among racialized communities, including newcomers, see Michael Ornstein, Ethno-Racial Groups in Toronto 1971 – 2000: A Demographic and Socio-Economic Profile (Institute for Social Research, January 2006).

[8] Ontario Association of Food Banks, Our Choice for a Better Ontario: A Plan for Cutting Poverty in Half by 2020 (Toronto: 2008), at 7, available online at www.oafb.ca.

[9] These initiatives also discussed in detail in Part IV. As examples, Quebec has longstanding legislation prohibiting any charge for exchanging or cashing a cheque issued by the federal, provincial or any municipal government; the provinces of Manitoba and British Columbia have undertaken legislative initiatives to regulate the fees charged for cashing government cheques; and the federal government, in conjunction with an indemnity agreement with the banks, prohibits banks from charging a fee to non-account holders for cashing a federal government cheque in an amount less than $1,500.

[10] Also see, Financial Consumer Agency of Canada, What You Should Know About Low-Cost Accounts, available online at http://www.fcac-acfc.gc.ca/eng/publications/LowCostAccounts/ LowCostAccounts_TOC_e.asp.

[11] Acceptable identification includes a driver’s license, social insurance number, Canadian birth certificate, current passport (either Canadian or from another country), debit or bank cards, credit cards, Old Age Security cards, Certificate of Indian Status, Certificate of Canadian Citizenship or Naturalization, or Permanent Resident card. This arrangement is dealt with in more depth at section IV.E.1.

[12] Bank Act, S.C. 1991, c. 46, s. 458(4); Access to Basic Banking Regulations, S.O.R./2003-184, ss. 6-10.

[13] As these arrangements are local and informal, it is difficult to assess how common they are. Often, they also involve initiatives on the part of the social service agency to provide verification of the cheque as some protection against fraud.

[14] The Canadian Payday Loans Association, which represents 21 payday loan businesses, has adopted a Code of Best Business Practices which prohibits members from providing payday loans to social assistance recipients. The Code is available online at http://www.cpla-acps.ca/english/consumercode.php. The practice of providing payday loans to social assistance recipients was referenced during Committee hearings on Bill 48: see Ontario Legislative Assembly, Official Report of Debates (Hansard), Standing Committee on General Government, (26 May 2008) at 1430 (Honourable Ted McMeekin).

[15] Ipsos-Reid, Public Experience with Financial Services and Awareness of the FCAC (Ottawa: Financial Consumer Agency of Canada, 2005) at page 10.

[16] Wendy Pyper, “Payday Loans”, Perspectives (Statistics Canada: Ottawa, April 2007).

[17] Les Études de Marché Créatec, cited above at note 4, at page 5.

[18] Les Études de Marché Créatec, cited above at note 4, at page 5.

[19] Manitoba Public Utilities Board, Transcript of Proceedings, “To Determine Allowable Fee for Cashing Government Cheques” (Manitoba: March 8, 2007) at 286. Available at: http://www.pub.gov.mb.ca/transmisc.html

[20] Figures on government cheques in this section are based on information provided through the Office of the Provincial Controller.

[21] The Ontario Child Benefit was launched in July 2008. This is a monthly benefit to low-income families with children under the age of 18, payable both to families that are employed and those in receipt of social assistance. Families in receipt of social assistance will have their social assistance rates adjusted to take into account the new Ontario Child Benefit and the National Child Benefit Supplement. For more information on the Ontario Child Benefit see http://www.gov.on.ca/children/english/programs/ocb/index.html.

[22] For a general overview, see Human Resources and Social Development Canada, Social Assistance Statistical Report: 2005.

[23] Ministry of Community and Social Services, Ontario Social Assistance Quarterly Report (Toronto: Social Policy Development Division, March 2008).

[24] Statistics Canada, Low Income Cut-offs for 2007 and Low Income Measures for 2006 (Ottawa: Ministry of Industry, 2008).

[25] See Les Études de Marché Créatec, cited above at note 4, at 1.

[26] See Les Études de Marché Créatec, cited above at note 4, at 8.

[27] Jerry Buckland, Strengthening Banking in Inner Cities: Practices & Policies to Promote Financial Inclusion for Low-Income Canadians (Canadian Centre for Policy Alternatives: Ottawa, March 2008).

[28] Centre Francophone de Toronto – Nos clients doivent donc, surmonter plusieurs obstacles dont la barrière linguistique, le choc culturel et surtout sur le plan économique, l’intégration est de plus en plus difficile le marché du travail leur étant inaccessible. La plupart ne peuvent compter que sur le chèque d’aide sociale et l’aide financière qu’ils reçoivent du gouvernement. Et comme ils ne peuvent pas ouvrir facilement un compte bancaire soit par ignorance de leurs droits ou des exigences des banques ils se tournent vers des services d’une société de prêt sur salaire ou d’encaissement de chèques.

[29] For information on the activities of the FCAC, visit their website at www.fcac-acfc.ca.

[30] See www.fin.gc.ca/toce/2003/cu_e.html.

[31] According to a recent survey conducted for the FCAC, almost half of all Canadians surveyed reported using the Internet to do some of their everyday banking activities. Over 90 per cent of Canadians are estimated to have debit cards. See Les Études de Marché Créatec, cited at note 4, at pp. 4 and 7.

[32] See Les Études de Marché Créatec, cited at note 4, at pp. 12, 15, and 16.

[33] Task Force on the Future of the Canadian Financial Services Sector, Background Paper #4: Change, Challenge, Opportunity: Canadian’s Expectations and Corporate Conduct (Ottawa: Department of Finance, 1998) at 11.

[34] This is the definition adopted by the federal government’s Policy Research Initiative: See Policy Research Initiative, Why Financial Capability Matters (Government of Canada: Ottawa, 2005) at page 6.

[35] See note 4 above.

[36] In the United States, conservative estimates of the proportion of the population that is unbanked hover around 10 per cent. See Jean Ann Fox, and Patrick Woodall, Cashed out Consumers Pay Steep Premium to “Bank” at Check Cashing Outlets (Consumer Federation of America: November 2006) at 16.

[37] Policy Research Initiative, cited above at note 34, at pp. 7-12.

[38] Task Force on the Future of the Canadian Financial Services Sector, cited above at note 33, at page 21.

[39] Manitoba Public Utilities Board, see note 19, above.

[40] Task Force on the Future of the Canadian Financial Services Sector, cited above at note 33 at page 22.

[41] Tavia Grant, “Sharia compliant finance is increasingly popular”, Globe and Mail (7 May, 2007). The South Asian Legal Clinic noted that as a result of the lack of appropriate services, some of their clients are operating in a cash economy.

[42] Jerry Buckland, Social and Economic Factors to Consider in Setting Government Cheque Cashing Fees in Manitoba (Winnipeg: Manitoba Public Utilities Board, 2006) at page 9.

[43] Task Force on the Future of the Canadian Financial Services Sector, cited above at note 33, at page 22.

[44] Michael Grant, Canada’s Social Payment Disbursement System and the Financial Services Sector (Ottawa: Task Force on the Future of the Canadian Financial Services Sector, 1998) at page 12.

[45] Financial Consumer Agency of Canada, cited at note 10 above. Also see Appendix E.

[46] Access to Basic Banking Regulations, cited at note 12.

[47] Financial Consumer Agency of Canada, 2004-2005 FCAC Mystery Shopping Results, available online at www.fcac-acfc.gc.ca/eng/Publications/SurveyStudy

[48] Access to Basic Banking Regulations, cited above at note 46, at s. 4.

[49] Erika Khandor and Kate Mason, The Street Health Report 2007 (Toronto: Street Health, September 2007), available at: http://www.streethealth.ca/Downloads/SHReport2007.pdf.

[50] See, for example, Jerry Buckland, cited above at note 42 at page 15; Michael Grant, cited above at note 44, at page 28.

[51] Bill 85, Photo Card Act, 2008, at section 3. Bill 85 received first reading on June 3, 2008 and second reading on June 11, 2008.

[52] Ministry of Transportation, Enhanced Driver’s License (EDL), Photo Card, and Photo Comparison Technology, Frequently Asked Questions, June 3, 2008.

[53] S.O. 2004, c. 3, Sched. A.

[54] Ontario, Legislative Assembly, Official Report of Debates (Hansard) (December 13, 1990) (Hon. E. Gigantes).

[55] Canadian Bankers Association, “Taking a Closer Look: Access to Basic Banking Services” (August 2006), available online at http://www.cba.ca/en/content/stats/fastfacts/ABBS2006_ UpdateEN(1).pdf.

[56] S.O.R./2002-39.

[57] Cheque imaging technology will allow financial institutions to exchange electronic cheque images rather than physical cheques.

[58] Les Études de Marché Créatec, cited above at note 4, at page 6.

[59] Jerry Buckland and Thibault Martin, Fringe Banking in Winnipeg’s North End (Canadian Centre for Policy Alternatives: March 2005) at 24.

[60] Jerry Buckland et al, Choosing Financial Services Where the Options are Limited (May 2008), available online at: http://io.uwinnipeg.ca/~buckland/.

[61] As of July 2008, the fee for cheque cashing was 1.4 percent, with no additional transaction fee.

[62] Les Études de Marché Créatec, cited above at note 4, at pp. 4 and 7.

[63] Kaufman v. Royal Bank of Canada, [1994] O.J. No. 4162 (Small Claims Court)

[64] Richer v. Ubdegrove, [1989] O.J. No. 73 (Small Claims Court).

[65] Ontario Works Act, 1997, S.O. 1997, c. 25, Schedule A., s. 23(1).

[66] Ontario Disability Support Program Act, S.O. 1997, c. 25, Sched. B, s. 18.

[67] Ontario Works Policy Directive 53.0, “Protection from Seizure and Garnishment”.

[68] “White label” ABMs are usually privately owned, and are often found in convenience stores. While ABMs operated by mainstream financial institutions offer a range of basic banking services, such as deposits, withdrawals, bill payments, and transfers, white label ABMs offer only cash withdrawal services. As well, they charge a fee in addition to regular banking fees of approximately $1.25 per withdrawal. Angie Barrados, Banking in Rural Canada: Ensuring that Rural Consumers Have Adequate Service (Ottawa: Public Interest Advocacy Centre, 2000) at page 25.

[69] Jacquie McNish, “The Dark Side of Class Action Settlements” The Globe and Mail (18 June 2005).

[70] Angie Barrados, cited above at note 68, at page 14.

[71] Notice of Branch Closure (Banks) Regulation, SOR/2002-104, ss. 4-6.

[72] S.C. 1991, c. 48, ss. 375(a) and 375.1, as amended by S.C. 2001, c. 9, ss. 306 and 307.

[73] Canadian Rural Partnership, “Rural Action Plan Report Card” (Government of Canada: November 2002), available at www.rural.gc.ca/conference/documents/card_e.phtml#2.

[74] ACORN Canada, Protecting Canadians’ Interest: Reining in the Payday Lending Industry (Vancouver: ACORN Canada, November 2004), available at: http://acorn.org/fileadmin /International/Canada/Reports/Payday_Lending_Report.pdf; United Way of Greater Toronto, Losing Ground: The Persistent Growth of Family Poverty in Canada’s Largest City (Toronto: November 2007); Jerry Buckland and Bruce Guenther, “There are No Banks Here”: Financial & Insurance Exclusion in Winnipeg’s North End (September 2005).

[75] Iain Ramsay notes the existence of this form of cheque cashing, without further comment in his paper Access to Credit in the Alternative Consumer Credit Market (Office of Consumer Affairs and Ministry of the Attorney General: February 2000) at footnote 29. When questioned, the organizations serving low-inco