Law Commission of Ontario Releases Report and Recommendations on Fees for Cashing Government Cheques



TORONTO, November 7, 2008 – The Law Commission of Ontario today released its first Report and recommendations, which focuses on fees for cashing government cheques. The Report examines the reasons why low-income individuals use relatively high-cost cheque cashing services to access their government funds, and sets out a comprehensive strategy to ensure that recipients of government benefits can effectively access their benefits without excessive cost or difficulty.

The Report outlines how low income levels, together with rapidly evolving technology and a changing financial services sector, have left some consumers behind, paying relatively high fees to access what most Canadians consider to be basic financial services.

The LCO recommends a package of reforms that combines pragmatic and innovative short-term initiatives to address immediate needs, with recommendations for addressing the underlying causes of the problem over the longer-term. This includes comprehensive regulation of the cheque cashing industry, with licensing and disclosure requirements, a process for setting maximum fee rates and a compliance mechanism. As well, the LCO recommends measures to increase options for low-income consumers, such as the negotiation of an indemnity agreement between mainstream financial institutions and the government to allow consumers to cash government cheques without delay or fee, ensuring that low-income Ontarians can access the identification they need to obtain financial services, and initiating a pilot project to explore delivery of benefits through debit cards in remote communities without financial institutions.

“The measures recommended by the LCO can assist the most vulnerable citizens of our Province by improving their access to their government benefits, encouraging stronger relationships between low-income communities and mainstream financial institutions, and ensuring that government funds aimed at benefiting the most needy do so more effectively and efficiently” said Dr. Patricia Hughes, Executive Director of the LCO.

The Report is based on extensive research and consultations with government, financial institutions, community organizations, academics and legal clinics. Launched last September, the LCO, which is housed at Osgoode Hall Law School of York University, operates independently of government to recommend law reforms to enhance access to justice.


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Lauren Bates
Staff Lawyer
Law Commission of Ontario
(416) 650-8406