The Law Commission of Ontario (LCO) is a partnership among the Ministry of the Attorney General, Osgoode Hall Law School, the Law Deans of Ontario’s law schools, the Law Foundation of Ontario, and the Law Society of Upper Canada. Its purpose is to recommend law reform measures to enhance the legal system’s relevance, effectiveness and accessibility; improve the administration of justice through the clarification and simplification of the law; consider the use of technology to enhance access to justice; stimulate critical legal debate; and study areas that are underserved by other research.

Pursuant to this mandate, the LCO has initiated a project to examine the issues surrounding fees for cashing government cheques.

Cheque cashing businesses cash third party cheques immediately, so long as adequate personal identification is provided. Concerns have been raised that the fees currently being charged by the cheque cashing industry for cashing government cheques are excessively high, and are having a disproportionate impact on low-income, remote, or marginalized communities that have reduced or limited access to mainstream financial services. The purpose of this project is to examine these concerns and to consider whether steps should be taken to ensure that consumers have access to low-cost services for cashing government cheques.

There has recently been considerable public debate regarding the activities of the Alternative Financial Services (AFS) sector; however, an examination of all of the legal and social policy issues surrounding the operation of this sector is beyond the scope of this project.

Further, while there may be concerns regarding cheque cashing fees in general, this project focuses only on fees for cashing government cheques. While cheque cashing businesses generally do not differentiate between cheques issued by government and by other parties, different policy considerations come into play when dealing with government cheques. The risks associated with cashing government cheques are likely lower than the risks associated with cheque cashing in general, as there is no risk of insufficient funds, only of fraud. Furthermore, government cheques are generally tied to programs that serve important public policy purposes, and frequently target some of the most vulnerable populations in Ontario.

This Consultation Paper summarizes key issues and options for reform, and is intended as a focal point for discussion and consultation. It is being distributed to stakeholders for comment, as well as posted on the LCO website. Based on the LCO’s independent research, including responses to this Consultation Paper, the LCO will issue a final Report with findings and recommendations.

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