There are few industries more predatory and indicative of the nature of capitalist markets than the payday loan industry. By charging exorbitant interest rates and fees to working people trying to bridge the gap between their paychecks and their living costs, the industry functions as a private tax collector for state failure. These “taxes” fund individuals and entities who have an interest in keeping people desperate and oppressed.

Payday and installment loans are cash sources of last resort for many, but they are common — used by millions of Canadians — especially during times of economic stress and downturn, such as the one we’re living in now. The cost of such loans are astronomical. As Tom Yun reports for CTV News, “Instalment loans are generally offered to borrowers with interest rates between 30 to 60 per cent and meant to be paid back within a fixed period of time. Payday loans are typically $1,500 or less for a period of 62 days or fewer and can have interest rates has high as 548 per cent, depending on the province.” Such rates can leave borrowers far worse off than before, many of whom get stuck in a cycle of interest accumulation they cannot keep up with.

The pandemic has driven more people into the extortionate arms of payday and installment loans. While emergency measures did help some workers, they were time-limited and have expired. Meanwhile, struggles continue. A survey by ACORN Canada of its members found a rise in the number of people taking out a payday loan during the pandemic, many of whom were driven to the high-interest, high-fee lenders because they were rejected by a bank or credit union.