Work & Economics

Ontario’s new payday lending laws provide municipalities with both opportunities and responsibilities. This paper presents guidelines for addressing the challenges that accompany payday lending in cities.

While the issue of restrictive tendering is the result of provincial law made in Toronto for the whole province, it is local communities, and the citizens, workers, and companies living and working there, that are affected. This paper focuses on data from one particular municipality, the Region of Waterloo, which, because of its relatively recent certification as a construction employer, did not have data that fit within the time frame studied by our previous papers.

Ontario’s new payday lending rules kicked in this year. They’re supposed to strengthen the hand of consumers who borrow less than $1500 for terms of less than 60 days. But will the rules succeed?

Cardus graded the new regulations according to research drawn from our report “Banking on the Margins: Finding Ways to Build an Enabling Small-Dollar Credit Market”. Here are the results:

The empirical results of this paper, which compiles bidding data from a variety of Ontario municipalities over time, suggest that restricting tendering to a select group of firms on the basis of their workers’ affiliations will lead to higher costs for municipalities than if they tendered their projects to all qualified bidders, with the strong possibility that municipalities will pay a substantial magnitude more.

Program Director Brian Dijkema responds to a recent article by John Rapley and asks: Why can't economics be more like religion?

Dr. Mark Milke considers the role of family factors in changing rates of poverty and inequality, for the first time in Canada. The data show that the family form with the highest income level (two parents with children) diminished from 71.6 percent of families in 1976 to just 49.8 percent of families in 2014. Family fracturing appears to correlate with changing inequality levels. If we seek solutions to the problems of inequality and poverty, understanding the family angle matters.

Cardus was asked by Ontario's Ministry of Government and Consumer Services to offer feedback on proposed changes to various acts pertaining to payday lending and other financial services in Ontario. We were pleased to see that many of the recommendations that Cardus outlined in Banking on the Margins: Finding Ways to Build an Enabling Small Dollar Credit Market have been taken up by the government in its proposed regulations. However, we continue to caution on the unintended consequences of laws and regulations that might unduly affect consumers who most desperately need access to cash.

For more, read:

Testimony to Standing Committee on Social Policy on Putting Customers First Act (Bill 59)

Lowering the Cost of Borrowing for Payday Loans in Ontario

Too much political influence increases the distance between unions and workers at the shop level, causing workers to see the state, not unions, as the primary advocate for the protection of their rights. And this is a disease, maybe even the death knell, for the labour movement.

Robyn Benson’s charge to her members over the payroll debacle is at the heart of why unions in Canada are in decline.

Back in 2014, Cardus published a paper on the tendering situation in Toronto and noted that "the structural framework for bidding on major municipal projects in is analogous to those which were present in Quebec that all parties suggest led to the culture of corruption traced in the Charbonneau report."

Over at my other day-job, Comment magazine, I have written a review of Samuel Bowles’ recent book The Moral Economy: Why Good Incentives Are No Substitute for Good Citizens. You can find it here.

Who are you going to serve? A supplementary to theological writings on money from the Archbishop of Canterbury, Justin Welby, and a recent Theology of Money produced by the Anglican Church of Canada.

The Ontario government’s Putting Consumers First Act (Bill 59) takes some positive steps on payday loans, but also leaves out several important measures that could help consumers. While it is good to see that Bill 59 tries to reduce repeat borrowing from payday lenders and ease repayment of loans with usurious interest rates, the bill is too focused on regulation. Brian Dijkema, Work & Economics Program Director at public policy think tank Cardus, told a legislative committee that consumers attracted to payday loans need alternative options.

Economics is too important to put in a place of ultimate importance.

It makes sense that most of our public debate about infrastructure spending focuses on revenue. Where will we get the money? Who will pay? How? Which tax structures will be needed to build our bridges? Should we borrow to pay for our water treatment plants and subway lines? If so, how much?

But too heavy a focus on revenue can lead us to neglect sound public policy focused on cost containment.

This paper is intended as a reminder and a spur. A reminder of the practices and data that allow governments to invest responsibly and in the public interest. And a spur to government, industry, labour, and others to consider that fair, open, and competitive tendering lightens that burden on this generation and the next.

Trust, cooperation, and belonging are vital contributors to resilience. How well do understand these dynamics at neighbourhood levels?

Vibrant civic life requires effective balancing of freedom and responsibility at all scales of society. How do we discover and foster this balance?

Churches and faith communities of various traditions have a great deal to offer to society and to the common good. Typically, these contributions have focused on qualitative contributions that congregations make to the cultural, spiritual, and social well-being of the communities that surround them. Few studies, however, have assessed these contributions in quantitative monetary terms. Even fewer, qualitative or quantitative, have begun to explore how these realities might create a space for faith communities at the social policy table. Welcome to the Halo Project.

Though seldom sensational, Canada's charitable activities are essential to our civil society. Our charities provide meaning, purpose, and belonging amid the dark labyrinths of alienation that characterize our time.

Ontario's Ministry of Government and Consumer Services is seeking input and comment on whether to lower the cost of borrowing a payday loan and, if so, what the maximum total cost of borrowing should be. In particular, the government outlined a series of questions intended to guide responses. Here is the Cardus response.

For access to profitability analysis based on interest rates of payday loan providers, click here.

Canadian businesses tend to be leading players in public policy debates, pushing governments to ask hard questions about costs and efficacy....except in K-12 education. The business community is virtually silent on an issue to which governments dedicate more money than any other service save health. This report asks, Why?

Our current payday loan market is failing consumers and society and government regulations alone cannot solve the current situation. Our new report, Banking on the Margins, aims at reforming Canada's payday loan market. In this report, we call for joint efforts between government, banks, credit unions and charities to provide customers with lower rate loans as an alternative to payday loans.

Marriage is a source of great societal stability. Unfortunately, marriage is on the decline, common law is on the rise, and lone parenting is also on the rise. The bulk of lone parents remain women. Thankfully, today in Canada, two married parents still remain the norm.

Most international research on income and divorce suggests that women and children suffer more financially from a divorce than men.

Cardus sets out to reform the payday loan industry.