payday loan than their higher-income neighbour (Bond, 2016. p.45). In 2015, as part of the MGCS consultation process, MGCS surveyed 500 payday loan borrowers. The results found that 18 percent took out ten or more payday loans within the last 12 months, and slightly more than half used payday loans to cover recurring expenses. Their findings are consistent with additional research conducted across Canada.

Data collected by the Federal Government of Canada and a multi-provincial review of payday loans across British Columbia, Alberta and Manitoba indicate payday loans are utilized for a variety of factors. Consistent in both reports, the majority of customers identified borrowing using a payday loan to cover necessary expenses due to a lack of income (Canada, 2016). Other reasons included: unexpected expenses (34%), avoiding late charges on routine bills (22%), a temporary reduction in income (20%), and avoiding bouncing cheques and purchasing an item they wanted (13% respectively) (Dijkema, 2018).

The current annual percentage rate of a payday loan in Ontario is 390%. On the Ontario MGCS website, the government cautions individuals from accessing payday loans due to high costs and recommends pursuing other avenues to access capital, including family or friends, a bank or credit union, or credi t card. In the Government of Canada’s survey, respondents reported lower access to traditional financial series than the typical Canadian (Canada, 2016). In the report, several reasons for not accessing credit from a bank or credit union included:

Most significantly, a high number of respondents (35%) indicated they did not have access to a bank account at the time of their last payday loan, whereas 99% of Canadians reported having access to a bank account (Bond, 2016). Having a bank account is not a reality for some, even for recipients of Ontario Works. Thus, the Executive Director of Employment & Social Services continues to work with City staff and community partners like Family Services Windsor Essex to set up bank accounts and direct deposit for the approximate 12% to 13% of clients on the caseload receiving a physical cheque every month. Working towards a longer term solution regarding lack of access to bank accounts, the Ontario Works Department is launching a pilot with Reloadable Payment Cards. The pilot is supported by the Ministry of Children, Community and Social Services .