Payday loans are legal in Canada, but they're regulated at the provincial level, not federally. That means the maximum cost of borrowing, loan term limits, and licensing rules can differ depending on where you live — even though the federal Criminal Code sets an overall interest rate ceiling that provincial rules operate underneath.
Why Provinces Regulate Payday Loans
Section 347 of the Criminal Code technically caps interest rates at 60% annually, which would make most payday loans illegal on its face. However, the federal government created an exemption allowing provinces to set their own payday loan rules, provided the province has its own regulatory framework — which is why cost-of-borrowing caps for payday loans (typically far above 60% APR) are legal despite that section of the Criminal Code.
Ontario
Cost of borrowing cap: $14 per $100 borrowed (~365% APR equivalent)
Maximum term: 62 days
Maximum loan: Up to $1,500
Representative example: $500 loan, 62-day term, $70 cost of borrowing, $570 total repayment, 82.42% APR
See our full Ontario payday loan rules breakdown for more detail.
Saskatchewan
Cost of borrowing cap: $14 per $100 borrowed (~365% APR equivalent)
Maximum term: 62 days
Maximum loan: Up to $1,500
Representative example: $500 loan, 62-day term, $70 cost of borrowing, $570 total repayment, 82.42% APR
See our full Saskatchewan payday loan rules breakdown for more detail.
British Columbia
Regulator: Consumer Protection BC
BC has historically had one of the lower cost-of-borrowing caps in the country, with periodic rate reductions — borrowers should confirm the current cap directly with Consumer Protection BC, as it has changed more than once in recent years.
Alberta
Regulator: Service Alberta
Alberta significantly lowered its cost-of-borrowing cap in past years and also requires extended repayment plan options for borrowers who request them.
Manitoba
Regulator: Manitoba Public Utilities Board
Manitoba has historically had one of the lowest cost-of-borrowing caps in Canada.
Quebec
Regulator: Office de la protection du consommateur (OPC)
Quebec's approach is notably different: the province's general interest rate cap effectively makes traditional payday lending, as offered in other provinces, largely unworkable — payday loan storefronts are far less common here as a result.
Provinces and Territories Without Specific Payday Loan Legislation
Some provinces and territories — including the Atlantic provinces in certain cases, and the territories (Yukon, Northwest Territories, Nunavut) — either have limited payday-loan-specific regulation or none at all. In those jurisdictions, the general 60% federal cap under the Criminal Code technically applies, since no provincial exemption framework has been established. This means payday lending, as it's structured in Ontario or Saskatchewan, isn't necessarily licensed or operating the same way in these regions.
The Bottom Line
Payday loans are legal across most of Canada, but "legal" doesn't mean "identical." The cost of borrowing, maximum term, and even whether a formal licensing regime exists at all varies significantly by province. Always confirm a lender's licence with your province's specific regulator before borrowing — a licence in one province doesn't transfer to another. AppleTree Cash is licensed in Ontario and Saskatchewan — see our comparison of payday loans vs. other short-term credit to weigh your options.
This article is for general information and does not constitute legal or financial advice. Provincial regulations change periodically — confirm current rules with your provincial regulator.