OTTAWA — The federal authorities is asking banks and credit-card corporations to decrease rates of interest for Canadians, lots of whom are struggling financially due to the COVID-19 pandemic.
The federal government can be taking a look at extending lower-interest credit score on to shoppers, Prime Minister Justin Trudeau mentioned, in his each day replace to Canadians on Thursday.
“I can guarantee you that the finance minister has had conversations instantly with the banks about bank card rates of interest,” he mentioned.
“We acknowledge that they’re a major problem for a lot of Canadians at this level. That’s the reason we’re encouraging them to take motion to alleviate the burden for Canadians. On the identical time we’re taking a look at our finish at making credit score extra out there and cheaper for Canadians to have the ability to make it by means of the following few months.”
The most important banks didn’t instantly reply to requests for remark.
Earlier this week, nevertheless, the Financial institution of Montreal mentioned it’s deferring funds on small enterprise bank cards and credit score strains and on the principal of small enterprise loans.
The Financial institution of Canada has lowered its trend-setting rate of interest to attempt to cushion the blow to enterprise from a slowing financial system however credit-card rates of interest, those that matter most on to most shoppers, stay excessive.
Many rates of interest on bank card debt hover round 20 per cent, although some are as excessive as 30 per cent.
NDP finance critic Peter Julian and business critic Brian Masse have been calling on the federal authorities for days to ask banks and credit-card corporations to decrease rates of interest.
“To date, the federal government has discovered methods to assist firms instantly, however they’re nonetheless making Canadians wait weeks,” mentioned Masse in a press release. “Waiving the curiosity on bank cards for 2 months would instantly assist Canadians get by means of till the federal applications kick in.”
Trudeau mentioned the federal government is spending billions on applications to assist people pay their payments over the following few months because the novel coronavirus forces folks out of labor attributable to sicknesses and enforced closures.
He says decreasing the prices Canadians must pay as they depend on borrowing to cowl their bills is one other a part of the trouble.
Parliament handed an emergency invoice Wednesday that places $107 billion on the desk to assist, together with $52 billion in well being care spending and direct help corresponding to top-ups to little one advantages and GST rebates, in addition to funds to staff who’ve misplaced their revenue due to COVID-19.
One other $55 billion is earmarked for tax deferrals, permitting companies and people to place off paying tax payments for a number of months.
This report by The Canadian Press was first printed March 26, 2020.