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Change could be coming to payday loan outlets with Barrie-wide restrictions

'The less we have of these in our neighbourhoods, I think the better off all of our neighbourhoods will be,' says Coun. Gary Harvey
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Payday loans could be cashing out across Barrie, not just in the downtown.

City councillors gave initial approval to a motion Monday night that staff investigate the feasibility of licensing payday loan establishments under the general business licensing bylaw to restrict their number and concentration throughout Barrie and report back to councillors.

Also, that city staff review the minimum distance separation provisions for payday loan, body piercing, pawnshops and tattoo parlours in the downtown and report back as part of the review of the zoning bylaw.

“These establishments provide loans with exorbitant interest rates, and often that disproportionately harms vulnerable people… in neighbourhoods where there may be more poverty,” said Coun. Keenan Aylwin. “It’s a thing we should be looking at not only to help vulnerable people, but also in terms of economic development. These establishments don’t add much to a neighbourhood or to our downtown. I think it’s time we put some restrictions in place here.”

He noted the province granted municipalities the power to restrict payday loan establishments in 2018. Some municipalities have limited them to one per ward, for example, or limited the number of licences given out.

“I think this is just not a Dunlop (Street), downtown issue,” said Coun. Gary Harvey. “This is definitely a broader issue. These particular types of storefronts, along with the rent-to-own, specifically target those middle- to lower-income earners.

“The less we have of these in our neighbourhoods, I think the better off all of our neighbourhoods will be,” he said. “The last thing we want to see is a bunch of them clustered in any one of our wards. I don’t know if any one of our wards don’t have at least one of these, if not two of these establishments.”

Coun. Sergio Morales’ original motion was that city staff report back concerning the restriction of payday loan establishments along Dunlop Street when the updated zoning bylaw is presented to Barrie councillors for consideration.

Morales said the motion’s focus was to restrict the payday loaners facing Dunlop Street, east and west. There is only one payday loan establishment on Dunlop Street West, although there is one on Clapperton Street, just up from the Five Points.

But there are already zoning bylaw provisions for minimum separation distance of 100 metres for payday loan establishments in the downtown.

Councillors heard Monday that was as much as the zoning bylaw could do to restrict payday loan uses.

Mayor Jeff Lehman asked if a certain type of establishment can be restricted on a single street.

“No,” said Michelle Banfield, Barrie’s director of development services. “There is a separation distance and restricting this particular use on one street is something, from a professional planning opinion, it would be difficult to bring forward to council.”

“Zoning is not a particularly helpful tool. It’s a pretty blunt instrument,” said Coun. Clare Riepma. “I think it’s hard to justify.”

Final approval of this motion will be considered by city council Sept. 20. 

The Financial Consumer Agency of Canada, an arm of the federal government, defines a payday loan as a short-term loan with high fees that make it a very expensive way to borrow money. You can borrow up to $1,500, but you must pay the loan back from your next paycheque, the agency says. You have as many as 62 days to pay it back in Ontario, Manitoba, New Brunswick, Alberta, and British Columbia.

Payday loans are meant to cover a cash shortfall until your next pay or for a short period, the agency says. These loans should be avoided  for ongoing costs such as rent, groceries or utility bills. 

Privately owned companies offer payday loans in stores and online.