Cashing out new payday loan establishments facing Barrie’s Dunlop Street — both east and west — will be on city councillors’ plate Monday night.
Coun. Sergio Morales has an item-for-discussion motion on the agenda that city staff report back concerning the restriction of payday loan establishments along Dunlop Street when the city's updated zoning bylaw is presented to Barrie councillors for consideration this fall.
“The focus is on restricting them on… being able to open in space that fronts on Dunlop Street. It’s not restricting them from the downtown core,” Morales said. “Some people have... a moral objection to them, some people say they should be regulated, in terms of interest rates or just banned altogether by the provincial or federal government. That’s a different discussion.”
The Ward 9 councillor says there are few payday loan companies on Dunlop Street, so this is the time to restrict them.
“Businesses, landlords and other tenants have a tough time operating or opening up or basically going about business with them (payday loan establishments) present on the main strip,” Morales said of Dunlop Street.
“My intention is not to restrict them from actually existing, but... especially as the west end redevelops and tries to emerge out of COVID, I think the intention of the motion is to try to make it easier and try to create a bit of critical mass in the west end with a good mix of businesses, the way the east end of downtown Barrie has had," he added.
Coun. Keenan Aylwin, who represents the downtown, says he will propose changes to Morales' motion Monday.
“I don't think the motion goes far enough and will be looking to introduce an amendment,” Aylwin said. “I believe we need to take a closer look at restricting payday loan establishments across the city, but in particular the downtown. These corporations prey on vulnerable people, often trapping them in a crushing cycle of debt by imposing exorbitant interest rates.
“These predatory businesses are often concentrated in lower income neighbourhoods,” he added. “The province granted municipalities the power to restrict payday loan establishments in 2018. It’s time for Barrie to consider how these businesses are hurting people in our community.”
Morales says restrictions could be done through zoning or city bylaws, whatever is most effective. He also said there has been no pressure from downtown merchants to do this and it is not connected to the Downtown BIA, an organization which he chairs.
“I think all of us are getting advocacy about creating critical mass for the west end" of Dunlop Street, Morales said, which he says extends just past Barrie Fire Station No. 1. “There’s just not enough critical mass of an effective mix of businesses to give people a reason to go to the west end and stay in the west end.
“This is one very small thing in the direction," he added.
There is only one such establishment which is open and facing Dunlop, Pay2Day at 79 Dunlop St. W. An employee there told BarrieToday the manager was on vacation and he was not authorized to speak.
But Manjeet Virk, assistant manager of Cash ‘UR’ Check at 5 Clapperton St., near the Five Points, said any restrictions on the sector would be bad for business, especially given the effects of the pandemic.
“It’s going to be trouble, a whole lot of trouble,” he said. “These businesses carry so much risk. If they are going to be restricted, there are going to be a whole lot of expenses.”
Virk mentioned marketing, advertising and infrastructure.
“It doesn’t matter if it’s a payday business or a restaurant, every business is suffering,” he said.
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.
