SUMMARY OF RECOMMENDATIONS
 The preliminary findings and recommendations of the working group are as follows:
- Section 2 of the Interest Act reflects federal policy in relation to interest rates and as such does not overlap or conflict with provincial or territorial legislation.
- Section 3 of the Interest Act continues to serve a useful purpose but might have more utility if it were amended so that it was tied to market rates in some fashion rather than being fixed at 5% per annum.
- Section 4 of the Interest Act does not clash with provincial or territorial legislation dealing with cost of credit disclosure and will apply in relation to transactions not covered by that legislation, and for these reasons still has utility. Consideration should be given to requiring disclosure of an effective rate of interest rather than an annual rate of interest under this provision.
- A strong case can be made for repeal of section 6 of the Interest Act, particularly if the provinces and territories were to provide protection to small business borrowers under their legislation and to make further efforts at establishing uniformity in their credit disclosure legislation and its coverage of mortgage loans.
- Section 8 of the Interest Act has become less relevant than it was when originally enacted in light of provincial and territorial consumer legislation. If the section was reformed so as to limit its scope to mortgages that charge real property primarily used by the borrower and collateral mortgages given by small business persons against their homes, it would serve a useful purpose not already served by the consumer legislation.
- The working group has concluded that consultation with legal practitioners and stakeholders will be required in order to formulate a recommendation in relation to section 10 of the Interest Act.
The working group proposes that it continue its work into 2009 and, in particular, that it consult with the appropriate sections of the Canadian Bar Association and with stakeholder groups in relation to its preliminary recommendations.