Interest and Administrative Charges Regulations (SOR/96-188)

Regulations are current to 2018-07-05 and last amended on 2018-04-26. Previous Versions

Interest and Administrative Charges Regulations

SOR/96-188

FINANCIAL ADMINISTRATION ACT

Registration 1996-04-01

Interest and Administrative Charges Regulations

T.B. 823947 1996-03-28

The Treasury Board, pursuant to subsection 155.1(6)Footnote * of the Financial Administration Act, hereby makes the annexed Regulations respecting interest on overdue accounts and administrative charges for dishonoured instruments, effective April 1, 1996.

 [Repealed, SOR/2018-89, s. 2]

Interpretation

 In these Regulations,

Act

Act means the Financial Administration Act; (Loi)

average bank rate

average bank rate means the weighted arithmetic average of the bank rates that are established during the month before the month in respect of which interest is being calculated; (taux d’escompte moyen)

bank rate

bank rate means the rate of interest established periodically by the Bank of Canada as the minimum rate at which the Bank of Canada makes short term advances to members of the Canadian Payments Association; (taux d’escompte)

concessionary loan

concessionary loan means a loan bearing no interest or a rate of interest that is three or more percentage points below the average cost of borrowing of the Government of Canada on the day the loan agreement is entered into; (prêt assorti de conditions privilégiées)

demand for payment

demand for payment means a demand for payment in writing and includes an invoice, bill, statement and assessment; (demande de paiement)

due date

due date means, in relation to an amount owing to Her Majesty

  • (a) for the provision of goods or services or the use of facilities,

    • (i) the due date specified in a demand for payment for, or included in the terms and conditions of, the provision of the goods or services or the use of the facilities, as the case may be, or

    • (ii) where no date has been specified or included as indicated in subparagraph (i), the day that is 30 days after the day on which a demand for payment is issued,

  • (b) with respect to a repayable contribution,

    • (i) every day on which a scheduled repayment is to be made in accordance with the terms and conditions of the contribution, or

    • (ii) where no repayment schedule for the contribution has been specified, the day that is 30 days after the day on which a demand for payment is issued,

  • (c) with respect to the recovery of an overpayment or erroneous payment,

    • (i) every day on which a scheduled repayment is to be made, or

    • (ii) where no repayment schedule has been arranged, the day that is 30 days after the day on which a demand for payment is issued,

  • (d) with respect to a licence, lease, loan, including a hypothecary loan, or a mortgage, every day on which a payment is to be made in accordance with the licence, lease, loan or mortgage agreement,

  • (e) with respect to an accountable advance, the day on which repayment of any balance owing to Her Majesty is to be made in accordance with the Accountable Advances Regulations, and

  • (f) for any other reason,

    • (i) any day on which payment is to be made in accordance with the applicable Act of Parliament, regulation, order, contract or arrangement, or

    • (ii) where a day referred to in subparagraph (i) cannot be determined, the day that is 30 days after the day on which a demand for payment is issued; (date d’échéance)

financial institution

financial institution means an entity, incorporated, continued or formed by or under an Act of Parliament or the legislature of a province or the laws of a foreign state or political subdivision of that state, that holds deposits and honours cheques and other payment instructions on behalf of its clients and includes a bank, a trust company and a cooperative credit society; (institution financière)

in writing

in writing includes in any electronic form that is capable of being reproduced in intelligible, written form within a reasonable time; (par écrit)

pre-authorized debit

pre-authorized debit means a debit to a debtor’s credit card account or other account with a financial institution that is initiated by the creditor, in accordance with a prior authorization given by the debtor to the creditor. (prélèvement automatique)

  • SOR/99-30, s. 1;
  • SOR/2018-89, s. 3(E).

Application

 These Regulations do not apply to

  • (a) amounts owed to a Crown corporation; or

  • (b) amounts owing by a department.

PART IInterest

Application

 This Part does not apply to

  • (a) capital market transactions and, except as provided in section 7, interest-bearing loans, including hypothecary loans, or mortgages;

  • (b) amounts owing to Her Majesty pursuant to the Income Tax Act, or any Act of Parliament that imposes a tax or duty; or

  • (c) amounts referred to in any other Act of Parliament or regulation, or any order, contract or arrangement, that provides for the charging of interest on those amounts.

Rate of Interest

  •  (1) For the purpose of subsection 155.1(1) of the Act and subject to sections 6 to 8, in all cases where an amount is owing to Her Majesty, interest calculated and compounded monthly at the average bank rate plus 3% is payable on that amount and accrues during the period beginning on the due date and ending on the day before the day on which payment is received by Her Majesty or an authorized agent of Her Majesty.

  • (2) If a partial payment is made, the period for which interest is payable in respect of the amount paid ends on the day before the day on which the partial payment is received by Her Majesty or an authorized agent of Her Majesty.

  • SOR/99-30, s. 2;
  • SOR/2018-89, s. 7.

Overpayments and Erroneous Payments

  •  (1) If a person has received an overpayment or erroneous payment, interest is payable by the person on any amount that is not repaid by its due date and accrues as specified in section 5, during the period beginning on the due date and ending on the day before the day on which repayment is received by Her Majesty or an authorized agent of Her Majesty.

  • (2) If a person has received an overpayment or erroneous payment as a result of fraud, falsification of documents, wilful misrepresentation or any other offence committed by that person or by any other person acting on behalf of that person, unless provided otherwise by an order of a court, interest is payable by that person on the amount owing on account of the overpayment or erroneous payment and accrues as specified in section 5, during the period beginning on the day on which the overpayment or erroneous payment is made and ending on the day before the day on which repayment is received by Her Majesty or an authorized agent of Her Majesty.

  • (3) Nothing in subsection (1) shall prevent a deputy head from entering into an arrangement with a person that calls for repayment to be made in instalments and interest to accrue and be paid on the total amount outstanding.

  • SOR/99-30, s. 3;
  • SOR/2018-89, ss. 4, 7.

Concessionary Loans

  •  (1) Subject to subsection (2), in the case of a late or missed payment on a concessionary loan, interest is payable on the amount of the late or missed payment and accrues during the period beginning on the due date and ending on the day before the day on which payment is received by Her Majesty or an authorized agent of Her Majesty, at a rate equal to the difference between the rate set out in section 5 and the concessionary rate set out in the loan agreement.

  • (2) Subsection (1) does not apply to

    • (a) concessionary loans that are made to sovereign states and to which a multilateral debt relief agreement or undertaking to which Canada is a party applies; or

    • (b) concessionary loans that are made to international organizations or sovereign states for the purpose of developmental assistance.

  • SOR/99-30, s. 4;
  • SOR/2018-89, s. 7.

Exceptions for Small Amounts, Errors and Breakdowns

 Notwithstanding any other provision of this Part,

  • (a) no interest is payable to the extent that the interest accrued as a result of

    • (i) any error made or delay caused by Her Majesty, or an authorized agent of Her Majesty, in processing a payment or establishing an amount payable, or

    • (ii) a breakdown or other failure in the system or communication links customarily used by the Government of Canada to process payments; and

  • (b) no interest is payable on an outstanding amount due for a period in respect of a program or service if the total amount payable for the period, including accrued interest, is less than the minimum amount for which a demand for payment would normally be issued, as established by the deputy head responsible for the program or service and published for the purpose of this paragraph on a Government of Canada website.

  • SOR/2018-89, s. 5.
 
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