Ontario’s Finance ministry has published for comment three draft regulations that propose mandatory disclosure requirements for consumer loans and other disclosure requirements relating to statements and advertisements. The draft regulations also describe how the cost of borrowing under a loan is to be calculated.

These regulations are intended to harmonize Ontario’s cost of borrowing disclosure provisions with those of other jurisdictions across Canada. They reflect the federal-provincial-territorial harmonization agreement that was created through a process of public consultation and intergovernmental negotiation. If implemented, businesses will be able to use the same procedures, credit advertisements and disclosure statements in all parts of the country.

Ontario notes that it is considering how to handle two issues on which the federal government has varied its approach from that of the harmonization agreement: federal regulations deviate from the harmonization agreement on whether open credit, such as a line of credit, should disclose the annual percentage rate (a rate that includes non-interest charges); and on whether a borrower must receive independent legal advice before being able to waive the two-day cooling-off period for mortgage loans.

To ensure that provincial financial institutions are able to compete on a level playing field with their federally regulated counterparts, the ministry proposes harmonizing Ontario’s draft regulations with the federal approach on these two issues.