Thank you, Mr. Chair.
I am here just to offer some insight and education regarding the payday loans industry, which Canada Post has put forward as consideration for additional revenue. Just through a Q and A format.... The payday loan customer is your average Canadian who lives paycheque to paycheque. There are more of those than most of us probably realize. They have extended their credit, or they don't have any credit, so they haven't planned for unexpected expenses.
The demographics are half male, half female, and the age range is 35 to 45. They usually rent. Very few are homeowners, so they don't have additional lines of credit or home equity. The segment that's growing, in particular, is seniors on a fixed income. Living month to month, they don't have the resources for those unexpected expenses. It's something they don't expect: replacing a car, medical or dental bills they can't afford, or household expenses. The average income of the payday loan customer, nationally, is about $35,000 a year. Until about a year ago, it was much higher in Alberta, as we might understand.
Why does one use a payday loan? Well, they are poor planners. They don't think of the future. Credit is easy to get, so they often abuse credit early on, and then they can't acquire additional credit. They live right to their means, sometimes slightly above their means, so at some point in time they need that extra money for unexpected expenses. They can't go to a bank and get a short-term loan, and clearly they don't have any savings.
The average customer uses a payday loan five times a year, and only half come back a second time. Many try it on, cover their expenses, pay it back, and then move on. There are really no alternatives besides pawn loans or family and friends.
As I said earlier, you simply can't go to the bank, ask for $500, and promise to pay it back in two weeks, so there really aren't many options.