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Payday loan shops concentrated in Calgary’s poorest postal code

Calgary business revitalization executive director says 17 Avenue SE could do without pay day loan sites

An investigation into where Calgary's payday loan stores are shows many are clustered in the city's poorest postal code.

Metro File

An investigation into where Calgary's payday loan stores are shows many are clustered in the city's poorest postal code.

More than a quarter of Calgary’s payday loan businesses are located in the city’s poorest postal code, according to data mapped by Metro, and the numbers don’t surprise Service Alberta Minister Stephanie McLean.  

The revelation underscores what the government and anti-poverty advocates call predatory lending, where payday loan companies cluster in lower income neighbourhoods.

Of the 50 payday loan businesses in Calgary that Metro verified, about 16 — or 32 per cent — of operators had shops in the T2A region, which is considered the city’s poorest postal code with a median family income of $61,580.

Eleven of those T2A cash shops are located on 17 Avenue SE, also known as International Avenue.

Minister McLean said the government knew there was a pattern of payday loan sites proliferating in low-income areas.

“It’s pretty easy to see,” she said in an interview. “I’m not surprised, but there was also an abdication of the banking and financial sector.”

But Tony Irwin, president of the Canadian Payday Loan Association, said he strongly disagrees with the government’s predatory characterization.

He said the concentration of stores on Calgary’s T2A region could be because they want to set up shop in popular corridors and be competitive, and they realize there’s a need for the product.

“Maybe it’s because banks and credit unions have left and now it’s being underserved,” Irwin said. “We strongly disagree with that (predatory) characterization — this is a legal, licensed industry just like any others.”

The proliferation of payday loan sites in Calgary’s low-income neighbourhoods was largely a result of lenient laws and the departure of credit unions and banks, which mainly don’t provide banking plans to people with severely poor credit ratings.

That all could change with the province’s new law and the city’s new regulations.

But Alison Karim-McSwiney, executive director of the International Avenue BRZ, said the street is essentially stuck with the payday loan sites until they move out, as the 400-metre rule doesn’t apply to them.

“They were allowed to proliferate and go where they want,” she said. “They know who their market is: people who are desperate for that short-term loan. It is, in fact, predatory.”

Metro’s data also uncovered that roughly 78 per cent (39 of 50) of payday loan shops are operating in postal codes where the median family income is less than $97,390, which is the average median household income in Alberta.

Metro received the median family income levels per postal code from Statistics Canada. The number of stores was verified through company websites.

Solving the vicious cycle of payday-loan debt

The likely closure of some payday loan stores in Calgary won’t cure cash-goers debt problems overnight, but the government hopes new payday-loan like programs and lower payback rates will soften the blow.

Service Alberta Minister Stephanie McLean says it’s very likely some payday loan stores will close due to the government’s new law, considering the clustering of cash shops in poorer neighbourhoods has become a problem.

“Their model needs to be viable in the community and, as it stands, it’s not a viable structure because the community doesn’t want to be gouged at 600 per cent,” she said.

Tony Irwin, president of the Canadian Payday Loan Association, says the industry has taken a further hit due to the province’s lacklustre economy because people can’t take out a loan if they don’t have an income.  

Irwin has also suggested people who require payday loans will be forced to go underground to make ends meet.

But the solution to that, in part, is the new payday-loan-like programs offered by credit unions like First Calgary and Servus, according to McLean.

The closure of payday loan stores could also result in the revitalization on 17 Avenue SE, according to International Avenue Executive Director Alison Karim-McSwiney.

She said payday loan sites have artificially increased rents on 17 Avenue because they offer a higher price to landlords.

Coun. Andre Chabot, who represents Calgary’s poorest postal code, said he anticipates it’ll take two years to see how city and provincial legislation will help people escape the cycle of payday loan debt.

“This would all be pointless if we didn’t provide alternatives,” he said. “I think everyone is on side so that people have alternatives that are costly that put them into the vicious cycle of debt.”

City and provincial regulations 


The provincial law will reduce fees on payday loans to $15 per $100 borrowed, down from the current $23 per $100 borrowed, bringing it to the lowest rate in Canada. The law also forces companies to include financial literacy information and require instalment plans. It’s also made it easier for financial institutions to create payday-loan-like programs at lower rates and extended payback schedules. 


In late June, city councillors approved stricter regulations on Calgary’s payday loan industry, where operators must apply for business licenses and post information and alternatives for those seeking quick cash. It also requires new payday loan companies to open at least 400 metres away from an existing store to prohibit clustering.

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