Subsections 347 (1) and (3) read as follows:

(1)  Despite any other Act of Parliament, every one who enters into an agreement or arrangement to receive interest at a criminal rate, or receives a payment or partial payment of interest at a criminal rate, is

(a)  guilty of an indictable offence and liable to imprisonment for a term not exceeding five years; …

(3)  Where a person receives a payment or partial payment of interest at a criminal rate, he shall, in the absence of evidence to the contrary, be deemed to have knowledge of the nature of the payment and that it was received at a criminal rate.

Section 347(1) of the Criminal Code creates two offences: (i) entering into an agreement or arrangement to receive interest at a criminal rate (the “agreeing offence”); and (ii) receiving a payment or partial payment of interest at a criminal rate (the “receiving offence”). 

The mens rea is knowledge, or its legal equivalent, wilful blindness, that the terms of the agreement call for an effective annual interest rate of over 60 percent. 

Under s. 347(2), “criminal rate” is defined as an effective annual rate of interest calculated in accordance with generally accepted actuarial practices and principles that exceeds 60 percent on the credit advanced under an agreement or arrangement.  As a result, effective annual rates of interest that are 60 percent or less when calculated in accordance with actuarial principles are not criminal rates of interest.

Whether an agreement or arrangement for credit is an agreement or arrangement to receive interest at a criminal rate should be narrowly construed and is determined as of the time the transaction is entered into. 

 

Section 347(3) deems a person to have knowledge where the person receives a payment or partial payment of interest at a criminal rate.  

R v Saikaley, 2017 ONCA 374 at paras 77-114