Change to the interest charged on overdue Crown charges under the Crown Forest Sustainability Act
Regulation - LGIC
Bill or Act:
Crown Forest Sustainability Act
Summary of Decision:
The new interest rate charged on overdue Crown charges is computed quarterly (April 1, July 1, October 1, January 1), and represents a base rate + 3%. The base rate is calculated by taking the average prime rate of the five major banks, 2 ½ months prior (January 15, April 15, July 15, October 15), rounded to the nearest percentage, plus 3%.
While the prime interest rate remains low (i.e., 5.5% as of April 2006), forest companies will be charged a lower interest rate (i.e., 9% per annum vs. 12%) on overdue Crown charges.
The variable rate of prime plus 3% is consistent with the interest rate charged under other Ontario government legislation (e.g., Corporations Tax Act, Retail Sales Tax Act, Fuel Tax Act).
September 6, 2006
Summary of Proposal:
A change to the interest rate charged on overdue Crown charges was proposed by MNR to establish a more current and fair rate that is responsive to market conditions and supports the government's initiatives to improve the forest industry's competitive position. This change was approved.
MNR submitted this item for approval to update the interest rate being charged from the rate of 1% per month which was established at least 28 years ago.
Vivienne Scott, Acting Manager
MNR Industry Relations Branch
70 Foster Drive Suite 400
Sault Ste. Marie, Ontario, P6A 6V5
PHONE: (705) 945-6675 FAX: (705) 945-6667
July 1, 2006