Beginning August 1, Quebec will require all credit card holders—including those with accounts opened before August 2019—to pay at least 5% of their outstanding balance every month. While this policy may appear to address rising consumer debt, it also underscores a deeper problem: a heavily indebted government imposing policies that harm its own citizens and private sector.
Government Intervention and the Private Sector
Instead of allowing defaults and bankruptcies to occur naturally within the private credit system, Quebec’s government has chosen to legislate repayment terms.
For business owners, credit cards are often a tool for managing cash flow. Minimum payments allow businesses to borrow, invest in equipment, and plan repayments over several months. By forcing a 5% repayment rate, the province risks triggering unnecessary financial stress or bankruptcies, particularly for small entrepreneurs who depend on revolving credit.
This policy, critics argue, reflects the narrow perspective of a government that itself relies on massive borrowing to survive.
Why Governments Should Avoid Debt
Quebec is a “have-not” province that runs on federal transfer payments and has long struggled to fund its public sector without borrowing. Yet, rather than manage its own books, the province now dictates how its citizens must handle private debt.
Governments that operate in chronic deficit tend to impose blanket solutions without appreciating the diversity of personal financial strategies—especially those used by small businesses.
The Nature of Revolving Credit
Unlike fixed loans, revolving credit such as credit cards is flexible. Business owners may use this flexibility to make large purchases, with the intention of repaying over several months. Forcing a 5% repayment schedule eliminates much of this flexibility.
Consumers already have options to manage debt responsibly:
- Make regular minimum payments.
- Consolidate or refinance high-interest debt.
- Declare bankruptcy if repayment becomes impossible.
Heavy-handed legislation interferes with these private financial mechanisms.
Root Causes of Consumer Debt
The primary driver of consumer debt is not irresponsibility but cost of living—made worse by government regulations, high taxes, and public-sector inflation.
In a truly competitive free market:
- Prices of goods and services should fall over time as efficiency improves.
- Credit card companies would compete on terms, giving consumers better options.
Instead, regulatory monopolies and labor union pressures drive prices up, while the government passes new rules that further burden individuals and entrepreneurs.
Quebec’s Rationale: The 5% Rule
The new law applies to all credit cards:
- For older accounts (before 2019), the minimum gradually increased from 2% to 4.5%, and now to 5%.
- Newer accounts already require 5%.
Quebec’s Office of Consumer Protection argues this is to help consumers repay debt faster. Studies suggest that higher minimums shorten repayment periods, but they can also increase financial strain and delinquency rates, particularly in a province where wages and private investment lag.
National Implications
This move could inspire similar credit card reforms across Canada, as policymakers seek to reduce national household debt, which currently sits at over 185% of disposable income—the highest in the G7.
While this may benefit some heavily indebted consumers, it will hurt those who rely on flexibility, such as small businesses, gig workers, and individuals already facing cash flow challenges.
The Christian Perspective on Debt and Governance
As Christians, we know that God gives freedom and choice, not compulsion.
Scripture teaches:
“The borrower is servant to the lender.”
—Proverbs 22:7 (NIV)
Healthy financial relationships depend on voluntary agreements between lender and borrower, guided by fairness and personal responsibility—not by government decree. When governments themselves live in perpetual debt, they often try to control citizens rather than reform their own mismanagement.
Instead of punishing citizens, governments should focus on creating an environment for business growth and innovation, which reduces the need for excessive borrowing in the first place.
Conclusion
Quebec’s mandatory 5% minimum payment law is a clear example of an indebted government trying to impose financial discipline on its citizens while ignoring its own fiscal failures.
Rather than fostering innovation, entrepreneurship, and freedom, such policies tighten the screws on small business owners and households already struggling with high costs of living.
Consider making Jesus Christ your Lord and Savior today. A society rooted in biblical wisdom—responsibility, stewardship, and justice—is far healthier than one run by debt-ridden bureaucracies making short-sighted decisions.
