Marginal note:Liability of Minister

• 5. (1) Subject to subsection (2), the Minister is liable to pay a lender any eligible loss, calculated in accordance with the regulations, sustained by it as a result of a loan in respect of which the requirements set out in this Act and the regulations have been satisfied.

• Marginal note:Termination of liability

  (2) The Minister may, with the approval of the Governor in Council, give notice to a lender of the termination of the Minister’s liability in respect of loans of a prescribed class or of any prescribed classes made by the lender on or after the date set out in the notice.

• Marginal note:When notice to be given

  (3) A notice under subsection (2) is not effective unless the date set out in the notice is at least twenty-four hours after receipt of the notice at the head office of the lender.

Marginal note:Program liability ceiling

• 6. (1) The Minister is not liable to make any payment to a lender in respect of a loss sustained by it as a result of a loan once the Minister’s aggregate contingent liability in respect of the aggregate principal amount of the loans made by all lenders and registered by the Minister during each consecutive five-year period, starting with the period beginning on April 1, 1999, exceeds $1.5 billion or any other amount that is provided by an appropriation Act or another Act of Parliament.

• Marginal note:Limitation of liability in respect of each lender

  (2) The liability of the Minister to make any payment to a lender in respect of losses sustained by it as a result of loans made by it and registered by the Minister during each consecutive five-year period, starting with the period beginning on April 1, 1999, is limited to the total of

  • (a) 90%, or any prescribed lesser percentage, of that part of the aggregate principal amount of the loans made by it during that period that does not exceed $250,000,

  • (b) 50%, or any prescribed lesser percentage, of that part of the aggregate principal amount of the loans made by it during that period that exceeds $250,000 but does not exceed $500,000,

  • (c) 10%, or any prescribed lesser percentage, of that part of the aggregate principal amount of the loans made by it before April 1, 2009 that exceeds $500,000, and

  • (d) 12%, or any prescribed lesser percentage, of that part of the aggregate principal amount of the loans made by it after March 31, 2009 that exceeds $500,000.

Marginal note:Maximum loan size

• 7. (1) The Minister is not liable to make any payment to a lender, in respect of any loss sustained by it as a result of a loan made to a borrower, if the borrower has disclosed to the lender the outstanding amount of the loan or the lender has actual knowledge of that amount and if the outstanding loan amount in relation to the borrower is more than

  • (a) in the case of a loan made before April 1, 2009, $250,000 or any prescribed lesser amount; and

  • (b) in the case of a loan made after March 31, 2009, $500,000 or any prescribed lesser amount, of which a maximum of $350,000 or any prescribed lesser amount is for a purpose other than the purchase or improvement of real property or immovables of which the borrower is or will become the owner.

• Marginal note:Meaning of outstanding loan amount

  (2) The outstanding loan amount referred to in subsection (1) is the aggregate principal amount outstanding, in respect of the borrower and all borrowers that are related to that borrower within the meaning of the regulations, at the time the loan is made, of all loans made under this Act and guaranteed business improvement loans made under the Small Business Loans Act.