Liability of Minister (continued)
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;
(b) in the case of a loan made after March 31, 2009 but before the day on which paragraph (c) comes into force, $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; and
(c) in the case of a loan made on or after the day on which this paragraph comes into force, $1,000,000 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.
- 1998, c. 36, s. 7
- 2009, c. 2, s. 267
- 2015, c. 36, s. 163
Marginal note:Loss-sharing ratio
8 The liability of the Minister in respect of losses sustained by a lender as a result of a loan made by it is limited to the lesser of
(a) 85%, or any prescribed lesser percentage, of its eligible loss, calculated in accordance with the regulations, and
(b) a prescribed maximum amount.
Marginal note:Other limitations — registration fee, etc.
9 (1) Subject to the regulations, 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 by it unless the lender has, in respect of that loan,
Marginal note:Other limitations — annual administration fee
(2) 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 by it unless the lender has, in respect of all loans made by it, paid to the Minister the annual administration fee in accordance with section 12.
Fees and Charges
Marginal note:Condition re: fees and charges
10 Every loan is subject to the condition that no fee or charge is payable by a borrower in respect of the loan other than
(b) the registration fee; and
(c) any other prescribed fee or charge that is specified in the regulations as being payable by the borrower.
Marginal note:Registration fee
11 Every lender shall pay to the Minister, at the time a loan made by that lender is submitted for registration, a registration fee of an amount calculated in accordance with the regulations in respect of the loan. The registration fee may be charged by the lender to the borrower.
Marginal note:Annual administration fee
12 Every lender shall, in accordance with the terms and conditions set out in the regulations, pay to the Minister, in respect of a loan, an annual administration fee of an amount calculated in accordance with the regulations. The lender may not charge the borrower for that fee otherwise than through the imposition of interest in respect of the loan.
13 (1) Notwithstanding anything in this Act, the Governor in Council may, on the recommendation of the Minister, make any regulations that the Governor in Council considers necessary respecting the establishment and operation of one or more pilot projects for testing whether to guarantee loans made to borrowers in the voluntary sector or capital leases and to determine the legislative and regulatory measures required to do so.
Marginal note:Program liability ceiling
(2) The Minister’s maximum aggregate contingent liability in respect of a pilot project may be established by an appropriation Act or another Act of Parliament.
Marginal note:Maximum duration of pilot projects
(3) Subject to subsection (4), regulations made under subsection (1) have a maximum duration of five years from the time they come into force.
Marginal note:Extension of regulations
(4) If, as a result of a pilot project referred to in subsection (1), the Minister decides to guarantee loans made to borrowers in the voluntary sector or capital leases, the Minister shall cause to be published in the Canada Gazette a notice of that decision and the regulations made under that subsection in relation to that pilot project will continue to have effect until the earlier of
Marginal note:Tabling of proposed regulations
(5) The Minister shall cause a copy of each regulation proposed to be made under subsection (1) to be laid before each House of Parliament before it is made and that House shall refer the proposed regulations to the appropriate Committee of each House.
14 (1) The Governor in Council may, subject to subsection (2), on the recommendation of the Minister, make regulations for carrying out the purposes and provisions of this Act and, without limiting the generality of the foregoing, may make regulations
(a) authorizing the Minister to designate organizations as lenders;
(b) prescribing classes of loans;
(c) respecting loan application, loan registration and claims forms, including the information to be included in such forms;
(d) respecting the further conditions for eligibility referred to in subsection 4(1);
(e) respecting limits referred to in paragraph 4(1)(d);
(f) respecting eligibility criteria for borrowers;
(g) respecting the calculation of eligible loss;
(h) respecting the extent of the Minister’s liability in respect of a loan where certain provisions of this Act or the regulations have not been complied with, including prescribing conditions that may be attached to that liability;
(i) respecting the making of loans, including loan approval, maximum loan terms, repayment requirements and security requirements, including guarantees and suretyships;
(j) respecting the maximum rates of interest payable in respect of a loan;
(k) respecting the registration and administration of loans, including in respect of default, recovery, claims for loss by lenders and payment of claims by the Minister, including interim claim payments;
(l) authorizing the Minister to extend the prescribed period within which a claim may be submitted;
(m) respecting registration and annual administration fees that are payable under this Act, including prescribing their calculation and payment, including the time when and the manner in which the fees and charges shall be paid, the additional fees that may be charged for the late payment of the fees and charges, the refunding of fees and charges and the circumstances in which any fees and charges previously paid may be refunded in whole or in part;
(n) respecting fees and charges, including insurance premiums and charges for putting security in place, that are payable by the borrower;
(o) respecting audits and examinations;
(p) respecting the submission of documents, information, reports, fees and charges;
(q) respecting documents, information, records and books of account to be kept by lenders;
(r) respecting documents, information and reports to be provided under this Act;
(s) providing for the acquisition, assumption, transfer or assignment of loans, including the attachment of terms and conditions to those acts and the adjustment of the Minister’s liability;
(t) respecting, in the case of an amalgamation of lenders, the adjustment of the Minister’s liability in respect of loans made by those lenders;
(u) respecting the subrogation of Her Majesty in the rights of a lender with respect to a loan;
(v) respecting the meaning of “related” for the purposes of subsections 4(3) and 7(2); and
(w) prescribing anything that by this Act is to be prescribed.
Marginal note:Ministerial recommendation
(2) Regulations under paragraph (1)(j) shall be made on the recommendation of the Minister and the Minister of Finance.
Marginal note:Tabling of proposed regulations
(3) The Minister shall cause a copy of each regulation proposed to be made under subsection (1) to be laid before each House of Parliament before it is made and that House shall refer the proposed regulations to the appropriate Committee of each House.
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