Bulletin — July 2010

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Printable version: Second Comprehensive Review (PDF Format 85 KB)

Second Comprehensive Review

The second comprehensive review report of the CSBF Program examined the 2004–2009 lending period and was tabled in Parliament on April 26, 2010. The purpose of the review was to examine the CSBF Program's success in facilitating small business' access to financing, measure how the program has achieved its two objectives of incrementality and cost recovery and consider possible program improvements. The key findings were as follows:

Program Rationale

  • There is an ongoing need for facilitated access to asset-based debt financing for small businesses, particularly for start-ups and businesses operating in higher risk sectors.
  • Lenders believe that the CSBF Program does indeed make financing available to firms that would otherwise be denied.
  • The recent downturn in the global economy has increased the importance of programs such as the CSBF Program.

Program Activity and Benefits

  • Loans made under the CSBF Program were highly incremental:
    • About 54 percent of CSBF loans went to new or start-up firms;
    • 80 to 85 percent of the loans were financially incremental (i.e., they would not have been made or have been made for a lesser amount or under less favourable conditions).
  • The CSBF Program loans delivered major economic benefits for borrowers, including:
    • Higher levels of sales growth than for non-CSBF Program borrowers
    • Higher employment growth than other firms;
    • Higher investment growth than the comparison group;
    • Higher average and total sales growth than their peers;
    • Slightly higher business survival rates than for non-borrowers.
  • The CSBF Program resulted in significant benefits to Canadian society. From 1999–2008, total costs of the program were estimated to be $728.5 million whereas total benefits were $5598.2 million, resulting in total net benefits of $4869.7 million. These benefits have been realized throughout Canada.

Cost Recovery

While the program is not fully cost-recoverable when strictly using revenues from the administration and registration fees it charges, it is cost-recoverable when additional federal income taxes and GST remittances from CSBF borrowers are considered. Since 1999–2000, as well as the benefits mentioned above, additional federal income tax remittances resulting from incremental salaries and wages being paid by CSBF Program firms averaged $39 million each fiscal year while GST remittances averaged $24 million annually.

Program Administration

A number of regulatory and non-regulatory measures have been implemented since the 2004 CSBF Program Comprehensive Review Report, in an effort to simplify delivery functions, improve communications with lenders and decrease administrative burden. However, lenders continue to cite a lack of profitability and continued administrative burden as the key barriers to program usage. The CSBF Program needs to strengthen stakeholder relations and develop a package of changes aimed at addressing lenders' stakeholder concerns and modernizing the CSBF Program, thereby securing its continued success. The Government of Canada recognizes the need for these changes. It is committed to making modifications that would strengthen and modernize the Program thereby securing its continued success.

The comprehensive report is available on our website at Comprehensive Review Report (2004–09). The evaluation report is available also on our website at Evaluation of the CSBF Program.

Subscription Service

The CSBF Program has an on-line subscription service which will send you the CSBFP Bulletin and other information via email. If you would like to receive the Bulletin, we invite you to visit the Subscription Service page of our website.

Canada Small Business Financing Program 
Fax: 613-952-0290 
Info Line: 1-866-959-1699 
E-mail: csbfp-pfpec@ic.gc.ca 
URL: www.ic.gc.ca/csbfp