Canada Small Business Financing Act
Annual Report 2010–2011

4. The Crown's Program Liability

Maximum liability: The Canada Small Business Financing Act establishes a $1.5-billion liability ceiling for each five-year lending period. The Government of Canada's payments with respect to all loans registered under the program, for each lending period, is limited to the sum of the liability to each lender, capped by the 90–50–12 (or 10) formula as described in Section 2 "Program Requirements."

Contingent liability: This liability is calculated as the lower of the maximum liability less claims paid to lenders and 85 percent of the outstanding loan balance amount. This would represent the maximum amount of money that the government may have to pay to lenders if all outstanding loans were to default simultaneously as at March 31, 2011.

The table below summarizes the maximum and contingent liabilities for each five-year lending period as at March 31, 2011.

Maximum and Contingent Liabilities for Each Five-Year Lending Period as at March 31, 2011

Fiscal Years	Maximum Liability ($000)	Contingent Liability ($000)
1999–2004	683 005.5	81 432.2
2004–09	654 546.7	272 122.5
2009–11	341 148.6	334 420.4

Cost recovery: The CSBF Program generates fees by means of a 2-percent registration fee and a 1.25-percent annual administration fee paid on the loans. These fees are meant to offset the claims paid on loans. They do not cover the operating expenses for the program.

The table below is a summary of the revenues and expenses for each lending period as at March 31, 2011.

Revenue and Expense Summary by Lending Period as at March 31, 2011

Fiscal Years	Revenues ($000)	Expenses ($000)	Cumulative Revenues and Expenses ($000)
1999–2004	289 264.6	416 472.3	(127 207.7)
2004–09	247 969.0	388 852.4	(140 883.4)
2009–11	60 426.0	9 983.8	50 442.2

Details of the revenue and claim expenses on a year-by-year basis are outlined in Tables 8a, 8b and 8c in the Appendix. An analysis of cost recovery and the economic benefits delivered by the CSBF Program can be found in the Comprehensive Review Report for 2004–09 (see Section 6 "Second Comprehensive Review").