Finance committee  We request very specific documentation from financial institutions about where the money is going and for what purposes it is being used. Right now the three asset classes are real property, equipment and leasehold improvements. We're looking to expand those asset classes, but when they submit a claim for loss now on term loans, etc., we require specific documentation that supports proof of purchase and payment for those asset classes.

Finance committee  That's possibly the case; however, it requires a lot more administration for the financial institution to use this program than to use their conventional resorts. In addition, we charge a 2% registration fee up front based on the value of a loan. If you get a $1-million real property loan, there's a 2% registration fee sent in automatically, and on an annual basis there's a 1.25% administration fee that we charge the financial institution, which lowers their profitability.

Finance committee  Yes.

Finance committee  No. It's the financial institution's money.

Finance committee  It has remained the same to a large extent. We are on track and it's business as usual. That said, we certainly realize and are planning for higher than expected losses. One of the big beneficiaries of this program is in the accommodation and food and beverage services sector. As you know, those guys have been the hardest hit, so we're expecting quite a number of claims to come in.

Finance committee  We facilitate it. It's a loan guarantee program, so it's their money. It's giving out dollars that would otherwise not be available in the absence of the program.

Finance committee  I'm not 100% sure on the numbers, but I do know it's an optional personal guarantee that the financial institution can ask of the small business borrower. It's not a mandatory requirement of the program. I think it's an individual financial institution requirement and decision, and I think it depends on a case-by-case basis.

Finance committee  The way it works is this. I'll give you an example. They register the loan with us. If the loan goes into default, they have to realize on all the assets to minimize the loss and maximize the recoveries. Then they have to realize on the personal guarantees. Let's just say, for example, it was a $500,000 initial loan, and it goes into default right away.

Finance committee  —we cover 85% of the eligible loss.

Finance committee  Yes, 85% is covered by the government, after the financial institutions realize on the securities and the assets that were financed and any personal guarantees. They submit their net losses to us, and then—

Finance committee  Fifteen per cent.

Finance committee  Oh, what percentage would that be? I would imagine about 65% to 70% of them would go through the major chartered banks; probably about 20% to the Fédération des caisses populaires, and maybe the rest through the various credit unions across the country and the smaller chartered banks.

Finance committee  Yes. The program came into existence in 1999 and replaced the small business financing program. It's certainly since 1999, and before that as well.

Finance committee  On default rates, I would make the distinction between a default rate and a loss rate, default being the number of loans that default—

Finance committee  —and loss rate being the value of money. The default rates are traditionally at about 11% to 13% in number. On the loss rate, it's usually between 6% and 8% on the value overall. You need to take into consideration, too, that there are revenue streams that come in on this program as well.