Procedure and House Affairs committee  Or a response might be “This is administratively cumbersome. It is expensive. The cost of that will be reflected in the cost of the loan.” Ultimately the borrower will pay for that. There are couple of ways an institution can react to that.

Procedure and House Affairs committee  We can't predict what an individual institution will do in a particular circumstance. As I said before, institutions do not want to lose money on loans. At the same time, they do not want to pass up the opportunity to make money on loans. If there are ways in which they can recov

Procedure and House Affairs committee  You are asking a very specific question about how the process would work in a bank, and we're not qualified to answer the details of that question.

Procedure and House Affairs committee  If you look at the options available to businesses, they extend far beyond that right now.

Procedure and House Affairs committee  We were talking about lending to the non-profit sector. It's up to an individual institution to determine what interest rate it charges to individual customers and non-profits. Financial institutions, banks, make loans to those they expect can repay them. The question was referr

Procedure and House Affairs committee  My understanding is that when there is an obligation to repay, which is the case when financial institutions make a loan, should that default, it is not a deemed contribution. Is that correct?

Procedure and House Affairs committee  Of course.

Procedure and House Affairs committee  That's the whole essence, Mr. Chair, of the issue around the guarantors. These are relatively small loans; they are over a very short period of time. The costs associated with that up front are quite high, which would then be passed on to the borrower. It's more than just giving

Procedure and House Affairs committee  You're right, it's a small loan. The administrative costs of small loans are relatively high. It's up to each institution within its own context to determine whether or not that is a loan that can be viable.

Procedure and House Affairs committee  I think that's a good question. These are relatively small loans. A small loan can be a profitable loan. It depends on the administrative costs associated with it. It depends on the ease with which the institution can assess risk and the ability to charge the appropriate interest

Procedure and House Affairs committee  Some may.

Procedure and House Affairs committee  Banks do lend to non-profit organizations and they do have within their organizations individuals who specialize. A part of their business is to lend to non-profit organizations. I think they recognize the differences in a non-profit organization versus a profit-making organizat

Procedure and House Affairs committee  That's how hard that question is.

Procedure and House Affairs committee  In answer to the question, Mr. Chair, every institution works under a broad risk management framework that's set by the Superintendent of Financial Institutions, but how they actually do that internally is up to the institution. I keep making analogies to business and households

Procedure and House Affairs committee  First of all, Mr. Chair, remember that when banks make loans—let's say they're making business loans—they are effectively making a judgment about the viability of the business. Sometimes they have security, sometimes they have a business plan, and sometimes they have a track reco