Ministerial recommenda-
tion

(2) Regulations under paragraph (1)(j) shall be made on the recommendation of the Minister and the Minister of Finance.

AUDIT OR EXAMINATION

Minister's powers

15. (1) The Minister may, on giving notice in writing to a lender, conduct an audit or examination of the lender's documents, records and books of account to verify that this Act and the regulations are being complied with in respect of a loan, including that the lender has exercised due diligence, as provided in the regulations, in the approval and administration of the loan and that the documentation submitted to the Minister in respect of the borrower is accurate and complete.

Records to be made available

(2) Documents, records and books of account shall, for the purposes of the audit or examination, be made available at all reasonable times to any person authorized by the Minister for the purpose.

Assisting authorized persons

(3) Every lender shall, for the purpose of an audit or examination under this Act, give all reasonable assistance to any person authorized by the Minister to carry out the audit or examination, provide access to all relevant sites, answer, orally or in writing, as required, all questions relating to the subject-matter of the audit or examination and provide all information and documentation in their possession and all copies required for the purpose of the audit or examination.

Non-
compliance

(4) Where a lender does not submit to an audit or examination under this section or refuses or knowingly fails to comply with any other requirement of this section, the Minister may notify the lender in writing that the Minister is not liable under this Act to make any payment to the lender in respect of any loss sustained by it as a result of any loan made by it.

OFFENCES AND PUNISHMENT

Offence

16. (1) Every person commits an offence who, in respect of a loan,

    (a) knowingly makes any false statement or misrepresentation in an application, report or other document or wilfully furnishes any false or misleading information;

    (b) being a borrower, without the consent of the lender and with fraudulent intent, disposes of any assets taken as security for the loan where the disposition is not permitted by the regulations; or

    (c) being a borrower, uses the proceeds of the loan, with fraudulent intent, for a purpose that does not fall within the scope of any prescribed class of loans.

Punishment

(2) Every person who commits an offence under subsection (1)

    (a) is guilty of an indictable offence and liable to a fine not exceeding $500,000 or to imprisonment for a term not exceeding five years or to both; or

    (b) is guilty of an offence punishable on summary conviction and liable to a fine not exceeding $50,000 or to imprisonment for a term not exceeding six months or to both.

Limitation period

(3) Any proceedings by way of summary conviction in respect of an offence under subsection (1) may be instituted at any time within but not later than three years after the time when the subject-matter of the proceedings arose.

GENERAL

Payment out of C.R.F.

17. Any amount payable by the Minister to a lender under this Act is to be paid out of the Consolidated Revenue Fund.

Annual report

18. The Minister shall, within twelve months after the end of each fiscal year, cause a report on the administration of this Act during the preceding fiscal year to be made.

Five-year review

19. The Minister shall, within twelve months after March 31, 2004 and every five years after that, cause a comprehensive review and report of the provisions and operation of this Act during the preceding five years to be made.

Laying of reports before Parliament

20. The Minister shall cause a copy of each report referred to in sections 18 and 19 to be laid before each House of Parliament on any of the first fifteen days on which that House is sitting after the day on which the report is made.

CONSEQUENTIAL AMENDMENT

1991, c. 46

Bank Act

1993, c. 6, s. 6(E)

21. Subparagraph 427(1)(m)(v) of the Bank Act is replaced by the following:

      (v) any works for the improvement or development of an aquaculture operation for which a loan, as defined in the Canada Small Business Financing Act , a business improvement loan, as defined in the Small Business Loans Act, or a farm improvement loan, as defined in the Farm Improvement Loans Act, may be made,

REPEAL

Repeal of R.S., c. S-11

22. The Small Business Loans Act is repealed on March 31, 1999.