Order Fixing July 4, 2022 as the Day on which Certain Provisions of Division 17 of Part 4 of the Budget Implementation Act, 2021, No. 1 Come into Force: SI/2022-33
Canada Gazette, Part II, Volume 156, Number 14
SI/2022-33 July 6, 2022
BUDGET IMPLEMENTATION ACT, 2021, NO. 1
Order Fixing July 4, 2022 as the Day on which Certain Provisions of Division 17 of Part 4 of the Budget Implementation Act, 2021, No. 1 Come into Force
P.C. 2022-816 June 24, 2022
Her Excellency the Governor General in Council, on the recommendation of the Minister of State (Small Business), under section 208 of the Budget Implementation Act, 2021, No. 1, chapter 23 of the Statutes of Canada, 2021, fixes July 4, 2022 as the day on which Division 17 of Part 4 of that Act comes into force, other than subsections 204(2) and (3) and 206(1).
(This note is not part of the Order.)
This Order in Council fixes July 4, 2022, as the day on which subsection 204(1), section 205, subsection 206(2), and section 207 of the Budget Implementation Act, 2021, No. 1 (BIA) to amend the Canada Small Business Financing Act come into force.
The objective is to enact certain amendments to the Canada Small Business Financing Act (CSBFA) to align with the coming into force of the Regulations Amending the Canada Small Business Financing Regulations. The legislative and regulatory amendments are to come into force on the same day to avoid any potential delays in offering the enhanced financing options to Canadian small businesses.
Budget 2021 announced proposed enhancements to the Canada Small Business Financing Program (the Program) in order to better meet the changing needs of Canadian businesses. The enhancements include the introduction of a $150,000 line of credit financing product, the expansion of loan class eligibility to include intangible assets and working capital, an increase to the maximum loan amount from $350,000 to $500,000 and the loan coverage period from 10 to 15 years for equipment and leasehold improvement loans, and the expansion of borrower eligibility to include not-for-profit and charitable social enterprises.
The BIA received Royal Assent on June 29, 2021, and brought into force an amendment to the CSBFA to expand borrower eligibility to include not-for-profit and charitable social enterprises. It also set out the remaining legislative amendments, to be brought into force at a later date by Order in Council, to include a line of credit in the definition of a loan; establish the overall maximum loan amounts for loan products and loan classes; and establish liability limits for lenders term loans and lines of credit. Regulatory amendments are required for all the remaining changes, which have been developed and are prescribed in the Regulations Amending the Canada Small Business Financing Regulations.
The legislation amendments come into force on July 4, 2022, and along with the regulatory amendments, will modernize the Program to better enable Canadian small businesses to access the type and amount of financing they need to start up and grow in a digital economy and to recover following the COVID-19 pandemic. Specifically, the legislative and regulatory amendments are expected to contribute $560 million in new annual lending, which will benefit the economy and the business community.
Innovation, Science and Economic Development Canada (ISED) has conducted extensive consultations with stakeholders regarding the proposed changes over the last several years. During these discussions, many lenders indicated that the ability to offer financing for additional business assets, such as intangibles and working capital costs, larger loan amounts, and a flexible financing product, such as a line of credit, would be welcome changes to the program. These consultations informed the recommendations for future directions in the Canada Small Business Financing Act Comprehensive Review Report (2014-2019) that was tabled in both Houses of Parliament in fall 2020 and the subsequent changes announced in Budget 2021.
Following Budget 2021, ISED has received correspondence from financial institutions and industry organizations expressing their support for the proposed program changes and stressing the importance of bringing them into force as soon as possible to help small businesses, particularly following the COVID-19 pandemic. Financial institutions have stressed the importance of having these changes come into force quickly as it may take them a few months to update their system procedures and they cannot begin this process until the changes are approved. In order to implement the announced changes, the legislative changes, along with a separate regulatory amendment package, need to be brought into force.
In April 2022, the regulatory amendments were prepublished in the Canada Gazette, Part I, for a 30-day comment period, which closed on May 2, 2022. These legislative changes and regulatory changes will come into force on the same day.
Small Business Branch
Innovation, Science and Economic Development Canada