On some further research, I may not be entirely right on my previous assumption that shares in an account cannot be loaned out without consent of the owner.I am not sure if this line posted below is current or even Canadian regulations.

Retail customers' account statements do not distinguish between real shares and share entitlements.

If this is the case, anyone that does not have the actual share certificates, could be known as not actually owning the stock. If they do not actually own the stock, they only have a share entitlement, then couldn,t your broker loan these shares out to the shorter.

Correct me if I am wrong, but maybe the consent form that was signed, not allowing your broker to lend your shares, ONLY APPLIES IF YOU ARE IN RECIEPT OF THE ACTUAL SHARE CERTIFICATES. If this is the case, wouldn,t it be prudent in this case if long shareholders were to take actual share certificates of their SLI holdings?