Mr. Speaker, for those who may not know, the city of Joliette, for which my riding is named, was established after Barthélemy Joliette built a mill on the bank of the L'Assomption River. At that time, the city was named L'industrie, which cleary shows the importance of entrepreneurship for our regional county municipality and for the northern Lanaudière region.
I already knew that before I was elected in 2015, when my riding was booming both socially and economically. However, I have heard from many entrepreneurs about how difficult it is to transfer their business to their children, since it is less profitable than selling it to a stranger. That is unbelievable. The Bloc Québécois and I are obviously in favour of Bill C-208. We have been working on this issue for many years. In fact, my colleague from Pierre-Boucher—Les Patriotes—Verchères introduced a similar bill in the previous Parliament.
If this bill were to pass, it would have a very significant impact on Quebec. Nearly one-third of Quebec's SMEs were buy-outs, whereas that number is one-quarter for Canadian businesses. According to Marc Duhamel, a professor at Université du Québec à Trois-Rivières, the rate of business buy-outs in rural areas is around 45%. Helping the next generation of business owners would be good for Quebec, and when something is good for Quebec, the Bloc Québécois votes in favour of it.
I also know that these changes will be good for my region. My riding has numerous farms in practically every one of its municipalities, including places like Saint-Thomas, Rawdon and Saint-Ambroise. We all know a farmer, and we are proud to support our local producers in our farmers' markets, grocery stores and even the little stands we see on pretty much every major roadway.
Right now, the crux of the issue is that a business transferred to a family member is treated as a dividend, not a capital gain, unlike a business sold to someone at arm's length. People who want to sell their small or medium-sized business or their farm or fishing operation to their children are not entitled to the lifetime capital gains exemption, but if they sell to a third party, they are.
I get that the government wants to prevent potential fraud and tax avoidance, but this situation complicates the lives of everyone who genuinely wants to take over the family business. This is like asking people to slow down to 80 kilometres per hour because some people are speeding along at over 130 kilometres per hour. The government should fix this situation by allowing transfers to family members. If a transaction is fraudulent, the government can investigate it, kind of like how a police officer would ticket someone speeding on Highway 50, but would let everyone who obeys the speed limit carry on.
Speaking of tax avoidance, there are other much more concerning cases. Here are three examples the government should tackle. First, the government should immediately start taxing web giants doing business in Quebec and Canada. Second, web giants' digital services should be subject to GST. Quebec already collects QST from them. These two measures have been announced, but they should be implemented right away. Third, the government should shut down the tax haven loophole. That was my goal in 2016 with Motion No. 42.
This is a serious problem, and many people in my riding are suffering as a result. Year after year, I meet entrepreneurs who are looking for someone, the next generation, a young person, to take over the family business. Rather than taking examples from my own family, among my uncles, aunts and cousins, let me give an example that illustrates how ridiculous this situation is. I will tell you about Charles, who went to high school with my assistant.
I have met Charles a number of times since my first election campaign in 2015. Ever since he was old enough to work, Charles has been toiling in his family business, a great sound, multimedia and lighting services company, the kind you often see at festivals, fundraisers and community events in the Lanaudière region and beyond. Not too long ago, Charles and his business partner bought the company. However, the family member who owned the business would have been better off selling it only to the partner, who was already working for the business, rather than including his own son in the transaction. How is that right?
Another incongruity has to do with selling to a competitor, which would actually be more profitable than selling to the next generation, the ones who know the distributors, the customers, the activities and the local reality. This would reduce competition in the sector, possibly increase the price of services and cause the loss of local expertise.
Unlike many other businesses that have no choice but to close up shop because of tax regulations, that SME was able to keep running back home in Joliette. If I open my curtains, I can see it from my window. I could talk at length about the problems facing this industry and even more so now because of the wide-scale cancellation of activities. However, that is not what this bill is about.
I would point out that the Canadian Federation of Independent Business, the CFIB, would like to see this bill pass, which is only natural.
There are many reasons we need to keep these SMEs in the hands of the next generation. First, this would allow several regions to develop their industry. We need to fix this problem for all SMEs, but even more so for businesses in the fisheries and agricultural sectors. In Quebec and in the regions, fisheries and agriculture are among our biggest industries.
Things are looking rather bleak when it comes to the next generation taking the reins of SMEs in the future. Statistics show that in 2016, fewer than 25% of farms had secured a successor and that rate has remained the same since 2011.
Between 500 and 800 young farmers are taking over a farm each year, when in fact 1,000 are required to maintain the number of farms in Quebec. Roughly one farm a day is disappearing back home.
In the fisheries sector, there are three major obstacles to the acquisition of a business. Léa Richard, of the Comité sectoriel de main-d'œuvre des pêches maritimes, said the following:
...what is truly difficult for this next generation is access to financing, the transfer of licences and the administrative complexity. These are the three elements that make it difficult for the next generation to acquire a fishing business.
We know that it is already difficult to take over a business. It is that much more difficult in sectors that require a sizeable capital investment. For these people who have poured their heart and soul into their business, which most of the time represents their retirement nest egg, it seems unfair that it costs them an arm and a leg to sell their business to their children.
It is difficult for people to go into business and later to let go of what they have spent most of their life building. If we could at least make it easier for them to sell their business to a family member, that would be a good thing.
The government will probably remind us that we need to make choices and that this measure comes at a significant cost. In fact, the Parliamentary Budget Officer reviewed a similar bill in 2017 and estimated the cost at about $376 million. To put that in terms the Liberals will understand, that is equivalent to a little more than one-third of a contribution agreement with WE Charity, or about 40% more than the sole-source contract awarded to Frank Baylis.
This measure may be costly, but it is nothing considering how much the next generation could help business owners. Losing a business is hard on the owners, but the impact of that loss ripples beyond the owner and their loved ones. Suppliers, creditors, employees and customers lose an important partner. We often think about how the closure of a large company can have repercussions on a region, as was the case with Electrolux a few years ago in Assomption, near my riding. However, we rarely consider that the loss of multiple small businesses can have a less immediate but equally serious impact on the socio-economic fabric.
Ensuring the succession and continuity of SMEs is not only good for our economy and governments' fiscal capacity, but it is necessary for efficient land occupancy. From the North Shore to Abitibi, from Gaspé to Nunavik, Quebec has chosen to have vibrant regions, each with its own strengths, growth sectors and educational institutions, such as CEGEPs. According to Maripier Tremblay, an associate professor in the department of management in Université Laval's faculty of business administration, “Quebec's economy depends on its SMEs, but also on its regions. It is very important for businesses in the regions to retain their pools of workers.”
I will close by saying that to have strong regions, we need to have people living there. For the period from 2014 to 2023, the Board of Trade of Metropolitan Montreal estimates that between 79,000 and 140,000 jobs in our SMEs could be lost due to the entrepreneurial deficit. That is a gigantic number.
That is like one or two whole ridings of workers disappearing in 10 years. When many families leave a region, it has significant consequences for the entire ecosystem.