Industry Committee on Dec. 2nd, 2009

[Robert Vincent, Bloc, Shefford, QC]

Can you tell me if loans or loan guarantees will be provided to the forestry industry? There are many small companies in this industry. I would like to know what the government intends to do for small companies in the forestry industry.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Briefly, in the time we have, the committee will be aware that the government has brought in numerous programs to assist the forestry industry, including the CAF, the community adjustment fund, to assist communities whose forestry industry is receding or shrinking at this time. We found those programs to be helpful.

Representations continue to be made about what more can be done. Again, those are matters that will be taken under advisement in preparing budgets and in decisions by the Minister of Finance.

[The Vice-Chair, Liberal, Anthony Rota]

Thank you, Madam Minister.

Now we will go to Mr. Lake.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you, Mr. Chair, and thank you to the minister.

I will start by commending you, which shouldn't be surprising given that I am a colleague of yours, but I do hear from a lot of small business owners across the country who are very happy with the reduction in the small business tax rate and the increase in the threshold, which are very important, particularly the announcement about cutting the red tape—not only the announcement but obviously the efforts in that area.

In your opening remarks you outlined a number of programs that are designed to assist small and medium-sized enterprises in a variety of ways. I'm thinking now particularly of the global circumstance that we find ourselves in. Can you identify programs that have been the most significant to small and medium-sized companies in addressing this period of economic slowdown and maybe explain what it is particularly about those programs that are of particular benefit to businesses in Canada?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chairman, colleagues, we have, as you know, programs in essentially three areas. One area is to assist small business in continuing to get the financing they need in order to continue and grow their business.

Secondly, we have programs to reduce the regulatory and paper burden on small business, to free up their time and efforts to be invested back in their business, and then we have programs that provide tools to small businesses to again save them time, but also to give them positive input and information.

On the small business financing side, we have put into place considerable additional money to the BDC, as I mentioned. This is under the credit availability program, and we put more money into both the BDC and the EDC to allow them to increase their.... For the BDC, their loan rate was up 54% over the same period last year. So they're putting out significantly more money.

The small business financing program is also working somewhat better. We have increased the threshold that businesses can apply for and have also made the program easier. We continue to look for improvements to that program as well.

I mentioned some of the things we've done to reduce the paper burden. We've reduced the paper burden by 20%, and we're looking for changes and new improvements to that.

With respect to tools for small business, we have the BizPal program, which I hope you all know about. Essentially, it's a one-stop shop for businesses to run out a list of the licences and permits that they're going to need if they want to establish a new business or grow their business. That's a huge time-saver.

We also have just launched the new Canada Business network, which is an online portal, although it can also be accessed in person or by phone, that tells all about the government programs and services that assist small business. It also gives them positive tips about staff management and about a number of skills they are going to need in order to succeed.

If you haven't checked out the Canada Business network, I urge you to do that. I think the committee would be interested to test it out. If you have feedback for us, we are of course happy to hear that. We've put a lot of improvement into that.

So, colleagues, those are some of the measures we have in place.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

In terms of your opening statement, you talked about the small business sector being an important stabilizer in the Canadian economy. It accounts for 98%, I think, of business in our country.

Can you maybe outline your views on what's to come for the sector? What should we be looking for, as parliamentarians, to further advance the position of small and medium-sized enterprises in this country?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

We really see not only that small businesses are already the backbone of our economy but also that they have a tremendous potential for growth, and for high growth.

I know that Coleen really wants to talk about this because it is her area. She lives and breathes these things, but essentially we see that Canada can really have a niche, I guess, a success story, especially in this services sector, but in the small business sector in total.

I'm going to let Coleen talk about that because she's here to do that and she wants to do that.

[Coleen Volk]

Thank you, Minister.

Marie-Josée can speak more broadly about small businesses, but within the services sector, it's a very diverse sector with all kinds of services and a real variety of wages. The good news is that the services sector is moving more and more to higher value-added jobs, and the kinds of jobs that we are trying to attract generally through government policy would be higher-value jobs.

The service sector itself does account for over 70% of the GDP and over 78% of the workforce, so it's a very strong contributor to the economy in Canada.

In terms of what's to come, there are a lot of different components to the service sector, but in general I would say the move is toward higher value-added jobs.

[The Vice-Chair, Liberal, Anthony Rota]

Very good.

We have five seconds left. I'll let you ask one quick question.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Thank you for coming.

[The Vice-Chair, Liberal, Anthony Rota]

Thank you very much.

Now, we'll continue with Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

Thank you, Madam Minister, for appearing before us.

I'm a little bit surprised that you wouldn't talk about the HST, one of the most significant economic policy shifts that's taking place for small business and tourism.

Before I get to that, though, I would like to ask you about the credit card issue and your opinion on it. The Canadian Restaurant and Foodservices Association estimates its members have a before-tax profit of 4%, but have a 2% charge from the credit card companies on average. Do you think that's a fair ratio that they have to pay for that service? Is it fair for those business people who actually run those operations and employees to have that type of relationship?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

The whole matter of the credit card charges has been a real concern to the small business sector. They brought that forward to government. The consultation that's taking place right now on the code of conduct surrounding all of these issues, including the one you raised, has made the sector feel very comfortable, very happy, because instead of government putting out a decree from on high that this is the way it's going to be, it allows the parties themselves to have face-to-face discussions and make sure their issues come up.

[Brian Masse, NDP, Windsor West, ON]

You are supposed to be their champion. Do you believe that ratio is a fair ratio?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

We want to make sure that the cost of this kind of financing is as reasonable and competitive as possible. The principle we want to see is a competitive rate and choice for consumers and merchants.

[Brian Masse, NDP, Windsor West, ON]

With all due respect, there needs to be some political leadership to tell them this rate is not acceptable. I hope the government comes to that conclusion at some point.

I do want to move on to the HST related to tourism, because as you know, we've actually had a record tourism deficit emerge in Canada, as reported by Statistics Canada, not only internationally but also with the Americans. What's interesting with the Americans is that we've actually seen an increase of Canadian visitation, but at the same time we're seeing a decline of money.

Do you believe the HST is going to be good for Canadian tourism industries?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

By the way, we did have an increase of visits from the U.S. in the last month for which we have statistics, so we're seeing some good results from the Canadian Tourism Commission's promotional advertising efforts in the U.S. that were financed by the economic action plan. All tourism sectors around the world have had significant difficulties as people draw back on discretionary spending. It's not just Canada, but all tourism destinations are having some challenges, and you've probably heard that--

[Brian Masse, NDP, Windsor West, ON]

Our deficit is widening. That's the problem. Everybody is suffering that, but when we have a widening....

About the HST, do you believe that's good for Canadian tourism? Maybe you could explain why.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

The HST, as you know, is a tax choice made by provinces, and it will impact some sectors differently from other sectors. We have been hearing both concerns and some applause from different sectors of the Canadian tourism industry about that. As you know, the federal government had some transition support to mitigate the impacts of some of these measures.

[Brian Masse, NDP, Windsor West, ON]

With all due respect, though, the tourism industry has been quite clear about their concerns on this. Have you or the finance department done any studies to show the impact of the HST on tourism?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

The Department of Finance does do assessments on different impacts of these fiscal measures, but it really is an issue for the provinces to deal with as they make that decision.

[Brian Masse, NDP, Windsor West, ON]

This doesn't happen without you and the province. So your department has not done an impact study of HST on tourism?

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

I'll ask the officials, but to my knowledge, we leave that to the provinces. However, we have had a number of discussions with the different sectors of the industry that have concerns.

[Brian Masse, NDP, Windsor West, ON]

Maybe I'll ask the officials, then.

Have there been any studies done on Canadian tourism and the effects of the HST?

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

A point of order.