moved:
That this House take note of the Second Report of the Standing Committee on Industry ("Taking Care of Small Business"), presented to the House on Tuesday, October 18, 1994.
Mr. Speaker, in the ten years I have been sitting in this House, I have always taken an aggressive and enthusiastic stand for the small and medium-sized business sector. This is one of my priorities because I know how crucial and invaluable the vitality of our small and medium-sized businesses is to our economy.
Our small business sector accounts for nearly 40 per cent of our gross national product. It already provides employment to over four million people across Canada and generates a great many new jobs. Between 1979 and 1989, 85 per cent of new jobs in Canada were created by small businesses. This sector of our economy is the one with the highest growth rate. Because they are closer to the people and more closely tied to the community, small businesses are at the heart of our society. They are part of our daily life. The vitality, creativity and success of Canadian businesses is recognized world-wide. We all benefit from the talent, ingenuity, perseverance and sense of responsibility of our small business leaders.
Of course, much attention is being paid to Quebec Inc., these groups of Quebec businesses that have grown very quickly during the 1970s and 1980s. This is the fabulous success story of small businesses that expanded greatly in a very short time with government assistance, particularly that of the federal government. But Quebec Inc. is more than that. It is also thousands of less flamboyant and lesser known businesses which are nevertheless very successful and, more importantly, provide employment to thousands of people.
I am very proud of the fact that our government has made assistance to small businesses one of its priorities. For years, when we were in opposition, I have done everything to try and make the previous government realize how important our small and medium-sized businesses are to the Canadian economy. I asked in every possible way for governmental red tape to be reduced, single windows to be established and access to capital be made easier. I suggested that our embassies and consulates put more emphasis on the export of Canadian products. I called for the Canadian government to take a more active part in developing new markets in conjunction with businesses.
I must say that the events of the past week have made me very proud and very happy. Night after night I could watch on television as our Prime Minister and hundreds of business leaders from here developed trade ties with the most populous country in the world: China. The approach used by Team Canada has already been widely praised as a model of effective and efficient trade development. This is when we were able to see how a Prime Minister that takes the trouble to do so can, better than anybody else, develop trade opportunities abroad.
The team that represented us in China is an all-star team; it is the best team our country has ever produced. All my colleagues will agree, I am sure, to award the Prime Minister the first star of this historic diplomatic and trade mission. However, its success is not measured in goals as in hockey. It is measured in terms of jobs for our workers and expansion opportunities for our businesses.
This diplomatic and trade achievement did not happen by accident. It rests on this government's fundamental belief in the need to identify in concert with the private sector the strategic niches likely to enable the small businesses of today and tomorrow to achieve their full potential. In this regard, my colleague, the Minister for International Trade, has just published a report outlining how the government intends, with the help of banks, to shore up its support of small exporters.
This report sets out an action plan and proposes concrete solutions to the needs of small businesses to ensure their development and their access to export markets. We still do not fully realize how much momentum exports can give our small businesses and our economy. For example, Quebec is a trading province where not enough entrepreneurs care to face external markets. Quebec exports are worth almost $35 billion a year, but only 22 per cent of Quebec's small manufacturers export their products. And they only export 14 per cent of their production.
Two hundred businesses account for almost 95 per cent of foreign sales. Let us think for a second about the amount of business and the number of jobs that would be created if the majority of Quebec's 160,000 small and medium-sized businesses took full advantage of export opportunities.
The action plan identifies three areas where support of small exporters must be improved: access to information, access to short-term financing and access to intermediate financing. Entrepreneurs will recognize these as areas where the government's strategic involvement can largely benefit small businesses.
Through the measures it proposes to make it easier for small businesses to access information, this action plan is designed to eliminate the real frustrations felt by entrepreneurs who want to obtain crucial information on their export capacity. It creates a real resource guide that will allow small businesses to save precious time in their efforts to break into international markets. It gives them access to a team of experts and a series of dynamic and effective training programs.
We also want to create a climate of co-operation between financial institutions and small businesses. This would meet an essential need of our businesses. In this regard, the government's role is crucial because many entrepreneurs were not well treated by financial institutions during the recession. As it is, Canada does not have enough businesses that can face the new competition, without our small and medium-sized businesses having to overcome financing problems.
This reality is clearly identified in the report of the Standing Committee on Industry entitled "Taking Care of Small Business", which was tabled recently and which we are debating today here in this House.
The report deals with the obstacles which our small businesses must overcome to find the capital required to grow and expand. The committee came to this conclusion: "Financial institutions, especially the banks, in accepting that their own responsibility to society is greater than `merely' being efficient, stable and profitable, must recognize the importance of small and medium-sized businesses to the national economy". This is a very important and serious point.
I congratulate the members of the Standing Committee on Industry for their clear and articulate report. Obviously, this government wants businesses to develop and to create jobs which will benefit all Canadians. For that to happen, we must act on several fronts. We want services provided by the federal government to be concrete, well targeted and, particularly, efficient. This is why the Minister responsible for the Federal Office of Regional Development-Quebec is in the process of redefining the mandate of that agency. The minister wants the federal government to become a strategic ally of small and medium-sized businesses in every region of Quebec. He wants federal services and programs to be better integrated and more accessible for those businesses, everywhere in the province.
From now on, federal programs will be based on four initiatives which relate to supporting the development of small businesses, namely innovation, market development, promotion of entrepreneurship and projects which serve as regional catalysts.
The objective is to allow the Federal Office of Regional Development-Quebec to help small businesses meet new challenges, at a time when markets are increasingly more open. The agency currently has 13 business offices in Quebec. It will put these offices at the disposal of other federal departments, in order to provide an integrated service to small businesses in the various regions. The Federal Office will thus become the real broker regarding information and programs; it will be the single window which entrepreneurs have been asking for so long.
Federal services will therefore be accessible to all small and medium-sized businesses in Quebec and there will no longer be second-class businesses or regions in that province.
This work is not only being conducted in Quebec. Federal agencies in other regions, including the Atlantic, the West and Ontario, are doing the same thing, because the number one priority of the government is to develop small and medium-sized businesses.
Our government formally pledged to cut public spending and we are taking measures to reach that goal. We must often make difficult choices. However, we are firmly convinced that the federal government must remain an efficient partner of small and medium sized businesses, because they are the ones creating the largest number of jobs.
Our approach will be better targeted and will rely more on the provision of strategic services than on financial assistance. This is what entrepreneurs have been asking for a long time. We are going to concentrate on those sectors where the federal government is better equipped to ensure real added value. There will be no waste, nor any duplication.
Real waste would be to ignore the potential of Quebec regions by depriving them of efficient federal services. As well, real duplication would be for another level of government to build from scratch a second international network to open world markets to Quebec regions.
Canada's geographic location is unique: Two main windows, one on the Atlantic, the other on the Pacific, plus a long border with the United States. We are in a unique position to develop our trade with the largest markets in the world. This is how we will ensure our prosperity.
No doubt our small business sector faces many challenges. Our entrepreneurs are concerned about the scope, the complexity and the rigidity of the regulatory processes. Our regulations are complicated and confusing. Compliance takes too much time, effort and money. Regulation by different departments or different governments leads to confusion, overlap and additional paper burden. Small businesses operating outside their own provinces often have to comply with different product and operation standards.
In 1992 a Canadian Federation of Independent Business survey found that 71 per cent of small business owners found regulations and paper burden to be an increasing problem. It is clear that with their limited resources small businesses face a disproportionate burden of compliance requirements. The government knows that and it is taking action to reduce that burden.
The House committee on regulatory reform and federal government review has been studying the situation. Thousands of small business managers have contributed to the work of the committee. More than 1,700 federal regulations are now examined and improved.
The small business working committees will be submitting their report within the next few weeks. The committee on business environment has examined the regulatory best practices of other countries and governments in areas such as sunset legislation, elimination of unnecessary or inappropriate licences, certification costs and the use of phase-in periods, differential standards and thresholds to alleviate the burden.
It is also considering how to reduce the complexity of the federal regulatory process, how to reduce or simplify the numbers of forms, reports and records required by regulations.
We must also improve the delivery of our programs and services. Currently there are over 700 federal and provincial government support measures for small business. Accessing the right program and service is a complex and most often a very unfriendly process. There are extensive overlap and duplication. Sometimes the government may also be competing with private sector suppliers of services for businesses.
The government believes that it is urgent to take action. That is why the Canada business service centres provide small businesses with referrals to sources of assistance. They provide quick, accurate information about relevant programs, services and regulations as well as some diagnostic assistance.
Business service centres minimize telephone runaround, that is where small business operators are sent from one office to another, from one telephone number to another. The business centre is supposed to take care of that problem as well as inadequate or incorrect information and duplication of government services. This will enable clients to make well informed business decisions in an increasingly global economy. Each centre offers a combination of products and services tailored to meet the needs of its distinctive client base. Currently 19 federal business departments or agencies participate in this initiative as well as other levels of government and non-government organizations.
The combination of participants varies from province to province with the designated managing partners who are responsible for the development and management of the Canada business service centres. In British Columbia and Alberta it is Western Economic Diversification. In Saskatchewan, Manitoba and Ontario it is Industry Canada. In Quebec it is the Federal Office of Regional Development and in the Atlantic provinces it is the Atlantic Canada Opportunities Agency. Each managing partner is well suited to deliver the best services to our clients, the small business owners.
We want to go further. We want to spread the business service centre concept to every province as a model of co-operation between the public and the private sectors. We want to work with the private sector, provincial and municipal governments to eliminate duplication and overlap.
Our colleague, the President of the Privy Council, is currently reviewing all federal government programs. A key element of his initiative will be a rationalization of small business programs.
This is more than the words and vague promises we were given by the last government. This is action. This is action to eliminate duplication and overlap. This is action to minimize the paper burden small businesses have to face on a daily basis.
I am glad to see the Minister of Industry here listening. I hope he will be listening to the debate all day so that in the near future he can respond to the report of the House industry committee and give us more good policy for small business.
In conclusion, this is action to help our entrepreneurs to do what they do best. What small business does best is create jobs. It is what every government has to do to help small business create more jobs and when we have more jobs we have a better country.