Mr. Speaker, let me compliment the Prime Minister and the Minister of Finance for initiating what I hope will be a new approach to putting Canada's financial house in order.
The budget is the most influential of all government documents because it affects the lives of all Canadians more deeply than anything else. It contains the vision and the direction of government and provides the means of implementation of those programs. Therefore it is particularly important that we recognize the Auditor General's admonition in this regard when he said a compelling need is required to reconcile the convention of budget secrecy with open consultation and debate.
The taxpayers' interests must be protected and who is in a better position to do so than the taxpayers themselves?
In the pursuit to open up the consultation process and improve economic health we have turned toward big, small and medium sized businesses for answers. In this regard I wish to direct the attention of the House toward the management of government grants and contribution programs.
At this crucial time it is necessary that we ask ourselves whether this traditional means of supporting the economy continues to be the most efficient. Are the billions of dollars spent to support these programs used in the most efficient manner? Are Canadians getting the best value for their tax dollar? I submit, no.
As an example, let us go back to October, 1986. The government of the day through the Federal Business Development Bank, signed a share subscription agreement that provided $79 million of equity to a publicly held company as part of a multi-million dollar plant modernization project. A similar investment of $55 million was made by the province of British Columbia, representing $134 million in government funding for the first stage.
In total, $161 million was spent on stage one with only $27 million subscribed by the company.
In December 1992 the company advised the government that it would not be able to meet its obligations by the December 31, 1992 deadline. To date the government, through the Federal Business Development Bank, has not received any dividend payments or redemption of any of its shares. The investment before the company declared it could not meet its deadline was written down to zero in March 1992.
Did we receive the best value for our money? No. Did the contribution of funds generate revenue? No. Were the interests of the taxpayers protected? Certainly not.
Quite clearly, the government and taxpayers took most of the risk and saw no return.
Whether one agrees or not with the various government programs, the process is not effective if it allows the government to undertake the major risks with little or no risk on the part of the companies involved. Canadians cannot afford these kinds of losses. They only add to the already large deficit. It is time that the government allows big business to grow up. It is time that we recognize big business will take its own risks if government provides the right climate. Big business can get in step with the new information based economy without subsidies provided by the taxpayers' money.
Where can Canadians get the most value for their money, and how can they use that money to create employment?
Small and medium sized businesses are the backbone of employment in this country, providing well over 80 per cent of all the jobs for Canadians. It is not done easily.
When I talk to business people about the difficulties of operating their businesses, they tell me there are two major problems. First, tax burdens make it increasingly difficult to operate, to expand and to employ people. Second, they lack the knowledge about programs and assistance available to them. Given that small and medium sized businesses employ most of Canada's work force, create new jobs and help to build strong communities, it is unthinkable that this sector must suffer from an inordinate level of taxation which inhibits growth and thus employment.
We must recognize that small and medium sized businesses will be the primary sources for employment of those Canadians who have lost their jobs because of downsizing. Small and medium sized businesses will put Canadians to work in new occupations. Success in these new jobs will require that both employer and employee work together to develop the skills necessary to accomplish that transition.
The major factor for success of this re-employment strategy will be a reduction of the tax burden to the small and medium sized business. A reduced tax burden will do much more to stimulate the economy and reduce the deficit than broadening the tax base.
The second major problem for small and medium sized businesses and the one which relates directly to my discussion here this evening is the lack of knowledge among these business people about government programs and assistance.
Allow me to run through some of the current government programs designed to assist Canadian business people.
Among them are the Small Businesses Loans Act, Community Futures including business development centres, self-employment assistance and the Community Initiatives Fund, the Small Business Financing Program and the Regional Assistance Program including western economic diversification, the Atlantic Canada Opportunity Agency, the Federal Office of Regional Development (Quebec), and the Federal Economic Initiative for Northern Ontario.
Under research and development we have the Industrial Research Assistance Program, the Scientific Research and Experimental Tax Credit Program, and the Technology Inflow Program.
Under export assistance we have the program for export market development, the Industrial Co-operation Program and the Export Development Corporation.
Under programs for aboriginal Canadians we have the Canadian Aboriginal Economic Strategy, Aboriginal Business Development, the Aboriginal Capital Corporation and the Joint Venture Program.
That is but a sample of the programs available. I have here in my other hand 13 pages and each page has approximately 10 different kinds of program descriptions from one department. In some cases, as many as three departments operate and administer a single program.
Mr. Speaker, if you were a business person which way would you turn, which program would be best suited to your business? Is it not possible that more than one of these could provide assistance?
A preliminary conclusion would suggest that there is an overlap of function and that the potential for bureaucratic competition exists. Can a business benefit from only one program or can the same business benefit from a variety of programs simultaneously? Is it any wonder that there is confusion? Can we be assured that this system in making efficient use of taxpayers' money will exist in this budget?
Whether a business is big or small the fact is that the old way of creating a climate for business success is not the most efficient. Grants and contribution programs must be re-evaluated in terms of need, purpose and administration.
It will be the first step in opening up the budget process as we have seen it here today for consultation and debate and making the necessary improvements that will ensure that we use our resources more efficiently so that taxpayers' interests are protected. Canadians have found ways to cut costs and put their respective financial houses in order. The government must do the same.
It needs an ambitious budget that demonstrates it is master of its financial house. Then big, small and medium sized business will triumph in their pursuits of economic success and Canada can move forward into the new knowledge and information based economy with confidence. That is our challenge. Let us do it.