Mr. Speaker, I am particularly pleased to have the opportunity to say a few words in the debate pertaining to small business.
It is not all that often we get a chance to talk about small business in the House, and we really should. With the indulgence of the Chair and with the indulgence of colleagues present I hope to stray a little from the direct confines of the bill. I know it is most unusual in the House to stray away from the subject matter at hand. I hope to talk about small business in general, to talk about how important small business and entrepreneurship are to our country, and to provide a few words of encouragement for small businesses out there that are struggling today.
Can we imagine what it must be like for an entrepreneur in Quebec even as we speak? We have a situation of systemically high unemployment in Quebec. It has been that way for years, ever since the last separation crisis in 1980 when the people of Quebec chose to elect a separatist government. All that did was give U-Haul one-way traffic to Toronto a bonanza. Ever since the election of the first Parti Quebecois, the first separatist government in Quebec, what has happened? Toronto has prospered largely at the expense of the self-inflicted wounds of the people of Quebec.
All the country has profited because the separatist government in Quebec insists on shooting itself in the foot with separation every 15 years or so. I am sure that is what is ongoing in the province of Quebec.
If the people of Quebec want to do something really worthwhile for their futures, they will resoundingly reject the separatist option. They will resoundingly reject any notion of getting out of the country and will work together to make the country stronger. If they do that it will get entrepreneurs investing in in small businesses in Quebec.
It is about the willingness of people. It is not banks or governments that get businesses going. It is individual people who are prepared to put up everything they have in the world, including their homes and borrowing money from their friends and their families, because they have a dream or an idea to see through to fruition. We should be celebrating the fact that we have these people. These are the people we should be asking in Quebec, because there is systemically high unemployment, how we can go about reversing it.
Let us provide stability. Let us make sure that when people start businesses, particularly in Quebec, they do not have to go through never ending navel gazing, gnashing and worrying about tribalism and nationalism in Quebec. Why would anybody put up with that if they could invest their money in a jurisdiction that does not have such problems?
We have these wonderful people who has invested of themselves. They have put their hopes, dreams and aspirations on the line. What happens when they go into a bank? I can speak from personal experience because I have gone through it, as have other members of the House, many people watching on television today and perhaps a few others who might read the debate.
It is not like going into K-Mart or some other store where they shake hands and say: "We are glad to see you. What can we do for you?" The first thing they say is: "Are you going to do that? We already have a few of these. Didn't you know that somebody just went broke doing this a while ago? If you are to do this, if you are to set up this service, if you are do that, you had better make sure that you can guarantee the borrowing of $1,000 with $2,000".
Instead of the entrepreneur being encouraged, the first remark that comes through is: "We have to protect our depositors' money. Therefore we have to make sure that we do not take any risk at all because you want to borrow $75,000 or $100,000". That is what got the Government of Canada into small business loans in the first place. We ended up as a nation guaranteeing loans that rightly should have been the purview of the banks.
The banks have a licence to print money in Canada. When is the last time we have seen a small, humble bank building? In every city in Canada the four pillars on the four corners of shiny office buildings are bank buildings. That is the way it is. Meanwhile the people of Canada through the tax base are subsidizing the banks. That is what this is all about.
When they went into banks to get loans, the loan officers said that they could not have them because they did not have enough money. The banks had their houses, first born, bicycles and cars. The banks had everything they had in the world but they still did not have enough money for them to feel safe and secure about lending money. If they can lend money to another country and write it off that is okay, but they did not have anything for the small business person, the entrepreneur, the dreamer.
What happens then? The government has to step in and through the Small Business Loans Act guarantee the bank about 95 per cent of the loan at a rate of about 1.5 per cent above prime. Generally speaking any other business paid prime plus two, so there was an obvious magnetic pull to write all small business loan transactions that could possibly be written by the banks and have them guaranteed by the people of Canada, which did not make any sense at all.
The previous legislation raised it so at least the interest rate charged was on par or a little more than the interest rate charged to people who did not have a government guarantee. The amount that would be guaranteed by the government was to be reduced somewhat as well.
As earlier speakers have said, the problem with financing small businesses is not how much people have to pay for the money, within reason. The problem is how to go about getting money in the first place. No matter how good the business plan, if the business person does not have a track record, does not have money and cannot guarantee at least 200 per cent, the chances of getting the loan are somewhat remote. This is why the Government of Canada and the people of Canada, through the Small Business Loans Act, are in the business of protecting the banks. The banks will not do it unless we hold them harmless through the Small Business Loans Act.
In a perfect world we should not be in this business at all. That is what banks should be doing. However we are not in a perfect world. We need to ensure we nurture and help small business people or entrepreneurs. That is why the legislation is so worth while and necessary.
However our job as members of Her Majesty's Loyal Opposition is to oppose bills not just because we want to oppose them but because we in opposition in Parliament can cause the government to rethink some aspects of its bills and make them better. If all we did every time the government brought forward a bill was to say it was great, roll over and not pay any attention, we would not be fulfilling our function as opposition in the Parliament of Canada.
While it is basically a very good bill it has a flaw I would like to point out to members opposite. I hope the government sees the error of its ways and changes it. The amount of money involved in a guarantee could be changed by order in council. It would not have to come back to the House to be debated. That sets a fairly bad precedent. We are talking about the financial responsibility of the Government of Canada and a change to the financial responsibility of the Government of Canada. These decisions should not be decided in a backroom somewhere, even if the backroom has a cabinet table. They absolutely must see the light of day. They must have sunshine, that being the best disinfectant of all. These decisions should come back to the House. In a majority situation it is not likely they will be changed anyway. The government will have its day no matter what the opposition might have to say about it. The bill would be improved somewhat if the provision in it, which allows the government by order in council to change the ratios, was amended so that it had to come back to the House.
I should like to spend a few minutes talking about small business people and where we are going a bit off the rails. The people of Canada who are prepared to give of themselves as entrepreneurs to create wealth and employment across the country are very often at great risk to themselves and to the capital they have built up. They should in some way be honoured. It seems passing strange that the people most revered and honoured in society are hockey players, for instance, who might earn a couple of million dollars a year playing hockey but have never created a job or actually put their lives on the line.
Some accounting firms and chambers of commerce are beginning to recognize that as a nation we need to applaud and encourage entrepreneurship and innovation. To be an entrepreneur or an innovator who creates wealth is a necessary and fundamentally important function any citizen can provide.
I recall attending a meeting sponsored by the Edmonton Chamber of Commerce. The person who appeared at the meeting came from a small town in Colorado. He had won a prestigious international award. His company had gone from nothing to worldwide sales of approximately $500 million a year. His company manufactured tapes used on computers to back up the memory.
They cannot make mistakes with these tapes; they have to be highly precise.
The town in Colorado had an IBM manufacturing facility. IBM wanted to move it to Florida or some such place. Many key people in the business did not want to leave their town because of the life they could lead there; they loved living there. Rather than moving they left the company. They thought to themselves that they were smart, innovative people and wondered what they could do. They decided they would make the world's best recording device, magnetic tapes for computers. They did it by innovation.
He drew to our attention that the town had since become the hub of innovation and entrepreneurship. The people in that town have a week in which to celebrate the leadership derived from small business people. The innovators and entrepreneurs are part of the social fabric of the town. They have star status because the people understand the value of entrepreneurship and innovation.
All across the land thousands of men and women, young and old, have put everything they own on the line with the bank to support their small businesses. They are truly the stars of our economic system. They are the people we should be celebrating, not the big business people who have grants, handouts and loans from the government. It just makes one sick. The bigger the business is, the bigger the hand is into the banking system and into the government system. This is what we must put a stop to. It is wrong to have our priorities so misplaced that we do not recognize what small business people and entrepreneurs contribute to our society when all we can look at are the big mega stars.
Mr. Speaker, I thank you and my colleagues for the opportunity to make the case for small business in our country. I applaud anything we can do to build and strengthen that sector of our economy.