Mr. Speaker, I am pleased to speak to Bill C-99 and about how the government is acting on its commitment to provide leadership in helping small business grow and create jobs.
I will spend some time discussing the consultations that have fed into this legislation and the initiatives we have taken to help small business grow and prosper.
Small business has always played a crucial role in the Canadian economy, be it a local corner store, a remote fishing camp, parts suppliers to the aerospace industry or a computer software developer.
Small businesses are a vital job creator and are contributors to our country's wealth. Today there are about 2 million small businesses in Canada. They account for almost two-thirds of the jobs in the private sector and 60 per cent of Canada's economic output. It has been stated many times that small business creates 82 per cent of all new jobs.
In my riding small business played a pivotal role in the opening up and the development of the north from small aviation companies that led the way, to the service industries that followed to support the growth, to an increasing number of aboriginal owned and operated companies which provide the services needed and which drive the engine of economic growth in the communities.
I now illustrate some of the dynamic things small businesses are doing in the north. People in my riding are becoming increasingly aware of the potential for growth when we work together to create the economic and social development so needed. An excellent example is the Dogrib Nation group of companies. The Dogrib Treaty 11 Council recognized that the best way to address the needs and priorities of its communities was to play an active role in partnership with the businesses that deliver the services needed. Therefore it created the Dogrib Nation group of companies to address economic development needs from investments in hydro-electric power generation to forestry, heavy equipment supply, aviation in partnership with Canadian helicopters and commercial catering.
The group pursues a number of industrial and human resource development activities for and on behalf of the four Dogrib Nation communities. This is a living testament to the empowerment potential that can be unleashed by small business initiatives.
Another example is the Northern Transportation Company Limited, originally a crown corporation. NTCL's primary objective is to provide cost effective, reliable and comprehensive marine transportation and related services in northern Canada and the Arctic. Now NTCL is the wholly owned subsidiary of NorTerra Incorporated, which in turn is owned by two aboriginal corporations, the Inuvialuit Development Corporation and Nunasi Corporation. The Inuvialuit people of the Western Arctic and the Inuit of the Nunavut are the beneficial shareholders of NTCL.
There is recognition for those small businesses that have been able to achieve equity. Recently NTCL was the recipient of the federal locators award given to those companies that demonstrate they can bring in the groups under-represented in the general population or general labour market areas.
When we bring small business down to the human grassroots level, we look at small communities like the community in my riding of Fort Resolution. The people have undertaken to commit themselves to the small business of running a sawmill, a very industrious and skills related industry. The community can see the results of it and have the participation in terms of jobs and watch exactly how small business grows. They have been able to develop
an economic development arm which has allowed them to provide some of the supplies they need in order to build their homes and to provide the region with some of those facilities.
They have taken it upon themselves to get into an industry that would produce some of the materials needed for building homes such as moulds to create bathtubs and all the other things needed for use inside a home.
There are a number of other items they produce. They are expanding and diversifying which is the key to successful small businesses to either focus and do something very specialized they are good at or to capture a market. This seems to be what they are doing, and doing it very well.
During the recessionary years when large multinational corporations were laying off workers, small businesses were responsible for almost all of the net new jobs created. Why are they so successful? Small businesses embody the dynamism and flexibility to respond quickly to new challenges. They know they have to innovate aggressively in order to compete.
Canada is now moving into a new economy, one characterized by rapid technological change, intense global competition and innovation. Small business has the right stuff to succeed in this environment. However, small business cannot do it alone. It needs the right environment and the right tools to get the job done and that is our responsibility.
The task of the government is threefold in terms of small business being successful. The first thing we must do is create the best economic conditions and institutions that will allow these innovators in the private sector to get on with it. It always helps to have a country as politically stable as it is economically stable. It helps to create the right condition and the right climate for those small businesses to flourish. It helps to create an environment where new ideas are spawned and where ideas, technology, and new production processes move quickly throughout the economy. It helps Canadians realize that innovation does not just happen; it thrives best in countries that consciously understand the process and take steps to create a national system of innovation. This means we must work with the private sector to identify strategic opportunities and channel our resources toward fulfilling those opportunities.
In February 1994 we asked the small business community to help us create the environment and the tools they need to succeed. The House of Commons Standing Committee on Industry, the private sector small business working committee, the chamber of commerce, and many other groups contributed to one of the most comprehensive reviews of small business ever undertaken.
Four primary messages emerged from the review. Small business told us that with the proper support they have a vast untapped
potential for creating jobs and wealth. This is no secret. This is something that is quite well known and has been demonstrated time and time again. Reducing the deficit is one of the most important steps toward unleashing this potential, we were told by the various proponents. Government programs must become more efficient, effective, and relevant to the needs of small business. Who knows best? Of course small business does, with their various proponents. Finally, the vibrant small business sector that Canada needs cannot be created by the government alone.
We have listened to these messages and we have acted on them. We have placed the needs and concerns of small business at the centre of our job creation agenda. Our consultations reaffirm that high deficits and a rising debt burden spoil even the best prospects for any country's economic growth. We need stable economic policies for sustained growth and job creation. The fiscal policies we are pursuing address this need.
We in Canada recognize the serious debt-to-GDP problem we face, and we are responding to it with the biggest budget cuts since demobilization following World War II. The 1995 Canadian budget will reduce the federal government's borrowing requirements to 1.7 per cent of GDP by the next fiscal year, 1996-97. This is the lowest of all the G-7 countries.
We also set an inflation target range of 1 per cent to 3 per cent and we have in fact kept inflation below the midpoint of that range since 1991. In terms of inflation, Canada is the Switzerland of North America in the 1990s.
Also in the last budget the Minister of Finance announced a rollback of unemployment insurance premiums from $3.07 to $3 per $100 of wages to lighten the burden of profit-insensitive taxes. We are refocusing our remaining programs to reduce duplication and serve the needs of small business in the best way we can.
The red tape and associated paper work and complex regulatory hurdles faced by any venture can be discouraging, if not insurmountable. We have eliminated 250 regulations. We are in the process of reviewing another 370 in an effort to achieve a more efficient and effective framework for business.
We continue to work with the private sector financial institutions to improve their ability to serve small business. They have responded with new services, including specialized lending units to serve the needs of knowledge-based firms. We recognize that there are some areas the private sector will not be able to serve very well.
We have responded by reviewing and then giving a new mandate to the former Federal Business Development Bank. The new name Business Development Bank of Canada is intended to highlight the bank's new approach. The bank will focus on filling our four marketing gaps. First is the knowledge gap, gaining an understanding of the information technologies, software, and related indus-
tries in order to serve businesses where the principal assets are between the ears of the owners and not conventional hard assets.
Second is the size gap, finding ways of providing smaller loans to meet small business client needs while still breaking even financially. People do not go into small business to go broke. People go into small business in order to flourish, in order to specialize and develop and diversify if they have to, to capture those markets that are out there. Essentially, small business means business; essentially that is what it is.
Third is a flexible financing gap, providing loans and other forms of financing on flexible repayment terms, to take account of clients' variable cashflows, particularly in the early years.
Fourth is the risk gap, lending up the risk curve to provide clients with appropriately priced access to capital. This tends to be generally a big problem where you do not have a lot of built-in infrastructure, where you have a lot of difficulty for those small businesses to succeed in areas where they may be very remote and do not have the kinds of infrastructures that are available in a more broadly based population.
We recognize that implementing this new mandate as a complementary lender will require nothing less than a cultural revolution. The bank is developing a corporate plan that will give effect to this new mandate. We expect that the new Business Development Bank of Canada will become recognized in Canada and around the world as a leader in developing new financial instruments for small business. The example set by the new bank will show the major banks that small businesses are worth their time and effort and will inspire them to greater participation in small business financing. Access to financing remains an important issue for entrepreneurs. However, development of a business climate that encourages growth and job creation is equally important.
We are determined that the business framework laws shall be part of Canada's comparative advantage. We are seeking to forge new partnerships among the innovative players in the economy to ensure a vibrant small business sector. We recognize that support for innovation must be sharply focused on the commercialization of science and technology. We are concentrating our efforts in two key areas: building partnerships between all players, especially innovative small businesses, and improving strategic access to information.
We have launched a Canadian technology network that will help small business acquire and manage new and complex technology by putting them in contact with the Canadian research community and we will provide business with rapid access to information on domestic technology.
We have established the technology partnerships program to promote collaboration between Canadian universities and small and medium-sized businesses to turn university technologies and ideas into new and improved products and processes and services. It will bring together universities and businesses in cost-shared efforts to demonstrate, develop, and market promising technologies.
Perhaps nowhere is there greater opportunity for innovative businesses to realize their full potential than through the information highway. The federal government is moving quickly to develop an information highway strategy that will build on national strengths in telecommunications and information and information technologies to create jobs through innovation and investment, reinforce Canadian sovereignty and cultural identity, and ensure universal access at reasonable cost.
We established this commitment to small business in the Liberal Party's red book because we recognized that they are the engines of Canadian economic growth. We put this commitment into action by announcing proposals designed to help small business grow. We furthered this commitment with the measures contained in the last budget, and we will continue to maintain this commitment to ensure the health and prosperity of Canadian small businesses.
We brought forward Bill C-99 to enable the completion of the process of modernization that moved the SBLA program to full cost recovery. This renewal will relieve the financial burden of the program on Canadian taxpayers while enabling the SBLA to continue to provide its benefits to small business.
I would like to emphasize the importance of what can be accomplished when we work together in partnership as Canadians. Earlier I talked about some of the innovative and dynamic things that are happening in my riding as a result of people working in partnership and co-operation.
The United Nations recognizes Canada as the best country in the world to live in. We accomplished this by living and working together. We created the environment, economically, socially, politically, and the opportunities for all Canadians to empower themselves and in turn contribute to society. It is through these actions that we will also fulfil our promise of creating jobs and prosperity for all Canadians.
The north is no different. As proud Canadians in the north, we too want to contribute to society, we too want to contribute to the overall economy and well-being of our country. It is through an innovation like this that perhaps those opportunities and those doors of opportunity become more available.