Mr. Speaker, it is a pleasure to speak in support of Bill C-99, an act to amend the Small Business Loans Act.
I could start out by stating the obvious, that we are reminded daily that the future of jobs in Canada is to come from small business. We are reminded daily that it is the fastest growing sector with respect to job creation. In fact, it is that sector of our economy where there is opportunity for work. I have been reminded three times in the last six days of the importance of the small business sector.
Last Saturday I met with the chamber of commerce in my riding. In a brief which was submitted to me it was stated that there is nothing that can replace a job created by a small enterprise. We all agree with that.
On Wednesday night I was in the city of North York and had the opportunity to attend a small business fair which took place at the city hall. There was a large display by support agencies. There were all types of computer consultants and business consultants. It is important to note that the banks were also there in large numbers. There are groups within the communities which are willing to facilitate ongoing small business and are willing to work with people who want to create small businesses.
Last evening in my riding of Sarnia-Lambton the board of directors of Lambton College agreed to proceed with an innovative international trade centre. I am quite pleased to say I have been actively involved in this project. I started it with the college in conjunction with my neighbour across the river in the United States, Congressman David Bonior from the 10th congressional district of the state of Michigan.
We are working together on both sides of the border to facilitate small businesses in order that they can find markets on both sides of the border. We want to work in partnership so we have linked these two centres located at community colleges in Canada and in the United States by modem. Now a Canadian small business person can find a partner and can obtain the kind of information he or she needs to enter the American marketplace.
There are 40 million people living within an hour's drive of my riding. That is 40 million. There are 80 million people within an eight-hour drive. The marketplace is not just within Canada for small business. Indeed, for many of us it is in the United States. I am pleased to say that small businesses are awakening to this marketplace.
I know of one small business operator in my riding who employs 17 people. He was able to increase his business by some 35 per cent by working actively in the city of Port Huron in the state of Michigan, 400 yards away from Canada.
The marketplace out there is huge. I know of another gentleman who employs two other people making ice boats. His market is in the area surrounding the city of Detroit on Lake St. Clair. He is able to do that from Canada.
There is a huge marketplace out there for small business but there are two areas of specific need that must be addressed to assist small business people. First, small business needs access to capital. That is stating the obvious. We must remember that job creation in the private sector requires an investment. It can vary.
I am talking only about the private sector. In the high tech business, the cost of creating a job, if I can put it in such blunt terms, is $750,000. In other words, that corporation must, to add a person to it, often invest up to $750,000.
In manufacturing in a general sense that number is somewhere between $750,000 and $1 million. That means a corporation must have several million dollars of capital invested to employ people. For those that are specialized the numbers increase even more. I can speak firsthand of the petrochemical and refining industries where the investment required of the corporation can be anywhere from $1 million to $1.5 million.
Changes in the way large industry works are in fact changing that ratio. Across North America we are undergoing a phenomenon known as restructuring. Large corporations examine their workforces and they tend to remove those who are not tied directly to production so that the ratio of job to investment is increasing all the time.
It is because of this that we have to look to small business where we know jobs can be created when an entrepreneur invests anywhere from $3,000 to $25,000. It is because of numbers like those that tells us the future of the job market is in the small business sector.
We all know also that access to funds is the number one obstacle encountered by small business. The Small Business Loans Act is there to support lenders and in turn help small business obtain debt financing often otherwise inaccessible to them.
I state the obvious when I say that if one reads any number of newspapers one will note there is, across this country, often complaints of the lack of access to funds. Although this will not remove every obstacle, it is working toward it.
It is important to realize that the Small Business Loans Act program is delivered not by government agencies but by private sector lenders. We know the Small Business Loans Act has been around for some 34 years now and this bill simply reflects what the realities of today are from a fiscal perspective.
Organizations such as the Canadian Federation of Independent Business, which I should point out is a group which never is hesitant to express its opinion, have supported this bill. That is an important factor to point out. There is support for this bill not just in the House but where it really counts, within the business community and especially within the small business community, a great number of whose representatives are members of the Canadian Federation of Independent Business.
As a result it is important that the House support Bill C-99. It has, since 1961, resulted in a program which I suggest has been successful. We are told that there have been some $16 billion lent by banks under the Small Business Loans Act since 1961. In many people's opinions it is not enough when one considers that in other economies around the world much greater numbers are spent on an annual basis on small business expansion. However, it is important that this tool be there. It is there as an economic tool and it is there as an example of public sector and private sector co-operation and partnership. That is becoming in government at all levels more and more important.
It is also important to remember that government costs associated with this program have escalated quite dramatically in recent years to the point where its sustainability has been called into question. This, quite frankly, is the reality of government today.
As a result, the government has initiated a review of the program and extensive consultations were held over a year ago involving all concerned parties. It is not a unilateral consultation. It is a bilateral consultation involving the public and the private sectors. We are certainly aware of the valuable input that the industry committee provided on this subject.
It is safe to say that the overwhelming consensus from all the major stakeholders is that the government must act swiftly to transform the Small Business Loans Act program into a full cost recovery situation. It must be operated on a full cost recovery basis.
The bill accomplishes this objective and will grant authority respecting the release of security, as many other speakers before me have laid out the technical details of it. I believe that the changes contained in Bill C-99 will complete a transformation process to make the Small Business Loans Act sustainable and realistic and a program that has the support of small business and business associations across the country.