Motion No. 1
That Bill C-99, in Clause 1, be amended: a ) by replacing lines 24 and 25, on page 1, with the following: d ) ninety per cent, or such other percentage as is fixed by the committee of the House of Commons that normally considers matters relating to industry, of any loss sus-''; and b ) by replacing line 1, on page 2, with the following: c ) or, where a percentage is fixed by the committee described in this paragraph,''.
Motion No. 5
That Bill C-99 be amended by adding after line 32, on page 4, the following new Clause:
"4.1 The Act is amended by adding the following after section 7:
7.1 The committee of the House of Commons that normally considers matters relating to industry may, for the purposes of paragraph 3(1)( d ), fix the percentage of any loss that the Minister is liable to pay.''
-He said: Madam Speaker, thank you for your co-operation. Our set of amendments consists of three groups. There are six amendments, and I will now speak to Group No. 1, as agreed.
In this first group, there are two elements that reflect the spirit of our amendments. One concerns the change in coverage now provided under the act. The government currently guarantees 90 per cent of loans made under the Small Business Loans Act, but that same government now wants to cap coverage at 85 per cent.
The other aspect concerns our role as legislators, in Parliament and in committee. In clause 1(1)( d ), and we will get back to this later on, the government's share will be prescribed, and we feel that is wrong. To get back to the loan guarantees provided under the Small Business Loans Act, which will be reduced from 90 per cent to 85 per cent, a difference of 5 per cent, this means the government is in a way backing out, is reducing its contribution to this legislation, and this increases the lender's liability by 5 per cent.
The implications of this measure, although not dramatic, are nevertheless very serious, because there is a message here for small lending institutions, especially in Quebec where there is a credit union in every town. Since the risk to the lender increases, small lending institutions that do not provide more than 10, 15 or 20 loans per year may think twice. We fear that this may cause bank managers to be more cautious, to be psychologically inclined to direct loans to less risky businesses, because the lender will, in theory, still run a greater risk.
This, in our opinion, will cause banks to favour less risky businesses. This runs somewhat counter to the economic development needs of our society, which is increasingly focused on high-tech companies in preparing for the future. These companies represent a risk in themselves because, as we know, contrary to traditional businesses, high-tech companies often have nothing to reassure lending institutions because their operating strength is based on their owner-managers' knowledge and expertise, on intangible values, and not on the usual buildings or facilities.
Reducing government coverage indirectly penalizes high-tech companies, which represent an extra risk for the banks. This has already been clearly identified as a problem during the industry committee's proceedings, because we know that the banks are generally reluctant, perhaps with good reason, to finance these high-tech companies.
This, we also fear, will penalize new businesses without any experience or history that have not yet proven themselves. These businesses represent an extra risk for lenders. Reduced coverage will make it harder for them and for the banks to accurately assess the situation, since any banker knows that lending to a new, unproven business without annual statements for the previous years will make the matter even more difficult.
Perhaps I should have pointed out earlier that we should keep in mind that what this bill implies comes from the last speech of the finance minister, in which he suggested rather strongly that the Small Business Loans Act program should be self-financing.
This is the articulation of this political will. We members of the Bloc Quebecois realize that this is a legislation, a small business assistance program with a price. In 1993, bad debts that had to be absorbed by the federal government totalled $32 million and, with the envelop growing from $4 billion to $12 billion, losses could rise to $100 million.
There may be food for thought here, serious thought. That is what the official opposition has in mind when suggesting that,
before amending this act to limit its scope and introducing concepts such as self-financing, a cost-benefit analysis should be conducted to identify the benefits arising from this legislation. We at least need to know how many jobs are created, what the government's tax return on its investment is-since the loss incurred as a result of the implementation of this act could be likened to an investment-and what indirect taxes are indirectly created by the implementation of the act, taxes that otherwise would not have to be paid.
So, before the scope of this act is restricted, we in the committee would have liked, and that was part of our recommendations, to see a cost-benefit analysis. Unfortunately, the government did not follow our advice and is now going ahead by reducing, as we can see, coverage by five per cent.
The other aspect of Group No. 1, which is also found in Group No. 2, relates to clause 1( d ), which reads:
Subsection 3(1) of the Small Business Loans Act is amended by striking out the word "or" at the end of the paragraph (a) and by replacing paragraph ( b ) with the following: d ) eighty-five per cent, or such other percentage as is prescribed-
It is that "as is prescribed" provision that we object to and that we oppose. As you may have noticed, the official opposition-we all do-feels that the role of parliamentarians, including that of Parliament as legislator and that of the committees, is neglected and belittled. This bill should be a good opportunity to enhance the role of parliamentarians and committees, and this is why we condemn the fact that the government intends to resort to regulations.
All the polls show that we must enhance the role of elected representatives. We were elected through a democratic process, we have things to say, and we all represent our constituents. We are here to express their views. Yet, the system relies less and less on the expertise and sensitivity of parliamentarians. If we are not the ones who can influence decisions, then who can? It is the bureaucracy, the lobbies and those who have money, as the current Quebec premier so accurately pointed out in his review of the referendum results.
Given how much money circulates in our economic system, it is easy to see the power of money. That is confirmed once again. Indeed, if the government does not work openly with the institutions that we represent, than it works on the sly and resorts to its authority. With that provision, we will only find out after the fact that the government decided to change its coverage. By resorting to regulations, if the government wants to ensure self-financing and realizes that implementing the act is too costly, it can simply decide that its coverage will no longer be 85 per cent but, rather, 80, 75 or 70 per cent, without any discussion. All of us here will simply be put before a fait accompli, and that is not good for any self-respecting democracy.