Debates of May 29th, 1995

Petitions

[Art Hanger, Reform, Calgary Northeast, AB]

Mr. Speaker, the third petition also bears 100 signatures.

The petitioners pray that Parliament not repeal or amend section 241 of the Criminal Code in any way and to uphold the Supreme Court of Canada decision of September 30, 1993 to disallow assisted suicide or euthanasia.

[Nelson Riis, NDP, Kamloops, BC]

Mr. Speaker, it is my privilege and honour to present a petition on behalf of residents of Kamloops, Clear Water, Barriere, Vavenby, Chase, Logan Lake, Little Fort, Birch Island, Blue River, Savona, Westwold and Cherry Creek, which brings to a total of 87,422 signatures on a petition circulated by JC-55 SuperCountry radio in Kamloops.

The petition basically points out the need to have the Minister of Justice take whatever steps are necessary to amend Canada's Criminal Code and parole system to ensure safety and peace in our neighbourhoods.

[Jan Brown, Reform, Calgary Southeast, AB]

Mr. Speaker, I rise to present a petition from citizens concerned about making our streets safer for the citizens of Canada. They are opposed to the current practice of early release of violent offenders prior to serving the full extent of their sentences. They pray that we make our streets safer for law-abiding citizens and families of victims of convicted murderers.

[Marlene Catterall, Liberal, Ottawa West, ON]

Mr. Speaker, I have a petition to present on behalf of approximately 125 residents of Canada. They point out that discrimination against lesbian, gay and bisexual Canadians exists in every region of Canada and that this is unacceptable in a country known for its commitment to human rights equality and dignity for all citizens. It calls upon Parliament to amend the Canadian Human Rights Act to prohibit discrimination on the basis of sexual orientation and to adopt measures to recognize full equality of same sex relationships in Canada.

Questions On The Order Paper

[Peter Milliken, Liberal, Parliamentary Secretary to Leader of the Government in the House of Commons]

Mr. Speaker, Question No. 181 will be answered today.

Question No. 181-

[Colleen Beaumier, Liberal, Brampton, ON]

With respect to the Department of National Revenue's Assessment 2000 effort, ( a ) why is there a provision for backhauling from a CW licensed warehouse to a BW licensed warehouse in cases where the department will not grant a BW licence, and ( b ) what is the threshold in terms of volum of business for granting a BW rather than a CW licence where all other criteria have been met?

[David Anderson, Liberal, Minister of National Revenue]

A BW sufferance warehouse is a primary public facility licensed by Revenue Canada for the receipt of in bond freight

imported by highway. These facilities are serviced by Revenue Canada and are licensed when a demonstrated need exists for either a new or additional highway sufferance warehouse in a customs area.

A CW sufferance warehouse is a secondary facility for the private use of an operator for the deconsolidation of in bond freight arriving by any mode of transportation. In the case of highway freight, goods must first be reported to the primary BW highway warehouse before being transferred to a CW warehouse for customs clearance. These facilities are operated by freight forwarders, consolidators and deconsolidators for freight carried in their system.

In reference to part (a) of the question, an increasing number of companies have been applying for CW sufferance warehouse licences in the Toronto area. Faced with limited resources, local Revenue Canada officials introduced a system to allow freight forwarders to backhaul goods requiring customs examination to the BW sufferance warehouse rather than having Revenue Canada provide the service to the CW facility. This arrangement has permitted the department to license additional CW warehouses since no on site customs service is required for examination purposes.

In reference to part (b) of the question, the policy on the licensing of BW highway sufferance warehouses is one per customs area, with exceptions made for high volume locations. Current departmental policy provides for the licensing of an additional type BW facility if the volume of commercial highway traffic handled at a particular customs office exceeds 40,000 shipments per year over a sustained period of time and the potential operator demonstrates the ability to attract a minimum of 20,000 shipments per year.

There is no volume of business criteria for CW facilities, however the department must be able to service them within existing resource levels.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I would ask that the remaining questions be allowed to stand.

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, I rise on a point of order. I want to present a petition.

[The Deputy Speaker]

Are colleagues agreeable to going back to petitions so that the member can present his petition?

[Some hon. members]

Agreed.

Petitions

[Bernie Collins, Liberal, Souris—Moose Mountain, SK]

Mr. Speaker, on behalf of the residents of my riding of Souris-Moose Mountain, I have the privilege under Standing Order 36 to pray on behalf of the petitioners that Parliament ensure that the present provisions of the Criminal Code of Canada prohibiting assisted suicide be enforced vigorously and that Parliament make no changes in the law that would sanction or allow the aiding or abetting of suicide or active or passive euthanasia.

The House resumed consideration of the motion.

Business Development Bank Of Canada Act

[Bernard Deshaies, Bloc, Abitibi, QC]

Mr. Speaker, I am happy to rise today to speak to Bill C-91 on second reading.

Through this bill, the government wants to streamline the Federal Business Development Bank and modernize its operations, two words that are undoubtedly tied to the reality of markets as we near the end of this century, but which fool nobody as far as the intentions of the federal government are concerned. The government simply wants to interfere even more in regional development, and in the case of Quebec, to increase its presence in the most important economic development mechanisms of the Quebec state.

The government is proposing major changes with this entirely new act, the Business Development Bank of Canada Act, which changes the name of the Federal Business Development Bank and repeals the FBDB Act.

The Bloc Quebecois is therefore opposed to any amendment of the actual Federal Business Development Bank Act. This bank must not lose its role as banking service of last resort for small and medium size businesses in Quebec looking for venture capital and development capital.

In the past, the FBDB has always been a very efficient development tool, greatly appreciated by Quebec's small and medium size businesses.

It should be noted that more than 33 per cent of current FBDB loans are made in Quebec, that 23 per cent of the bank's offices are located in Quebec, that the annual volume of FBDB loans to Quebec is in the order of $310 million, or 38 per cent of the annual volume for the whole of Canada, and that 50 per cent of the organization's staff is active in Quebec.

That is why the Bloc Quebecois is proposing the status quo with respect to the FBDB. We should not forget that the Quebec state exists and that it is trying to create its own development mechanisms, despite strong federal interference in regional economic development. The FBDB remains a parallel structure, an administrative duplication, when it cannot adapt to regional specificity because of so-called national policies.

Several structures and programs of the government of Quebec are already geared to small and medium size enterprises in Quebec. The Société de développement industriel (SDI), with programs such as Aide à la production, which can contribute up to 35 per cent of capital expenditures for a minimum investment of $100,000, or Reprise de la PME, a program which provides loan guarantees covering up to 80 per cent of the net loss on a loan made by a financial institution, are among the many examples that attest to the economic involvement of the Quebec state in small and medium size businesses.

There is also the Fonds d'aide aux entreprises that is administered by the Conseils régionaux de développement, an association of individuals where a greater importance can be given to the specific policies of these same regions. There is also the Fonds décentralisés de création d'emplois that are administered by the Secrétariat au développement des régions, and other programs for small businesses, including Innovation, administered by the Quebec department of industry, commerce, science and technology, that also attest to the existence of a small business financing structure in the province of Quebec.

Moreover, in his last budget, Quebec finance minister Jean Campeau announced that he intends to really play the venture-capital card by increasing regional funds and by creating the Fonds de solidarité de la CSN. We already had the FTQ solidarity fund. By adding another solidarity fund, we expect to be able to create many more jobs. I would like mention one of these regional funds in particular: SOLIDE, a venture capital fund related to the SOLIDEQ program and designed to promote local development. SOLIDEQ is a joint venture of the Fonds de solidarité du Québec and the Union des municipalités régionales de comté du Québec.

I must also mention the Caisses populaires Desjardins, which play a major role in financing small business by granting loans at the local community level. This network of more than 1,232 credit unions accounts for nearly 25 per cent of all commercial loans in Quebec. This is unequalled anywhere in Canada.

There is no point in looking for more evidence of the fact that the new bank will not operate at that level, that broadening the Federal Business Development Bank's mandate as suggested in Bill C-91 constitutes not only duplication of small business assistance structures in Quebec and every other province in Canada, but also overlap of responsibilities.

The question we must ask ourselves regarding the role of the FBDB in Quebec is: How can this last resort institution be integrated into the assistance facilities already available in Quebec without causing duplication or overlap? For many years now, the FBDB has been moving away from venture capital financing and development assistance for new businesses.

The FBDB had its place in remote areas, where capitalization through the creation of medium or large size businesses often proves impossible. Why then mess with this assistance that remote areas need so desperately and start competing with provincial governments and traditional banking institutions?

The Bloc Quebecois members sitting on the Standing Committee on Industry prefaced their dissenting report by saying that the Quebec government is in a better position to assess the financial requirements of small and medium size businesses, as well as to develop and implement appropriate programs; yet, the federal government has currently taken over most of this area of jurisdiction, thereby causing many costly instances of overlap. It is obvious that, with Bill C-91 broadening the FBDB's mandate, the federal government is only reinforcing this tendency.

Furthermore, this bill could also have a very worrisome impact on the FBDB's role as an instrument for economic development. Indeed, since the bank will no longer be limited to its role of lender of last resort, it could provide complementary financing.

The risk, of course, is that the FBDB might go the easy way and concentrate on complementary financing, rather than on last resort financing such as stock or risk capital. Since complementary financing is less risky, the FBDB may naturally be inclined to concentrate its activities on that type of financing.

The expansion of FBDB's mandate, combined with the fact that it will now be able to issue hybrid capital instruments, is likely to distort the bank's role of supporting economic development, while also changing the nature of its mandate.

Before concluding, I want to draw the members' attention to clauses 20 and 21 of Bill C-91, which are totally unacceptable to the provinces, and particularly Quebec. Clause 20 reads: "The Bank may enter into agreements with, and act as agent for, any department or agency of-a province-for the provision of services or programs-on their behalf-"

That provision in the bill goes against the decentralization process undertaken by the Quebec state within its territory, where the regions want to take control of their own development.

With this clause, the federal government pursues its centralizing strategy, a political strategy the objective of which is to significantly reduce the power of the Quebec state to become involved in economic development and, ultimately, to keep it from achieving political independence.

By assuming the right to act, through the FBDB, as agent for Quebec organizations or departments, the federal government totally ignores the authority of Quebec's National Assembly and its executive council act, which provides that any Quebec organization or department must seek the authorization of the Quebec government prior to dealing with the federal government.

The new Federal Business Development Bank, or the Business Development Bank of Canada as it is called in Bill C-91, is now the federal government's main means of interfering in Quebec's economic and regional development. This government wants to act as a banker and take over the role of financial institutions in Quebec and Canada.

This is a definite departure from the FBDB's current mandate. The federal government wants to use the FBDB as a tool to limit the powers of the Quebec state to become involved in economic and regional development so as to take over provincial fields of jurisdiction and, ultimately, weaken the Quebec government's autonomy.

This is why the Bloc Quebecois opposes Bill C-91 and is in favour of maintaining the existing structure if the government is not prepared to propose new ways which would truly promote regional development and which would also help the regions take control of their development.

[Marlene Catterall, Liberal, Ottawa West, ON]

Mr. Speaker, I would like to add some observations about Bill C-91 before the legislation is sent to the Standing Committee on Industry.

This new bill will enable the Business Development Bank of Canada to expand its activities and to provide programs and services to meet the changing needs of Canadian small business, particularly with respect to improved access to financing.

It has been 20 years since the current Federal Business Development Bank was established by legislation. At that time the hon. member for Windsor West spoke in the House on the incorporation of the FBDB saying it would further encourage and assist the establishment and growth of Canadian small business and indeed it has. The bank has lent over $4 billion to Canadian entrepreneurs at no cost to taxpayers. This amount is estimated to have created more than 30,000 jobs in the past six years alone.

Hon. members are well aware of the important role small businesses play in the new knowledge based economy that has emerged in the 1990s, an economy characterized by rapid technological change, intense global competition and innovation.

As the economy becomes global the smaller players are becoming more influential. Small businesses have the flexibility to respond quickly to niche market opportunities; they can keep up with change and innovate aggressively. This was summarized by the Standing Committee on Industry in its report last October entitled "Taking Care of Small Business". The committee wrote: "The smallness of these firms is a clear advantage. It makes it easier for them to sustain innovation and an entrepreneurial spirit. Indeed, several of the most prosperous and competitive economies in the world today are based on small firms."

Canada now has about two million small businesses, an increase of one-third since 1982. Today, 99 per cent of all registered businesses have fewer than 100 employees. Since 1992, in the last three years, small businesses have created virtually all of the net new jobs in Canada. Canadians will continue to look to small business for new jobs and economic growth. Small businesses, including the self-employed, now account for almost two-thirds of private sector employment and 60 per cent of our economic output.

However, small businesses face unprecedented challenges. In the face of intense global competition, small businesses need to upgrade their management skills, find employees with the right skills mix for their market niche, develop or acquire technology that helps them to innovate, and develop very quickly the ability to tap into foreign markets.

The government has addressed small business issues in a variety of ways. I will point out that this government has placed a high priority on responding to the challenges faced by small businesses. We made small businesses the centre of our economic platform in the red book. We published a position paper entitled "Growing Small Businesses" to accompany the 1994 budget. Since that time we have received valuable input on small business issues from a wide variety of informed sources from within government, the private sector, and parliamentary groups.

We have had numerous combined discussions within our federal Liberal caucus, a working group set up under Industry Canada with the private sector and leadership from within Industry Canada. Throughout these various studies several recurring themes emerged. One message was that small business has a vast untapped potential for creating more jobs and more wealth. Another theme was the government role must be to facilitate the efforts of those outside government to build an innovative and entrepreneurial economy. Finally, the various

studies brought home the point that government programs must become more efficient, effective and relevant to the needs of small business.

This government has responded through initiatives announced in the 1995 budget and in the report, "Building a More Innovative Economy". This legislation is not in a vacuum; it is in the context of a whole series of initiatives to allow small business to do what business does best, which is to grow the economy, grow new opportunities and new jobs for Canadians.

The Federal Business Development Bank has from its inception been designed to help tap the potential of small businesses to create jobs and wealth, and it has done so in a way that is self-financing. This legislation has been drafted so the new Business Development Bank of Canada can become more efficient, more effective, more relevant to the needs of small business.

The Business Development Bank of Canada will not compete with private sector lending institutions but it will provide complementary services.

The private sector banking community still faces many challenges in adequately serving the needs of small and medium-sized businesses. Four gaps particularly exist in the financing of small business. The first is the so-called risk gap, the unwillingness of lending institutions to provide certain small businesses loans even at interest rates that reflect the higher risks associated with those loans. The second is the size gap, the high transaction costs associated with smaller loans and investments relative to larger ones. Third is the knowledge gap, the reluctance of lenders to provide financing to knowledge based, soft asset firms. Finally, the flexibility gap, the unwillingness of lenders to provide flexible financing to promising businesses that have yet to reach cashflows sufficient to service debts.

The FBDB has been one of the government's primary policy instruments for responding to these gaps as well as to the need of small business for management services.

It is important that we move quickly on this legislation. I do not think there is a member of Parliament in the House who does not regularly hear from and meet with small business constituents who say consistently that lending, financing, dealing with their bank is a major problem for them. There has been a substantial change in that relationship. Whether it is an existing small business that has been going for many years and suddenly finds itself in a different situation because of a changing economy or whether it is a new entrepreneur wanting to start up and needing the foundation to get started, the problems we hear from our constituents, and certainly I do from many small businesses in Ottawa West, all focus around the problem of financing, either start-up or continuing or expanding business.

The initiatives being taken to give the Federal Business Development Bank more flexibility under its new name to allow it to seek out new partnerships will allow it to ensure that small business can continue to drive the Canadian economy forward into the 21st century. By supporting small businesses through the evolving stages of their development, the FBDB helps them create jobs and succeed. Now as the Business Development Bank of Canada it will have greater flexibility to respond to the changing needs of Canadian entrepreneurs.

I look forward to the range of debate that can take place in the industry committee on this bill and to seeing it reported back to the House of Commons quickly so that we can get on with the task of helping small business in this country grow the economy and grow prosperity for Canadians.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.