Mr. Speaker, I am very pleased to speak on Bill C-91, an act to continue the Federal Business Development Bank under the name Business Development Bank of Canada. I want to draw your attention immediately to the fact that the legislation proposes to continue the Federal Business Development Bank. However, after my comments, you will see that this is hardly the case.
We oppose this bill. As the critic for industry, I oppose this bill for three main reasons, but also for another reason which my colleagues will tell you more about and which concerns regional development. The three main reasons we oppose this legislation are the name change from Federal Business Development Bank to Business Development Bank of Canada, the change in the status or purpose of the new Business Development Bank of Canada, compared to that of the original Federal Business Development Bank and, finally, the issue of the new so-called hybrid capital instruments, which we will discuss in greater detail.
I will first deal with the name change from Federal Business Development Bank to Business Development Bank of Canada. The issue was discussed by members of the Standing Committee on Industry, after the parliamentary secretary made that proposal somewhat unexpectedly. The committee did not reject the suggestion for reasons of courtesy and also to avoid any conflict. However, even Liberal members seemed uncomfortable with the idea. The proposal made by the parliamentary secretary sought to change the name Federal Business Development Bank to Canadian Bank for Small Businesses.
Again, committee members accepted that proposal out of respect for the parliamentary secretary. If you read the report tabled by the committee, you will not see any mention of that proposal. That recommendation was made out of the blue, and everyone felt that the name Canadian Bank for Small Businesses was too restrictive. The fact is that the Federal Business Development Bank is involved in the financing of more than just small businesses. Consequently, the proposed name was too restrictive and should have been rejected, but was accepted out of courtesy.
Now we find ourselves at the other end of the spectrum with the name Business Development Bank of Canada. Please note that the French name of the new bank makes no reference to "business". So what we have with this bill is a switch from small businesses alone to the development of the whole of Canada. And this is just as extreme. I do not think that Canada's development is related to a bank, nor is that of Quebec. All this is to say that the original name, Federal Business Development Bank, is well-known and respected in Canada and Quebec, and we do not see why it should be changed. Such a change would
result in a waste of money and energy, given the costs generated in terms of paper burden, logos, etc. Again, this change would result in useless spending and a waste of energy.
The name Business Development Bank of Canada is no better than that of Canadian Bank for Small Businesses.
The second point that deserves criticism, and a fundamental one, is the change of mandate implied by the so-called maintenance of the Federal Bank, which is becoming the Business Development Bank of Canada. This is being done without debate or consultation. It has come out of nowhere and is not based on any mandate. Nobody asked the federal government to change the name of the Federal Business Development Bank. This is done in a routine manner, on the sly, by administrative means, the way this government likes to do things; and that may be the Canada of the future, where things will be done in a routine manner, on the sly. They have come up with this proposal that has nothing to do with what the proceedings of the Standing Committee on Industry, of which I am the vice-chairman, led us to expect. There was no recommendation to that effect.
Previously, the Federal Business Development Bank had a very specific mandate as the last resort for small and medium size businesses. Its primary concern was the development of small and medium size businesses, as stated in section 20(1)(b) which specified that the borrowing legal entity could get a loan if: "credit or other financial resources are not otherwise available to that person on reasonable terms and conditions".
That is what led the Federal Bank to be described as a last resort bank. After one or two refusals at the hands of lending institutions, the borrower, provided it had a good record, could get a loan from the FBDB, once those conditions were met.
At that time, the federal bank was concerned only with economic development through the assistance provided to small and medium size businesses. As we can see in subclause 4(2) of the Business Development Bank of Canada Act, the purpose of the bank will now be to support Canadian entrepreneurship. In carrying out its activities, the bank must give particular consideration to the needs of small businesses.
What is being proposed is a far cry from the last resort bank totally dedicated to small businesses development in Canada. As we will see later on with my colleagues, the scope of the bank's activities is being extended. Clauses 20 and 21 of the bill allow outright interference in everything related to development in Canada, at the expense of provincial governments, and more particularly the Quebec government, by promoting regional development in Quebec's stead by way of unconstitutional or virtually unconstitutional dealings, with Quebec parties.
We already know the Canadian government will try to entice Quebec institutions and companies by telling them: if you want our money, you should ask an equal amount from the Quebec government; if it refuses, that will put an end to our involvement. We can see through that kind of trickery, specially on the eve of the referendum.
If Quebecers vote no at the next referendum, it is that kind of centralist instrument that will be used in the Canada of the future.
With Bill C-91, the bank will not be a last resort bank but a complementary lender to other traditional banks on the market. It will be empowered to make agreements with any organization to become its agent in order to provide services, programs, and financing. It will also be allowed to set up lending consortiums. This is a far cry from the development of small businesses. Those lending consortiums could include both private and public partners.
We think that the complementary role of the Business Development Bank of Canada should be limited to filling the gaps on the market and thus improving the situation. We should specify that its primary role and mandate is to meet the needs of small business, as is said in the act.
Before I conclude, I would like to touch briefly on the new so-called hybrid capital instruments. That means that the federal bank will be able to tap private capital instead of relying solely on government funds, as it has up to now.
Nowhere is it mentioned that, in order to attract private capital, there will be a fixed rate of return. So, the new bank may have to focus on profit maximization in order to provide the most interesting rates of return possible. This will mean a complete turnaround for the new bank, since the old one had fixed rates and could focus solely on economic development.
I want to draw the attention of members to clause 36 that provides for the confidentiality of the information held by the bank. It says that the bank has to protect the information it gathers.
Members have to remember that the committee recommended that information be systematically gathered from all financial institutions in Canada under the direction of the Bank of Canada, Statistics Canada and the Superintendent of Financial Institutions. This bill will hopefully include a provision in order for the new bank to co-operate in inquiries supported by Parliament.
By the way, I see that the Bankers' Association is against the bill, which is a good indication that the government has some very concrete plans in mind. We all know that the Liberal government and the bankers usually agree, but not this time. Why? Probably because the government has some other motives that are political and not economic, especially where the province of Quebec is concerned, in order first to influence the referendum and then to be the only one in charge of economic development in Canada, hence building a centralized and increasingly unitary state.
These are some of the reasons why we will vote against this bill.