Madam Speaker, I am very pleased to rise today to speak to Bill C-91, an Act to continue the Federal Business Development Bank under the name Business Development Bank of Canada. The purpose of the bill is to replace the Federal Business Development Bank by the Business Development Bank of Canada.
The Liberal government has decided to introduce a totally new piece of legislation, creating a new body, the Business Development Bank of Canada, instead of amending the existing legislation governing the Federal Business Development Bank. We must not delude ourselves. This new legislation is fundamentally similar to the present legislation although it makes some major changes.
As for the mandate, it is changed in such a way that the Federal Business Development Bank will no longer offer only last resort financing, but will now have the power to offer financing to complement that available from other financial institutions.
It will also be easier for the new Business Development Bank of Canada to enter into agreements with private and public partners, at both the federal and provincial levels, to form lending consortiums. The new bank will therefore be able to establish subsidiaries and to use a greater number of financial tools to fulfil its mandate. Clause 20 of the bill gives the bank great flexibility to negotiate agreements with other federal departments as well as with provincial and local agencies in order to fulfil its specific mandate.
By giving the bank greater leeway, the federal government will be able to develop an integrated approach to interfering in every aspect of regional development, in Quebec in particular, where the Federal Office of Regional Development has become the delivery arm for all federal programs.
In this context, Bill C-91 constitutes another centralizing offensive from the federal government, resulting in costly and needless duplication. It completely negates the role of the Quebec government in providing assistance to small business. This is in contradiction with repeated statements by the people opposite, who said they wanted to eliminate duplication and overlap with provincial programs. On the contrary, this a perfect way to perpetuate the problem.
As I said earlier, this is a centralizing offensive based on clauses 20 and 21 of the bill. These two clauses enable the Federal Business Development Bank to enter into agreements with other federal departments or agencies in order to deal directly with small and medium sized businesses, which will allow the federal government to interfere even more in regional development projects.
Clause 20 of the bill also enables the Federal Business Development Bank to enter directly into agreements with a person or agency, which means that the bank could enter into agreements with regional development councils for example. In Quebec, however, the Executive Council Act prohibits provincially regulated agencies from entering into agreements with the federal government without ministerial consent.
One could think that this section is harmless, since it is governed by a Quebec provincial statute. However, in the present context of fiscal restraint, if the federal government offers to fund projects put forward by a RDC, the latter will press the Quebec government to allow a departure from the law, which is common practice.
Once again, Ottawa dismisses Quebec's role in the matter and shamelessly gives itself the power to act without consulting the provinces. This centralizing offensive in regional development runs directly counter to Quebec's regionalization policy. The federal government has always refused to recognize regional development as an exclusive provincial jurisdiction, dismissing this claim in every constitutional negotiation, while implicitly making a commitment to the Quebec government to limit its action in regions through Canada-Quebec agreements.
However, the Economic and Regional Development Agreement, or ERDA, expired in December 1994 and the federal government refused to renew it. This government can never claim to support regional development by replacing essential components of a social plan with direct assistance to small and medium size businesses. By dismissing Quebec's achievements in terms of assisting exporting small and medium-size businesses, the federal government is trying to make Quebec look like the one responsible for the overlapping which it is creating with this bill.
The FBDB is a successful regional development tool which is greatly appreciated by small and medium size businesses. By and large, Quebec's small and medium size businesses get one third of the loans from the FBDB, but they definitely do not rely as heavily on the bank's extension services. Since the bank has no exclusive commercial objective, such as maximizing profits-it only seeks to recover its costs-, Mr. Rémillard, of the Canadian Bankers' Association, says that it helped develop new financial tools which were often used later by commercial financial institutions. The bank acts as an innovator by proposing new forms of financing which other financial institutions can apply when dealing with small and medium size businesses.
Therefore, the Bloc Quebecois will make sure that the bank remains first and foremost a tool for economic development, that it does not compete with other such tools used by Quebecers, including the caisses populaires, the solidarity fund and the CNTU fund, and that it has the means to support Quebec businesses.
The effect that the bill could have on the bank's role in economic development is very worrisome. In fact, two provisions in the bill, when combined, cast doubts on the bank's ability to maintain its role as a tool of economic development: the broadening of the bank's mandate and the bank's ability to obtain private capital financing through hybrid instruments, contingent on certain conditions.
Firstly, the bank would no longer be just a last resort lender: it would be able to offer complementary financing which would be a little different from what existing financial institutions offer. The danger is that the bank could target its activities more towards complementary financing than last resort financing. Since there is less risk involved in complementary financing, naturally the bank will tend to favour this type of financing.
Bill C-91 is another move in the federal government's centralizing offensive, as I mentioned earlier, which only causes costly and useless duplication. Bill C-91 dismisses totally the provincial government's role regarding assistance to small and medium size businesses. It goes against the Liberal government's claims that it wants to abolish overlaps and duplication with the provinces.
Furthermore, clause 20 of the bill allows the bank, the FBDB, to enter into agreements directly with individuals and with organizations. This means that the FBDB could enter into agreements with regional development councils, for example.
But in Quebec, the Executive Council Act prohibits organizations which are governed by provincial law from entering into such agreements. Regarding regional development, the federal government's push for centralization runs counter to Quebec's policy on regionalization.