Madam Speaker, I want to speak to Bill C-53, but something just happened here that, I think, requires clarification.
Apparently in response to a Reform motion to be disposed of next Tuesday I guess, the government House leader is proposing a kind of gag order. Because he does not agree with the Reform Party's motion to defer consideration of the bill for six months, he is proposing that we proceed immediately. That is what he said this morning.
This needs clarifying. The government House leader referred to our Standing Orders, but went on to talk about employment insurance and what not, leaving the people who are at home listening to us completely confused
Granted, Bill C-53 is not perfect. However, given the principles behind the bill, including the need for small businesses in Quebec and Canada to have access to financing, leaving these businesses in a lurch for six month cannot be justified.
Last year, through Bill C-21, approximately $1 billion in additional funding was to be provided. Now, this was a while ago, and we all know how long it takes for legislation and programs to be implemented at the federal level, especially with this government, which is quick to propose time allocation motions but is very slow when it comes to reviewing programs. I find this somewhat funny. The government House leader wants to proceed quickly when this bill is not well structured enough to meet the needs of small businesses.
At the same time, there is an urgent need to maintain funding. But we must be careful not to repeat the mistake made these past three years, when a bill was introduced each year to provide a one-year extension as well as additional funding. This year-to-year approach makes no sense.
We must at least recognize that Bill C-53 provides for the continuous operation of the small business loans program. We support this objective. It is very important, imperative, that we stop playing this game year after year, leaving our small businesses across Canada on the edge all the time.
Under this kind of management approach, the people concerned live in fear of the program being abolished or of funds running out so they rush out to the bank so they can be sure to benefit from the program. Often, projects, and this has been shown, are not always ready and are more vulnerable. They risk being rejected.
When the time comes to compensate the banks for losses, the government has a number of demands. This is what occurred in the past, because the basis was a year at a time. The auditor looked into that and noted that there was indeed a control problem and a certain lack of cost effectiveness. I think that, for the last year, the compensation figure was around $200 million. A significant figure nevertheless.
However, 95% of businesses in Canada are small. They create nearly 50% of jobs. It is the small businesses of 50 employees or fewer that use much of the manpower and are the most imaginative and creative, we have to admit. They are the most involved in economic development. That is very important.
This is why we support the bill in principle and why, Tuesday, the Bloc Quebecois will support it. We understand to some extent the arguments of the Reform Party and we understand why the Reform Party wants a six-month delay in order to better understand the situation. If we agreed to their proposal, we run the risk of depriving small business of funding for a fairly long time. We cannot agree to that.
The best approach would be for the Reform Party and the other opposition parties along with the government members to buckle down and get to work on the Standing Committee on Industry. The parliamentary secretary is here and has said that he would be receptive to changes and improvements. For once. We are not used to having the government open to change proposed by the opposition.
Generally, they tend to think the truth is exclusively on their side. We think it is better distributed than that. Often, it may be found as well on the opposition side.
We can call this a game, but we can also call it democracy. That is the way our system works. There is a bill, and a parliamentary committee is going to examine it. People with proposals for changes will be able to have their opinions listened to. Some changes will make sense and others will not. It will be up to the parliamentarians to evaluate that in committee.
The usual process is for a report to made to the House after that. Here again, the opposition parties can present amendments. Since this is a very important subject, this time it might be necessary for the government to show it is listening to the views of the public, which will also be expressed through the opposition parties.
This is what I have heard so far in the debate on this bill, and on Bill C-21 as well, not to mention the debate last year, because the government brings this up pretty well every year.
I am on the Standing Committee on Industry, and again yesterday morning we were presented with a foot-thick pile of documents and statistical studies. There are proposals for such things as seminars, symposia, endless press reviews, and groups asking to be heard. The association of independent business people, consumers, big business, all have opinions on this. Then there is all the current debate around the bank mergers. This is far from a minor issue. It is important.
At the present time, there are seven major banks, plus the caisses populaires in Quebec. As we know, the caisses populaires are extremely important in Quebec. I have some knowledge of this because their head office is in my riding. Lévis is where the Desjardins movement began in 1900. Its centennial will be coming up in two years.
My comments are very pertinent, since half of the loans granted under the old Small Business Loans Act are administered by the caisses populaires in Quebec, while the other half is administered by one of the seven major banks. This is very important.
We are indeed talking about small business and small business financing, but we are also talking about how banks operate. This is currently one of the most talked about issues at the federal level. All the parties must conduct a very thorough review of this issue. All have basic positions and principles, but the situation of financial institutions is changing so rapidly at the world level that the debate should include an assessment of the financing needs of small business. I know that the Standing Committee on Finance is looking at this issue. There is the McKay report on this.
We must take the time needed, but we must not take too much time, otherwise we would deprive our small businesses from getting the financing they need.
The bill is not perfect. It is in response to the auditor general's recommendations who, and rightly so, proposed accounting measures and controls. The auditor general did a good job. He is proposing that the government add mechanisms, that the minister have more means to control the program's effectiveness. We agree with him. However, we must not only react to this specific situation.
To rely exclusively on controls, and to implement too many of them could prevent us from benefiting from the development triggered by small business in Canada, which we truly need. The future is far from being secure and guaranteed, and major businesses—such as GM in Montreal—are slow to announce what they have in store in terms of investments, planning and direction. Meanwhile, people are left on the sidelines.
There is a major industry in my riding called Davie Industries. It has secured $300 million in contracts, but its workers face an uncertain future, because there is currently no guarantee of financing. We must take a serious look at this situation, because it involves hundreds of millions of dollars. What is involved for 95% of the businesses in Canada is $200 million that has allegedly been lost. However, they have failed to look on the profit side.
As businesses were setting up under the program and therefore creating jobs, tax money was being paid both federally and provincially. This meant additional revenues. Perhaps the program cost $200 million, but no financial studies have been done to show how much it generated for the federal and provincial departments of revenue.
There are no studies to indicate that, but I have no doubt that it brought in far more than it cost. When we talk about 50% of Canada's manpower, we are talking a lot of people. That translates into taxes too. If we do not help small business to set up and remain in operation—because a lot of them go bankrupt—and we do not provide for renewed funding, what happens? Jobs are lost.
After a period of receiving employment insurance benefits, these people find themselves without jobs. But here, I am sounding a sour note, because we realize that some 45% of people who have paid into employment insurance cannot collect benefits under the new legislation when they become unemployed. That is a scandal and the subject for another debate.
That involves money too. This sort of situation costs all taxpayers. What happens when two people are in the same situation and are not entitled to employment insurance benefits? They have to turn to social assistance. This means additional expenditures for both levels of government, since the federal government also kicks in for welfare.
I think one would have to be short-sighted to take the Reform Party's approach and try to have the bill put off for six months because it is not perfect, because it does not quite suit them, and turn a blind eye to the serious impact on the health of businesses, not to say the health of those they employ.
We cannot leave people hanging for six months, not knowing whether or not the program will be extended. If we were to go along with this measure, it would mean that, tomorrow morning, because there is still a little money left in the program—an additional $1 billion to extend it for one more year—all businesses would quickly throw projects together and rush to the financial institutions.
As I see it, there is one major problem with the bill. It guarantees the banks compensation for any losses, on condition that they move fast, because once the $1.5 billion is exhausted, they are out of luck. Everyone is scrambling, and we all know that, when there is too much haste, problems arise.
The Bloc Quebecois would have liked to see a better bill, one that incorporated the suggestions it made last year, and wishes that needs had been more accurately assessed.
An assessment of sorts is under way, it is true, and we will judge the results on their merits.
We would have liked to see more comprehensive considerations and broader consultations. We hope that, as part of the work to be done by the Standing Committee on Industry, it will be possible to carry out this consultation of the groups concerned, namely small businesses, financial institutions, the seven major banks, and the Canadian Bankers Association, as well as caisses populaires and credit unions in the rest of Canada, which operate along the same lines as financial co-operatives.
They should have a say in the matter, for the future and for the long term, so that we will not have to debate this issue in the House every year only to argue in favour of motherhood. I think that is where matters stand, but this government is going to have to listen seriously to what the public has to say and consider objectively the various proposals being made, including those from the opposition parties.