moved:
Motion No. 1
That Bill C-53 be amended by adding after line 22 on page 2 the following new clause:
“2.1 The purpose of this Act is to increase the availability of financing of small businesses, which would not otherwise have access to financing.”
Mr. Speaker, I would point out that the Bloc Quebecois voted for the principle of the bill.
We thought it would reform the situation so SMBs would have more ready access to the government guaranteed capital they need but would not otherwise have access to under the usual credit requirements. That was our understanding. This in fact is what the minister said initially when he introduced the bill.
Oddly enough, this bill, entitled an act to increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses, contains no provision stating that this is indeed the intent of the bill. Given this obvious discrepancy, the Bloc Quebecois decided to propose an amendment indicating clearly the purpose of the bill.
The Canadian Federation of Independent Business, the main voice of small and medium size businesses needing financing, repeated to us that the bill should make it easier for small and medium size business to obtain funding. The president of the Canadian federation stated at a press conference a few months ago that 29% of businesses reported having great difficulty obtaining credit. Very small businesses and new businesses have the hardest time getting this financing.
A number of Bloc Quebecois members conducted a survey among small and medium size businesses. Out of the more than 800 small businesses that replied to these seven members, 89% said it is difficult or very difficult to get financing. Yet, the Canadian Federation of Independent Business feels that, because of the greater competition generated by the active presence of the caisses Desjardins, the level of satisfaction in Quebec is high.
This means that accessibility is the main problem. Given that the act is entitled “an act to increase the availability”, it must provide, in its body and not only in the regulations, that such is its purpose.
We are in no way saying that lenders should not be serious, on the contrary. But all of us here know that it is always easier to lend to a well established business whose profitability has been recognized for years, than to entrepreneurs who are just starting up, who have put all the winning conditions on their side, but who have to prove that theirs will be a profitable venture.
Therefore, we hope all members will support this provision. Otherwise, given that a whole part of the act will now be included in the regulations and thus come under the exclusive authority of the minister, there is a risk that not only will the act fail to increase availability of financing, but that it will in fact reduce such availability. I am convinced that no one here wants that to happen.
We know that small and medium size businesses create jobs. We will go back to the need to look at this capability, which has been recognized by everyone. But if these businesses are to continue to create jobs, they must have access to the credit they need.
It is not normal to have so many small and medium size businesses find such access either very difficult or difficult. However, we can understand why when we look at the sectors in which they operate. There are some sectors where it is easier. A new optometrist setting up a business is likely to obtain credit fairly readily. It can, however, be very hard for a small business involved in the production sector or high risk sectors such as new technologies.
Government loan guarantees ought not to apply only to loans to businesses that would have obtained them anyway. Nor should they lead banks to assume bad risks. That is not what we are saying. However, we are saying that, given appropriate careful consideration, small and medium size businesses must have access to credit.
According to some people, things are getting easier. Credit is even available on the Internet from a certain bank. But it must be pointed out that ING bank, the one referred to, charges a far higher rate of interest and, according to what we have been told, loans only to businesses with proven profitability.
What I am trying to say here is that this bill is indispensable, because some businesses would not otherwise have the necessary credit to develop, to create jobs, to continue in operation, and sometimes to grow significantly. We support this bill because we are aware of how important it is, but its purpose must be clear. That is what the Canadian Federation of Independent Business has told us on numerous occasions.
I do not want to call on people's sympathy, but we need to know just how risky it is for an entrepreneur to launch a business. In French we say “launch themselves”. I am not sure how that comes across in translation, but there is a reason for saying “launch themselves”. It shows the big chance the entrepreneur is taking. He puts all of his energy into it, often investing everything he, his family and friends have been able to accumulate with great difficulty. It is therefore important, when he has done everything possible for himself, for him to be able to have access to a guarantee so that he may obtain a loan that would otherwise not be available to him. I therefore invite my colleagues to support this amendment.
I repeat, 80% of the small businesses surveyed by us say that this guarantee must apply to businesses that would not otherwise have access to financing.
I hope, speaking for small and medium size businesses, that this House will agree to having the content of the title reflected in the bill itself.