Mr. Speaker, I am happy to speak on Bill C-53. I oppose this bill, which I spoke to at second reading.
Government members have talked about bank mergers and the Reform Party opposing the bill for the sake of opposing. That is garbage. We are not opposing the bill for the sake of opposing. My party's leader was accused of something he did not do. That is normal practice for them. The media used to do that but have learned a lot and do not do it anymore. Canadians have learned about that and my colleagues from the other opposition parties are learning that. However, the Liberals are slow to learn. Some of the members will never learn, but let us forget about that and talk about the bill.
Motion No. 1 was put forward by the Bloc member for Mercier. The motion is similar to the motion proposed by the Bloc in committee during clause by clause consideration of the bill. The Liberal MPs in committee saw it as a friendly amendment but they voted against it anyway. We also voted against it, not because we are against increasing access to financing for small businesses but because we do not believe the way to do it is through taxpayer funded programs.
The bill is entitled an act to increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses, but that is not what the bill is about. The Liberals have failed to change the bill to suit market needs. The official opposition would support the modernization of the Small Business Loans Act, the precursor of this bill, the Canada small business financing act.
We would like to support improvements in financing for small businesses because we recognize that small businesses are the backbone of our economy. They are the ones that are creating 96% of the jobs in this country. However, the Liberals are proposing something which is not good enough. I will give the reasons why the official opposition is not supporting this bill.
The objective of the bill is to increase the availability of loans to small businesses. We mean incremental loans. This bill does not provide significant additional loans to what is already being provided by the financial institutions.
In 1996 a study showed that 46% of the beneficiaries would obtain loans anyway even if the SBLA was not there.
This bill does not address the lack of working capital availability for small businesses. We are talking about equity of the businesses not debt financing. We need better tools for small businesses. The Canadian economy has evolved significantly since 1961 and essentially this legislation remains unchanged regarding types of assets eligible for financing.
The service sector, knowledge based sector and information sector form a much greater part of our economy today and have a high net employment growth. Their needs are not addressed in this bill.
Motion No. 1 does not address those needs. These questions require careful consideration in reviewing this legislation.
The bill does not provide for capital leasing which is important for small business. The bill does not provide adequate review of risk analysis. There is no provision for losses. The borrowers are not guaranteed. The financial institutions are guaranteed; even if they make bad decisions their decisions are guaranteed, but small businesses are not.
Another reason our party is not supporting the bill is because of the job creation record which is very bad. According to the auditor general the displacement effect is negative. The government is boasting that the Small Businesses Loans Act creates jobs but that is not true.
The bill does not put a mechanism in place to control the financial institutions not to charge an administrative fee, which they are not entitled to. They have been charging the administrative fee when the loans have been provided under the Small Businesses Loans Act.
Another important check should be that related borrowers do not abuse the system. The larger companies will form smaller companies or subsidiaries and will abuse the system because of the threshold limit. The auditor general has found 23 examples where related parties will collaborate and abuse the system. The act targets small businesses. It is meant to support small businesses, not large businesses.
Information on results provided to parliamentarians is not adequate. It is not sufficient. We cannot monitor the output. We cannot look at the results of the implementation of the act.
Industry Canada does not audit any accounts until a file becomes a claim file. When the file is a claim file it will be audited, but before that no one cares about it. No one looks into it.
Those are a number of the reasons that the official opposition will oppose this motion.
The Canadian Federation of Independent Business has been saying that if the current abuses of the Small Business Loans Act were curbed and if the parameters of the program were restricted, this program would require less of an allocation of funds while being effective in meeting the program's objectives.
The thresholds for financing are too high. The legislation defines small businesses as those firms that have up to $5 million in sales. What kind of small businesses are we talking about here? We are talking about medium size businesses. The Small Business Loans Act is targeted. Its objectives are to finance small businesses, not medium size businesses and not the large businesses.
Large businesses are getting enough subsidies from this government. Twenty-five million dollars was given interest free to Bombardier, a firm in Quebec. Does the government give interest free loans to small businesses? No. Canadians know that.
The job creation record and so many other things I mentioned will make sure that the official opposition is firm in its decision not to support this motion. I will not go into more detail. That is enough for members to learn something and to look into it.
Until suggested amendments are addressed, how can any member in this House support the bill? The department needs to clarify expectations and develop indicators of the program's performance in establishing, expanding, modernizing and improving small businesses.
The official opposition is for small businesses but in the true sense. We do not want to have legislation in place that has no teeth. We do not want legislation in place just to give the opportunity to pat the government on the back when it is not doing anything good for small businesses. Small businesses already pay high taxes. We know how employment insurance and CPP premiums are killing jobs and killing small businesses.
Those are the reasons the official opposition and I in particular will not support Motion No. 1.