Mr. Speaker, I am pleased to rise in this House to speak to Bill C-53 and to support Motion No. 1 moved by my colleague from Mercier:
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.”
It is the small businesses we are concerned about, and it is unfortunate to note that, while the bill is necessary and we support it, it does not meet all our expectations. It contains no provision for further improving the situation of the SMBs as it stands.
First, Bill C-53 does not give SMBs greater access to credit. It does not make financing available to businesses that could not have it otherwise. We must understand that, in the context of this bill, SMBs unable to obtain financing from the banks at the moment should not look for anything more from this program.
No mention is made of financing SMB working capital and, as we well know, this is a major problem in most SMBs.
So the issues in this bill are quite apparent in the reading of it. It might be a good idea to remind ourselves of the importance of SMBs in our economy. In 1995, the most recent census year, SMBs with fewer than 100 employees accounted for 99% of the 935,000 businesses operating in Canada. That is huge. This represents our business employee payroll. They therefore employed 42% of private sector workers paying 38% of all salaries. There is nothing small about that.
The SMBs are also fragile. These same statistics indicate that 15% of them go out of business in the first year of operation. More than half the businesses that existed in 1989 were no longer on the market five years later, when the census was done.
Overall, the Bloc Quebecois is in favour of Bill C-53, but we are very disappointed that the revision of this bill does not pay more attention to small business loans.
We must also add, as far as issues and context are concerned, that the wages paid by small and medium-sized businesses are far less than the impact they have on employment. Average wages are therefore markedly lower than those of big business, and close to two-thirds of salaries in Quebec come from big businesses or major institutions.
The question may arise: “Do you have any proposals, do you have a position on this?” Yes, the Bloc wants to see legislation that serves small and medium-sized businesses. The amendments proposed by my colleague, the hon. member for Mercier, are intended precisely to enhance, to improve what our small businesses need.
We need provisions to improve access to credit for small and medium-sized businesses in Quebec and in Canada. In two different surveys, including one by the Canadian Federation of Independent Business, 29% of small and medium-sized business owners report that the availability of credit is one of their main preoccupations, if not the foremost. In other words, one-third of small business owners are continually struggling to find or renew credit.
In the second survey, carried out by Bloc Quebecois MPs among small and medium-sized businesses in their ridings, 89% of respondents report that it is very difficult, or difficult, to get credit at a reasonable rate. Only 10% of small and medium-sized businesses responded that they were able to find funding in their community with any ease.
Some small and medium-sized businesses—and we had proof of this when we met with the bankers and caisse populaire people—are very well known in their own little circle. The relationship of trust between the lending agent and the new or potential business is therefore a given. This is not the same when the small or medium-sized business is in a larger riding, or in an urban area.
But that is not the only thing. There has certainly been a change as far as the lenders are concerned. A few years ago, a woman wishing to get a loan to start up a small business had to face a most ridiculous situation. The first question she would be asked was: “Do you have a husband?” The second one was: “Is he gainfully employed?” The third question was: “Can he secure your loan?” I am not going back to ancient history. This is very recent.
However, some institutions were more open and lent more and more often to women. It was realized that, because women were more concerned and had a greater need for security, there were fewer bankruptcies among women than among men. We have gone beyond that first stage and women are now able to get the loans they need.
But today there are others who are experiencing the same stressful situation, namely young people. Our young technical school and university graduates are full of ideas. They are our wealth and they are prepared to start on a small scale. They no longer have this mentality of trying to get a job with large businesses or government organizations, since jobs are now very scarce in these sectors.
What do these young people full of ideas and initiative do when they graduate from university? They go to a banking institution. That institution will not ask them if they have a husband or a wife, but if they have a father or a mother. These young people go through the same process that we women went through, perhaps 10 years ago.
It is unfortunate that the process is so difficult. This is why we would like the bill to include a program giving access to credit to small and medium size businesses that would not otherwise have easy access to financing.
I referred to young people. I also want to talk about innovative businesses and ventures, several of which make it. If EDP businesses had been prevented from getting financing, we would not be near where we are now. At the beginning, it was considered risk capital, but then it was realized that, on the contrary, this was a solution for many. It is also risk capital in the case of innovative people such as weavers. Who will finance a weaver?
We want to give businesses the means to fund their working capital, so as to ensure their growth and development. Some businesses sell tires. It is a seasonal industry. They have a tough time maintaining their working capital. The same goes for the horticultural industry.
All these small and medium size businesses have fixed costs. They must modernize their operations, they have to deal with red tape, and they need accountants, legal advisors and other experts. These are all costs of doing business.
Finally, the little country girl in me would like to tell you that Quebec's Solidarité rurale has said that one job in a small rural riding is equivalent to 1,000 jobs in a city.