Mr. Speaker, the Canada small business financing act deserves more scrutiny than what it will get and more critical comment that may not be listened to by the government as the bill proceeds through the House of Commons.
The motion we are discussing today by the member for Mercier is that Bill C-53 be amended on page 2 by adding in a new clause. Clause 2.1 states:
The purpose of this act is to increase the availability of financing of small businesses—
Where I start to wonder what is really meant by this amendment is when it states:
—which would not otherwise have access to financing.
What is a small business? A small business is simply an individual, a man or a woman, who has an entrepreneurial spirit, a spirit of being able to say “I don't really want to work for someone else, I want to work for myself and, as a result, I want to start up my own business”.
Small business is the backbone of a lot of our communities. As a result, we need these kinds of people, these entrepreneurs who will stand up say they can make it work.
There is no doubt that an entrepreneur who comes forth with a better widget, a better product, a new product that has never been thought of before, a service or an idea that needs promotion and development will need to access capital.
However, in accessing that investment capital his idea, his service, what he is thinking of, the job he may be wanting to put forward to create employment may not be good. As a result, when the entrepreneur goes in for financing from the normal sources or even from relatives or their own investment sock they may have put away, they may find that the financial institution or the independent lender says their idea is not good enough and they are not willing to finance it. What the financial institution may say to the entrepreneur is that their idea has little or zero chance of success.
It would seem to me this amendment is then going to state that where an entrepreneur has no chance of success maybe the government will step in and kind of make sure they do get financing.
The country is littered with empty plants, both small and large, where government has stepped in and said it is great to be producing this bottled water in Saskatchewan. There are magnificent magnesium processing plants in Alberta. Manitoba has certainly had its share of plants that started up, ran for a couple of years and then shut down because they were not viable.
We therefore have to be concerned when we see amendments like this which state that financing should be provided to businesses and entrepreneurs which otherwise have no access to financing.
When there are amendments and clauses in acts like that it is an open invitation to the government of the day to use the financing and guarantees of loans that are not economically viable or financially stable. It simply uses these special little sections to provide money to people who in lots of cases are looking to the government for support, and in return the government expects to get votes. That is why I have a problem supporting this amendment to Bill C-53.
We know that any time the government starts passing legislation it will cost money. Every act costs money. If it is not necessary or will not do the job it is meant to do then it should not be passed.
In this case financing a small business idea that is not economically viable and will not work is not where government should be priorizing its funding, or in the case where it does not put the money out directly where it guarantees the loan and ultimately ends up paying it off.
The cost of legislation can be seen in all manner of things that have been passed in the House in the last five years, probably even longer. I refer to the Firearms Act which this year is in the neighbourhood of $130 million plus the $200 million the RCMP is expected to come up with for a computer system.
The purpose of the Canada small business financing act is certainly not to support money losing businesses and ideas. The effect it has is to demoralize those business entrepreneurs who are making a go of it with a good idea and they see someone else have an unfair competitive advantage through government support.
The cost of government applies across the whole sector. At present we see small businesses near agricultural communities suffering because of the cost of government on the agricultural sector. Certainly it would help if the cost of government on agriculture were reduced.
I mentioned to the agriculture minister today that many of the user fees and cost recovery programs the government has instituted over the years could well be set aside, either suspended and/or terminated. That would leave more money in the hands of small businessmen like farmers. In essence they are small businessmen. As they spend and the money flows through the economy everyone would have more capital with which to start small businesses.
The costs to small business are the same as in agriculture. One could think of a hardware store or whatever in a small town. Some of the costs are applied to all business such as the GST and the employment insurance premiums that are taken off. In this case there is a lot more paid in than is needed to keep the fund going.
We see Canada pension plan premiums rising all the time and we end up in 20 or 30 years with a pension that is so small compared to what we invested that we should have just saved our money in the first place.
We see business and personal taxes so high they are killing investment. They kill the idea of a small business man or woman trying to get ahead. It may be financed to get the business started but if it is killed after it gets going with taxes, employment insurance, GST and all these onerous taxes, why bother starting it in the first place?
I do not support the amendment to Bill C-53. I suggest to the government that it look at getting out and reducing the cost of small business. That would have a lot more benefit than trying to finance some business that does not have a chance in the first place.