Madam Speaker, I have a couple of points I would like to raise under Group No. 2. One deals with some of the comments made by the hon. member from the Bloc who just spoke. The other deals with comments made by the government side.
Starting with the comments on the government side, members said they held their committee hearings, listened to people across the country and got a particular input from those people. But then later they said there were supplemental letters to the committee. I am not aware of these. I have seen what was presented at committee and I have not gone beyond that. In that committee many groups, including the Canadian Federation of Independent Business, specifically said they thought the ceiling on this was too high.
I go back to a time when I was on the transport committee. There was one particular blatant piece of legislation that I recall, the Canadian Transportation Act. On that we had a tremendous number of interveners from across this country, from one end to the other. A huge majority of them, in the 90% range, were opposed to clause 27. They were clearly against it and they went on at great length to explain why they were opposed to it. I made an amendment at committee to delete that clause which was so objectionable to so many people.
I found it incredibly interesting that not one of the government members supported that amendment to delete that clause of the bill.
When the hon. member from the government said that the Canadian Federation of Independent Business amended its position after consultation with its membership, I do not know if he misspoke but he gave a figure that less than a majority was in favour of a higher ceiling.
It is most curious that he used a figure of less than 50% because it automatically implies that more than 50% still wanted that lower ceiling.
The member from the Bloc made reference to how the Reform Party says the answer to this is lower taxes and lower salaries. She is half right, which is probably not bad on an average day. We certainly think there should be less tax. No one has suggested that people should get paid less as the answer to businesses making more profit. We would like to see people making more profit and able to buy more things which means they should have more disposable income.
We have for a long time been very clear about disposable income and the ability of a Canadian business to compete and to sell its products cheaper by all means, but not by cutting profits. Most cannot cut their profit as most of it has already been taken away.
I refer to the speech I made earlier today. I hope the hon. members listening were privy to that. I used an example of my being in small business just prior to being elected. I was in the construction business and the results of the increase of the CPP tax alone accounted for two of the eight houses I built each year; 25% of my gross profits, not for all payroll taxes, not even for all the cost of the CPP. This was just for the amount that this government was increasing it by, 25% of my gross profit, $12,000 a year.
I carry a dandy little device, a financial analyst calculator. While I was listening to the hon. member speak I pulled my calculator out of my briefcase and quickly calculated the $1,000 a month, which is what the government would have taken out of my pocket were I still operating my small business just for the increase in the CPP alone. I calculated the amount at 9% interest which is pretty nominal for a small business trying to get a loan these days. I amortized it over a 10 year period, compounded semi-annually, which is the normal banking practice. It would have required a loan of $80,000.
What we are saying is that the problem with this whole bill with its $250,000 limits, government guarantees and high ratios which we will get into in part three of this debate, is that it suggests we have to give more money and back up more. What we have to do is stop taking money away. I do not care if we are talking in terms of intent, in terms of how high a ceiling we should put on this or what ratio we should guarantee. The best way to help businesses is to stop taking their money. We should not be creating legislation that makes it easier for them to borrow money to give to the government.
As a small business operator, if I had to maintain my gross revenue income flow to pre-CPP tax increase levels I would have to go to the bank and borrow $12,000 a year. Over the course of 10 years I could take and amortize with interest a loan of $80,000. That is $120,000 with interest payments added up that my business would have to put out in order to come up with the money the government would take out of my pocket for the CPP increase alone.
The problem in this bill is not whether the whole ceiling should be lowered. It is the government's approach to the idea of what small business needs. It somehow thinks that it is all right to fix the whole problem in our economy by making it easier for business to borrow money.
We will repeat in each section of this bill that the true way to solve the problem for small business is to leave the money in that business.
I remember back in the late 1970s the banking industry decided this was a pretty vibrant economy and it could make tons of money by just getting businesses and individuals to borrow more. Contrary to what we have now where we have to go on bended knee and beg the banks to loan us money, in the late 1970s they were begging people to take it. Because it was so easy and they made it sound so great, people borrowed more and more.
They wanted to borrow $50,000 to buy a used machine they saw. They felt they should be able to borrow $125,000 and buy a new one. This was no problem. They would write a cheque right then.
That is what this government is leading people toward. The government has increased the cost to operate business then makes it easier for these businesses to borrow money. We get into a vicious cycle.
This government and Liberal governments in the past, all governments past, the old style politics of Canada operated by the two principal parties that have occupied this House, have often in many parts of Canada created a dependency on government. They have created that for businesses and individuals and they have created it for entire regions of this country. They created dependency for a race of people, a culture of people, through the Indian and northern affairs legislation and acts of that branch as well.
Now this government is trying to do it once again. This government is trying to get businesses on hook to the generosity, in its view, of the Liberal government through a loans program.
There is something wrong when the government thinks that the first thing it has to do is tax away everyone's money then turn around and loan some back. It will arrange to have some of it loaned back. The government will guarantee it. That is mighty generous of the government considering what it is really guaranteeing is individuals' own money. The government took the money from them in the first place. The amount the government stands to lose can be paid out of the CPP increase alone.
I think we should be lowering those limits. The majority of people who borrow money, the majority of businesses that borrow money, traditionally borrow on average far less than what we would like to see that ceiling reduced to, partly in response to many of the groups that spoke in committee. We think that is good.
The real way to solve the problem, which the government will hear a lot and I hope it sinks in, is that it will have to recognize that borrowing money to overcome oppressive taxes is not the answer to getting the economy going in this country again.
The government should deal with all businesses by ensuring that they get to keep some of that money in their pocket. Businesses earned it. It belongs to them. The government has not earned it. Unlike the thinking of the finance minister the money does not belong to the government.