Madam Speaker, I would like to first of all set the record straight. I am very pleased to support Motion No. 6. It would in effect change the bill to ensure that the borrower would assume at least half the responsibility and the government or the lender the other half, which is sponsored by taxpayers. Right now it would be 85% to the lender and 15% to the borrowing. I suggest it should be an equal partnership if they have enough confidence in their own business plan when they come forward for that loan.
More important, I want to set the record straight with respect to Reform's commitment to small business. I think it is very important. We believe very strongly in small businesses and are a great defender of them. I think we would just go about it differently. We think it is very important that we provide small businesses immediate tax relief. We also want to make sure they have decreased payroll taxes as opposed to putting money into this small business loans program.
The initial legislation, as everyone well knows, would provide $1.5 billion to small business loans programs. I think there are other ways we could do it than again through government subsidies for businesses. I think there are other ways that would be more beneficial.
We could look at capital gains tax. Now the tax rate is 75%; perhaps lowering it to half that. There are other ways to attract investors, other ways for people to get money, without taking it out of the pockets of taxpayers.
This motion would decrease the liability of the lender or the bank down to 50% from 85%. That would make sure the person who is wanting to borrow this money would have enough confidence that they would assume liability for half. That is not a lot to ask when we are using taxpayer dollars.
Again, if the borrower is liable for only 15% of this loan, what kind of confidence do they have in their business plan to ensure that it will be viable and not be a burden on the taxpayers?
Small business is the economic engine which drives this country. We in the Reform Party believe that. We recognize that. In fact, 75% of our caucus are small business people. We believe very strong in that. But government subsidies are not the answer.
We have the government again giving out $1.5 billion for small business loans programs. But with incredibly high payroll taxes and incredibly high bureaucracy it is just not working. It is our job as legislators to create an economic environment where small businesses can succeed. Right now they are struggling through extremely high levels of bureaucracy, red tape, forms, paperwork and the list goes on and on. They are buried in it from all levels of government.
Again I would argue there are many other ways that we can help small business. Make no mistake, that is one of the principle objectives of the Reform Party of Canada. We believe strongly in ensuring that small business has an economic climate where it can succeed.
Unfortunately this small business program is just throwing money at it and hoping the problem will fix itself. I would argue that is not going to happen. I can never imagine in the private sector anywhere where anybody could borrow money and only be at a liability rate of 15%. They would be laughed at. The banks would absolutely laugh at them anywhere else in the private sector.
So assuming 50% liability, if a person has the confidence in his or her business plan, I would think what would be quite reasonable and would have been an excellent amendment to this legislation, equal partnership between the lender and the borrower in the liability of that loan.
I encourage all members of the House to support this Reform amendment to create an equal partnership. We need, more important, to move away from government subsidies and take away that liability on the taxpayer. These are high risk loans. The default rate is very high with taxpayer money. It is not our money. It is not our money to do as we please with. The people who send us here hope we will use tax dollars wisely. It is not that we would not invest the money in small businesses. We would do it different to ensure that they were getting the help they need.