Mr. Speaker, I appreciate the opportunity to speak to the amendments to the legislation. I want to give brief consideration to why I am a little concerned about the legislation in terms of dealing with funding to small business.
When funding businesses government does not often look at whether or not the businesses are new or whether they will be in competition with existing businesses that have not had government funding. People who have worked very hard, made sacrifices over a number of years, and built up businesses in communities often find themselves suddenly confronted with a government subsidized business that is working in competition with them.
To the business person who has worked for a number of years to establish a business it does not seem fair that the government is subsidizing someone to actually work in competition with them in an unfair and unequal way.
One has to ask what is the priority of government in funding small businesses and what the parameters of the decision to fund them should be. A colleague of mine has put forward an amendment that no two people in the same family can apply for a loan for the same business. This shows that the legislation has serious flaws.
If a business cannot get funding from a traditional source and goes to a government source of funding, it would only make sense that it be very controlled as to the risks of the taxpayer. It should be quite obvious although not explicit that the government should show due diligence in making sure that there is only one loan going to a particular family business.
Another motion under Group No. 2 talks about the level of funding that should be available. The amendment is suggesting that the level of $250,000 as set out in the legislation is far too extravagant. It is too great of a risk for taxpayers to put funds into a business that cannot get funding through a traditional source.
I will expand upon that concept. We have banks. As a matter of fact we now have a commitment from two major banks to establish a single bank responsible for lending money to small businesses. They have committed a substantial number of dollars solely to funding small businesses. If I remember a comment made by the CEO of the Royal Bank not too long ago, presently only a portion of that funding is used. I believe the number he mentioned was something like 70% to 80%. This means that 20% of the funds put aside for small businesses has not even been lent out.
The people who are applying for support from a government agency for whatever reason, and generally it is because the risk is too great, have not been given funding from traditional sources. When we start asking taxpayers to risk a maximum of $250,000 per applicant we are asking them to put at risk a fairly large sum of money.
It is interesting that the average size of loans made under the old program was only $65,000. We have to ask why the government would feel it should raise the maximum loan amount from $100,000 to $250,000 when the average loan is only $65,000. It seems to me that the $100,000 was plenty. It allowed some discretion on the part of loans officer or the people putting together the finance package. It allowed them a considerable amount of support. The fact that most successful applicants only get two-thirds of it shows that $100,000 was adequate.
We have to question why the government feels it is necessary to amend the legislation. Why does the government feel it is necessary to put that kind of financial support behind small businesses?
Having been a small business person I do not want to say that the government has no role to play. However I am not convinced through my experience with community leadership. I watched governments fund industries that had no hope of success. The government ended up having to eat the investment in industries that had no hope of success. I have seen governments do the same with small businesses. I have to ask whether it should be an area of federal government involvement.
The government has no business in areas of responsibility where it is not needed. This is one area where we have private institutions, banks, credit unions and other areas where people can get financial help. If they cannot it is often because their proposal is not solid enough. Maybe individuals need to be encouraged to make sure their business plans, concepts and ideas are solid enough to make their own sacrifice and not look to the taxpayers to make a like sacrifice for them.
I have great difficulty supporting the legislation although some of the amendments proposed by colleagues, particularly the amendment limiting the number of family members who can apply for a loan and lowering or keeping the level at $100,000 instead of $250,000, gives me an opportunity to say I can support it to a lesser degree. I question whether the federal government would be satisfying more Canadian taxpayers and Canadians in general if it were to put that kind of money into health care, education and those areas where Canadians feel the federal government should put its dollars.
That is all I will say on the bill and amendments. I want to take a few minutes to talk about the government's response to debate on the legislation. It is deplorable that the government has chosen one more time to seek closure on debate. I question that in any democracy a government should have the right to say, because it does not agree with what we have to say, that it will not allow us to be heard.
It is shameful the government continues to use closure to limit debate and to try to minimize any criticism on the legislation it brings before the House. If it honestly feels that the legislation it brings before the House is good, it should not have any problem with people challenging and debating it. If the government cannot defend it in the House of Commons perhaps it should withdraw the legislation and come up with something that is better and meets the needs of the Canadian public.