I hear my colleague. I still feel young although a little older and wiser.
As I was saying, I had a car that was worth about $4,000 as security. The bank said to me “You will need your husband to guarantee this loan for you”. I think things have changed since those days in the early 1970s. However, I am not so sure they have changed enough to help young entrepreneurs or older workers who are starting businesses later in life and may not have a pile of money either to put into their business or put up as security. Or, they may be people like I who resented being asked to have my spouse as a co-signator. I felt I had the stature and the ability not only to look after my own business but to have a relationship as an individual with a lending institution.
While I admit that times have changed, it took me two years before I was able to secure a loan from a lending institution. By that time I was very grateful for my tenacity. I was sorry I did not know about this program. I now know it was in place then. I was so busy growing my business that I did not have the energy to keep fighting lending institutions.
Therefore I ended up financing my business out of my household accounts. I was fortunate to be able to do that. Many people starting businesses today should not have to juggle worrying about putting food on the table for their families and financing their businesses. Businesses with timely and appropriate access to capital are set up in a way that creates jobs for Canadians and contributes to their communities.
The story I told relates directly to why I am supportive of Bill C-53 which results from a comprehensive program and policy review conducted over the past year in private as well as with public consultations with stakeholders. It took into account the recommendations of the auditor general and the work of the Standing Committee on Public Accounts of which I was a member last year.
I will refer to the basic parameters of Bill C-53. It is important for business people or Canadians watching this debate to understand the types of things the government is doing to assist small business. Under the provisions of the act loans may be made by approved lenders for up to a 10 year term. Businesses will be able to borrow up to $250,000. We also know that there will be a one time up front 2% registration fee for lenders which can be charged to borrowers. In addition, lenders must pay an annual administration fee of 1.25%.
Bill C-53 is also a step forward in streamlining, improving and stabilizing the existing Small Business Loans Act. The key provision I wanted to point out is that the bill will provide authority for the Department of Industry to conduct audits to ensure compliance with the act and regulations. That is part of the accountability mechanisms I spoke about earlier.
For the first time it provides the authority to create limited pilot programs on a cost recovery basis on capital leasing and lending to the voluntary sector. That is a very important part of the bill. Organizations in the voluntary sector sometimes have difficulty in accessing the capital they need.
Today with computerization there is a need to upgrade systems, especially as we face the year 2000. As has come to be known, the Y2K problem is putting many public and private sector organizations in the situation where it is in everyone's interest for them to ensure they are Y2K compliant, that their computer systems are compatible, and that they have dealt with the problem posed by the year 2000 for all of us.
I believe that Bill C-53 will provide an opportunity that is extremely important for small business and entrepreneurs, as well as voluntary, not for profit agencies.
A very important provision of this bill is that there will be a program performance review tabled in parliament every five years which will be available for committee consultation. Rather than the sunset provision of the past, where automatically a program is sunsetted unless we keep it alive, this provision allows us to say that this is a good program. It has proved itself. It has been in place for 37 years. We have had it in place since 1961. It is now 1998. What we want to know now is, will this program on a continuing basis remain effective and relevant? If we can look at it every five years we will be able to make recommendations for change. This gives security to the business community. It gives stability.
Canada's small business financing act will provide an even more effective mechanism for government and financial institutions to share the risk of lending to small businesses. That shared risk is really what the essence of this program is all about. The federal government says to the major lending institutions in this country “We want you to do your part. We want you to support small, growing businesses like the ones in Markham, Vaughan, Concord and others in the great riding of Thornhill”. The federal government is saying “We want you to support those businesses. That is the way we grow jobs”.
Yes, it is important to have low inflation rates. Yes, it is important to have unemployment coming down. Yes, it is important to have low interest rates. Yes, it is very important to have strong fiscal management, a balanced budget and the kind of climate in which business can grow and flourish. But it is also very important for those small and emerging new businesses to have access to the capital they need.
While we are saying to the lending institutions that we want them to do their part, this Liberal government with Bill C-53 is saying that we are committed to doing our part. We are prepared to share the risk. That is what this bill is about. I support it on behalf of the riding of Thornhill and the many people who will benefit from this bill. I hope that all members of the House will join me in supporting this important and worthwhile initiative.