Debates of Nov. 24th, 1998

National Defence

[David Price, Progressive Conservative, Compton—Stanstead, QC]

Mr. Speaker, yesterday the Minister of National Defence said that he is asking his cabinet colleagues for more money to give our soldiers the quality of life they deserve.

My question is for the Minister of Finance. Does the minister understand that the men and women who serve this country in uniform need his help? Is the Minister of Finance listening to his colleague and will the Canadian forces receive the quality of life they deserve?

[Art Eggleton, Liberal, Minister of National Defence]

Mr. Speaker, I just returned from Honduras where the men and women of the Canadian forces are providing terrific service in a humanitarian way.

I have been to Bosnia. I have seen them patrol areas where otherwise ethnic cleansing would occur. I have seen them operate in the ice storm and during the floods.

They do a great job for Canadians and they deserve our support. They deserve a far better standard of living.

Information Highway

[John Harvard, Liberal, Charleswood—Assiniboine, MB]

Mr. Speaker, the government often has pledged to make Canada the leading electronically connected country in the world. In that regard I want to put a question to the Secretary of State for Science Research and Development.

What is the government doing to ensure that western Canadians have the very best possible access to the information highway?

[Ronald J. Duhamel, Liberal, Secretary of State (Science]

Mr. Speaker, just a few weeks ago the Alberta library, in partnership with Industry Canada, made an announcement whereby 200 new Internet access sites will be established throughout the province of Alberta.

This is part of a tremendous achievement, making Canada the first most connected country in the whole world, led by Industry Canada. This will provide community information centres. It will provide technology training. It will provide jobs for young people. It will permit Albertans to be additionally connected to Canadians, indeed to the whole world. This is great stuff.

Unemployment

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, you ask a stupid question and you get a stupid answer. Today StatsCan—

[Some hon. members]

Oh, oh.

[The Speaker]

I am not sure which question the hon. member was referring to.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, today StatsCan issued a scathing indictment of this government's job creation record. It said that since 1989 the government has given up 228,000 full time jobs and that the only job growth has come from part time employment and the self-employed.

What is the big reason? The big reason is high payroll taxes.

When is this government going to get the message? When is it going to obey the law and cut EI premiums by $7 billion? When are they going to wake up over there?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, now we know that it was his question.

The fact is, as the hon. member knows, employment increased by over 57,000 new jobs in the month of October. As he also knows, over 321,000 new jobs have been created this year alone, and over 1.5 million jobs have been created since we took office.

When we took office the unemployment rate was 11.5%. Today it is 8.1%. That is the lowest rate in over a decade.

Steel Industry

[Benoît Sauvageau, Bloc, Repentigny, QC]

Mr. Speaker, the steel industry in Quebec and Canada is facing very serious problems as a result of the financial crisis in Asian countries and in Russia.

To clear their stocks, these countries are selling their rolled steel at a price that is lower than what it costs to produce, which clearly represents an unfair dumping practice.

My question is for the Minister for International Trade. What does the minister plan to do to stop this unfair competition, given that this industry generates nearly 200,000 direct and indirect jobs in Canada?

[Paul Martin, Liberal, Minister of Finance]

Mr. Speaker, as the hon. member is no doubt aware, steel companies have raised the possibility of putting a motion before the international tribunal to make this kind of import stop, in which case the government is certainly prepared to help further the process.

Veterans Affairs

[Gordon Earle, NDP, Halifax West, NS]

Mr. Speaker, Canadians who served Canada in the merchant navy are not getting any younger. In fact, they are dying at a rate of about 12 per month. Justice delayed is indeed in this case justice denied.

The minister has indicated he will meet tomorrow with the merchant mariners. Will he commit today to use that occasion to seek a positive resolution to the compensation issue of concern to these merchant navy survivors?

[Fred Mifflin, Liberal, Minister of Veterans Affairs and Secretary of State (Atlantic Canada Opportunities Agency)]

Mr. Speaker, as the hon. member knows, I have met with these veterans before and I will meet with them tomorrow. No decisions have been made. I am there to listen.

Presence In Gallery

[The Speaker]

We have two visitors with us today. Let me first draw the attention of members to the presence in our gallery of the hon. Sada Samake, the Minister of Territorial Administration and Security of Mali.

[Some hon. members]

Hear, hear.

[The Speaker]

I would also like to draw to your attention to the presence in the gallery of the honourable Maynard Sonntag, minister responsible for post-secondary education in Saskatchewan.

[Some hon. members]

Hear, hear.

Points Of Order

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, I rise on a point of order to seek unanimous consent of the House to table the labour force update I made reference to in question period.

[The Speaker]

Is there unanimous consent?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-53, an act to increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses, be read the third time and passed.

Canada Small Business Financing Act

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, as a member of the Standing Committee on Industry and as regional development critic for the Bloc Quebecois, I am pleased to speak at third reading of Bill C-53, which deals with small business financing.

This bill is not perfect and we think it should have been improved through, among other things, the main amendments proposed by my colleague from Mercier and myself, on behalf of the Bloc Quebecois, in committee and in the House at report stage. Our amendments dealt mostly with access to working capital and greater access to capital for borrowers in the voluntary sector, which is more and more referred to in Quebec as the social economy sector, and not only, as the government proposes, in the form of pilot projects that are yet to be established in accordance with the minister's wishes.

Of course, we are not opposed to the idea of pilot projects, but we think it would have been preferable to include directly in this bill provisions that would have made this type of financing or loan guarantees available to borrowers in the voluntary sector, or social economy sector.

The main reason we support this bill is that the small business owners we consulted do want this loan guarantee program even though, as I said earlier, it should have been improved.

The hon. member for Mercier, myself and the other Bloc Quebecois members would have appreciated it if the industry committee, on which we both sit as full members, had conducted a more thorough assessment of the issue of financing for small businesses, if it had evaluated all the programs provided by the various stakeholders. According to the people I consulted, there are some 100 assistance programs—not just lending programs, but all sorts of programs—and entrepreneurs do not always have time to get familiar—so to speak—with each of these programs.

Sometimes, when a program is described in a booklet or some other type of brochure, we realize that the funds are no longer available, that the structures have changed or that the programs themselves have changed. It is difficult to face that situation.

We also think that the Standing Committee on Industry, or the Department of Industry itself, should conduct a macroeconomic impact study. This means it should not merely do an audit as suggested by the auditor general, but also a financial audit of lending institutions, as the government intends to do. Given the various programs that are in place everywhere, it would be appropriate to see their actual impact, for example on a region's economy.

We would have liked to know the impact on competition. It is all well and good to grant a loan to a small business, but under what conditions and what about its impact on the business across the street?

We must also look at the impact on the region's economy. Will there be an impact or not? Right now, we are under the impression that the department does not have the tools to properly evaluate the impact of these projects.

When we agree to provide help in the form of a guaranteed loan, we must consider the multiplying effects. Do these effects go beyond the business itself? It is often said that the effects are more significant in certain areas.

For example, it is said that, for every dollar invested in the tourism industry, the benefits are multiplied by four. The same goes for the export sector. Nowhere in the bill is this taken into account.

We must also consider the number of jobs and not only the number of new jobs. Maintaining existing jobs may be quite a feat for a small business that has to modernize its equipment to remain competitive. If it does not go through this modernization process, it may have to reduce the number of jobs or even to close down. Therefore, maintaining jobs is often very important.

We must look at the number of jobs, and I think that should be the first criterion, but we must also look at the kind of jobs. Are they quality jobs? Are we helping a business that, in the short or medium term, would only provide minimum wage jobs? If working conditions are not very good, maybe we should take a closer look at it.

Not only do we have to think about the number of jobs, but we must also realize that well paid jobs with good working conditions are good for the workers and their families. When there are quality jobs in a region, jobs that have an impact on the economy, people have more money in their pocket. They spend more and they invest in the local economy. That is the kind of indicator we must look at, the impact on the community.

When all regional economies are doing well, so is the economy in Quebec and Canada. For some Quebec regions, this would mean losing fewer of their young people. The hon. member for Lac-Saint-Jean often raises the issue of young people moving to major centres. Members from eastern Quebec also raised it, as did those from the Atlantic provinces. This is insane. Something has to be done to keep our young people in our regions.

I personally come from eastern Quebec. I later moved to the Quebec City-Lévis region, a very beautiful region, and I do not regret this decision. However, had there been job opportunities in my native region 30 years ago, I would probably have stayed. I would have chosen to stay home, if only because I knew the place well and felt I belonged there and because of my family ties. Yet I had no choice but to leave.

The eastern Quebec phenomenon had been looked into under the ARDA initiative and by the QPDB at the time. When business owners see young people leave, they wonder whether it is a good idea to keep investing in developing their business while this exodus is taking place. It is no longer the case, but I am trying to show that small businesses are important to rural regions. Unfortunately, they are few and far between. In the Lac-Saint-Jean region, they have big businesses, such as Alcan, but in regions like the Beauce or the Chaudière-Appalaches region, which is my new home, small businesses are the engine driving job creation. In fact, they account for nearly all new regional jobs created, hence the need to make financing available.

The less unemployment there is, the less social spending there is. This may seem obvious, but it is good to point it out. The more employment there is, the more collective wealth there is. The more collective wealth increases, the more property values increase, and the happier business people are. This is called development and it goes without saying that we, in the Bloc Quebecois, who defend the interests of Quebec and its regions, support any program that helps small businesses develop the regional economy.

When I first heard about the review of the Canada Small Business Financing Act, my initial reaction was to consult the local development board, a permanent body in my riding, to get its opinion on the small business loans program, the SBLP. It told me it supported that program. Why? Because, according to the development board, this is one of the best known programs, if not the best known. It has remained stable and it is the simplest one to administer. It is a basic program that allows any business in any sector to have access to financing.

Consequently, it is often the program most used. It is a multipurpose program and it is known by banks and caisses populaires in the regions. I do not want to get involved today in a debate over bank mergers, but we are all aware that there are concerns in remote or rural areas that major bank mergers may decrease the number of financial institutions and thus the access to financing in their communities.

Businesses are, therefore, greatly attached to this program. It must be pointed out, however, that it is more costly than other loan programs, 3% higher than regular loans. Nevertheless, it is an extremely popular program, and one that is in demand. Despite its popularity, I have been told by the LDB in my riding that people would like access to this program improved.

Is this program as accessible as it seems to be? The banks tell us that it is. Bank representatives who appeared before the industry committee told us that it was an accessible program and that it was working well.

I invite hon. members to consult the statistics the banks compiled, but an examination will show that they apply only to completed applications. When businesses are consulted, however, we learn that in certain communities many people wanting to set up new businesses do not complete their application. They get discouraged, or are discouraged by certain financial institutions who tell them that their business is not all that viable.

Incomplete forms are not included in the statistics, so it is easy to say that there is a highly satisfactory success rate among those who go through the process and meet all conditions and criteria. But if those who do not follow the process through to the end were taken into consideration, we would end up with another kind of statistic.

The Canadian Federation of Independent Business made us aware of this problem by saying that, contrary to the view expressed by the banks, financing was not so accessible.

We, the members of the Bloc Quebecois, made aware of this problem, wanted to go a little further and so we conducted a poll in our ridings. In my own riding, I sent a questionnaire to all businesses I had an address for, and 84 of them returned it.

The first question was “In your experience and from what you see around you, would you say it is easy for a SMB to obtain credit at a reasonable cost easily?” Only three businesses or 3.6% said yes. Thirty-six businesses, or 42.9%, said it was difficult, and 45 businesses or 53.6%, said it was very difficult.

The next question was “Are you familiar with the Small Business Loans Act?” Only 34.5% of businesses indicated they were familiar with it, 65% were unfamiliar with it.

Then they were asked “Do you think that the federal government should guarantee loans only to SMBs that could not obtain them otherwise, even though they represent a reasonable risk?” The response was 70.2% in favour, 22.6% against, and 7.1% refusing to answer.

The next question was “Do you think loans should be given as well for working capital—and this was one of the amendments we proposed—and not only for equipment and assets and real property?” To this question, 92.9% responded yes, and only 6% were opposed.

Another question was “From your experience and what you see around you, do you think SMBs previously had greater access to credit at a reasonable cost and to management advice?” The response to this question was unanimously yes.

And, if that were still the case, “Would there be fewer bankruptcies?” We received an affirmative answer from 86.9% of respondents.

Overall, nearly 97% of those polled said it was either difficult or very difficult for small business to secure a loan at a reasonable rate; 43% believed it was difficult and 50% believed it was very difficult. Sixty-six per cent of those who responded were not familiar with the legislation. More than 70% agreed that the federal government should guarantee only loans made to small businesses that would not get one otherwise.

The bill also deals with access. It does not merely deal with small business financing but, as the title specifies, it is an act to increase the availability of financing to small businesses. Since the word “increase” is used, the purpose of the act is therefore not to reduce availability, as requested by members of the Reform Party. They want it reduced, and if they had it their own way, they would even have it eliminated; they would let the chips fall where they may, in order words let the stronger survive and the small and the weak die out.

We could not disagree more with the attitude and position of the Reform Party in this respect. While the bill is not perfect or ideal in any way, there is a need for such a small business financing program through guaranteed loans. It does meet a need. Tat is why, at third reading as before, we support this bill.

We figure that, if it agrees to some improvements today, the government may eventually agree to do more. That is our fondest hope.

I notice that the Parliamentary Secretary to the Minister of Industry, who sits on the same committee as I do, is listening. He has a background in industry. He supports economic development. I know that, by repeating certain arguments, we may succeed in convincing him, and let us hope he, in turn, will succeed in convincing his colleagues, particularly the Minister of Finance, that we need legislation to help small businesses, and businesses in general, create jobs.

I would like members to remember one key word from my speech. I know that the member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques, who will be speaking after me, will agree with that. He keeps talking about employment insurance and the problems facing the unemployed. We both know that one good solution—and in some cases the only solution for young people and for people with years of professional training—is starting up a business. It is often the only way to earn a living. I know my colleague will agree with me that helping small and medium size businesses is part of the fight against poverty. That is the purpose of this bill, and that is why we must support it. However, it must not be the only program available.

As regional development critic for the Bloc Quebecois, I would like people in each region to get together and use the best tools available and to adapt them to their particular situation.

Once again, this bill is not perfect, but it offers enough flexibility and versatility to meet many needs. That is why we support it.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup—Témiscouata—Les Basques, QC]

Mr. Speaker, thank you for giving me the floor in this debate at third reading, after the magnificent speech by the member for Lévis-et-Chutes-de-la-Chaudière. He and the member for Mercier made several constructive suggestions for improving this bill.

I would like to ask him a question that I think is a very important one today. In our regions, we have seen the emergence of a new type of entrepreneur, men and women who were not necessarily trained in the same way as former small business owners. Very often, these are people who have been told that they have to create their own job.

Will this bill create sufficient interest to allow this new generation to emerge? Did we not propose amendments that the government should have retained? I realize that, overall, the bill at least introduces technical improvements, that it corrects a certain number of flaws, but is there not more that needs to be done?

Should the government not move as quickly as possible so that this new generation of entrepreneurs, who are not necessarily the most outstanding, those that act as quickly as possible, that have the necessary training, because we are asking them to create their own jobs, to start up and run new businesses, can benefit? They often have an important impact, particularly in rural areas.

Does this bill give us the necessary tools? Does the federal government seem to have a sufficiently open attitude to allow small businesses in rural areas to develop their projects and create two, three, four or five jobs, which make the difference between an up and coming community and one that is losing steam?

Can the member for Lévis expand on this?

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I will answer yes to my colleague, there are possibilities.

He mentioned one amendment we moved, but which was defeated by the government side. I will explain what it was about, because it is not obvious at first sight.

Why not limit this program to businesses which otherwise would not have access to loans from financial institutions? I stress this point because it could be tempting for a bank or a credit union, seeing the possibility of using this program, to use it to benefit businesses that provide guarantees. There is an annual $1.5 billion limit for Canada as a whole, that is a limit on the total amount of the loans, not on what this program is costing the government. This is not what the program costs.

If banks and financial institutions were to finance businesses which could otherwise have access to financing, they would not have enough money left to finance those business people my colleague mentioned, who want to set up their own business and who might pose a greater risk.

In my opinion, this guaranteed loans program should be aimed at those who are in a certain risk category, who might have a cash flow problem for instance, but who show potential for innovation, who have just completed some kind of training, who have ideas, energy and youth. Such a loan could give them a start in life, in business and help them succeed.

We presented this argument and although our amendment was rejected, I believe that by debating it today we might convince the people opposite, the minister and his officials to look at it some time in the future. They could adopt it and see that it is implemented through the regulations.

This is the reason why we, in the Bloc Quebecois, are in favour of this legislation. Although the bill's objectives are worthwhile, it is often the regulations themselves that make it possible to realize them.

If we take things seriously, and I want to take them seriously, it means that, when we propose an amendment, we are assuming that somebody who is listening to the debate or who will read Hansard tomorrow will say “this is a good idea that is worth considering”. That is what we hope when we speak in the House. We are not only trying to pass the time.

This bill deals with a fundamental program that provides access to financing for a large number of businesses in Canada and in Quebec. I may be a sovereignist, but I still think this bill is a positive measure. As long as we Quebecers remain within the federal system and send part of our taxes to Ottawa, we have the right to benefit from that system.

[Walt Lastewka, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I listened to the comments of the member for Lévis-et-Chutes-de-la-Chaudière and I know of his contribution to the industry committee.

I want to remind the member, and I will read only a couple of the items, that over the last five years the Small Business Loans Act was involved in 68,250 loans worth $4.2 billion in Quebec. The Société d'aide au développement des collectivités in 2,001 loans invested some $82 million with the SMEs in Quebec. That helped create or maintain an additional 20,045 jobs. I should also bring to the attention of the member that since 1993 the business development bank was involved with some 7,878 loans worth $2 billion which was carried out through the 18 branches in Quebec.

Does the member not believe that as a result of these various programs, the entrepreneur in Quebec has various different avenues to look at to help a new business get started or to help a new small business expand? I would like his comments on that.