Debates of Nov. 24th, 1998

Canada Small Business Financing Act

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I am not outraged by the fact that the hon. parliamentary secretary is taking this opportunity to brag about the program. He is right.

As we say in Quebec, we do not turn up our noses on a good program. As my hon. colleague just indicated, many Quebeckers are using the program and want to be able to keep on using it, because it is a fundamental multipurpose program.

However, the program is not a cure-all. The statistics used by the hon. member do not invalidate the argument we made. What I was suggesting earlier is that the government guarantees on loans made by the banks to small business should be for businesses that otherwise would not have access to them through any other program. We would probably get the same statistics, but with the following difference. Instead of having banks use the program with all the guarantees currently provided by the government, help would be given to businesses who otherwise would not get assistance from any other program.

Yes, there are some shortcomings. The parliamentary secretary knows that these issues were discussed at length in committee. For existing businesses, there is the whole issue of working capital to consider. Several businesses have mentioned it. However, it is not addressed in this bill, because, since the government has decided not to support our amendment, working capital is not eligible under this program, and that is unfortunate. It is very unfortunate indeed, because working capital is very helpful during tough times, as the parliamentary secretary knows. It is crucial to be able to face tough times.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I am pleased to join in the debate today on Bill C-53, which concerns financing for small and medium size businesses.

I do so somewhat nostalgically remembering that during the government's first term in office I was Bloc Quebecois critic for industry, when it formed the official opposition. I was given this assignment by the leader of the official opposition, Lucien Bouchard, who now carries out his duties at the highest level in Quebec society with his usual talent and energy. His personal qualities are no doubt admired by all parliamentarians sitting in this House.

I recall great moments, I recall also the complexity of this industry, which is part of our daily lives, a highly complex and far reaching many faceted industry, the SMBs.

I would like to take this opportunity to pay tribute to my colleagues from Mercier and from Lévis-et-Chutes-de-la-Chaudière, who spoke earlier. They give heart and soul to the work on industry.

I would also like to thank them for their efforts in the area of research and development, in which we think the federal government—if I have grasped the problem—continues to treat business unjustly, especially business in Quebec, where brainpower is being lost through lack of sophistication, negligence or budget cuts to research and development, preventing Canadian and Quebec industries from maintaining their former position with respect to foreign competitors.

I am thinking of United Aircraft, in Longueuil, where there was a threat—settled now I hope—or a risk, of large numbers of the most competent employees losing their jobs to workers in the U.S. or elsewhere, because of the lack of Canadian government encouragement of R&D.

I would also like to mention the battle being waged by our colleague from Mercier on the Y2K bug. She has made a lot of people think. She has raised the awareness of a number of areas of activity about the dangers in store for us if we do not get our act together as far as informatics are concerned.

Where the Privacy Act is concerned, she has succeeded in making the Minister of Industry more aware of the fact that the disclosure of personal information is already well looked after in Quebec. This is no doubt part of our needs in this modern society, to ensure that corrections and refinements are made as required so that confidential information remains exactly that.

These are all examples of the fine work being done by our colleagues in the Bloc Quebecois in conjunction with the others on the committee. Industry is a very thankless area to work in, because there is rarely anything spectacular about it, but it does affect the everyday lives of the population.

When we speak of peoples' everyday lives, we cannot avoid mentioning small and medium size businesses. If there is one area where our communities can expect development, it is the area of small and medium size businesses. Each in its own way, in its own area of activity, they are at work, often in a very humble way, but they also have to be highly efficient because they do not have much margin for error.

I take this opportunity to pay tribute to all women and men who work in or run small and medium size businesses in my riding of Trois-Rivières, which includes the municipalities of Trois-Rivières; Trois-Rivières-Ouest; Pointe-du-Lac; Yamachiche, where there is an impressive small business called Dufresne et Fils, which does business all across the North American continent. In Louiseville, there are a number of very prosperous small businesses. In Maskinongé also, in the furniture industry. In Saint-Léon-le-Grand, Bergeron et Cie is active in the potato industry.

These are very prosperous businesses that are run well and responsibly. These are businesses that keep a close eye on the books, know where they are going, and know how to best use the resources at their disposal, including of course the Small Business Loans Act, which is of very great use to them.

As the hon. member for Lévis-et-Chutes-de-la-Chaudière said earlier, should Quebec achieve sovereignty some day, as I dearly hope, this is legislation that will probably serve as a model for Quebec. It is the outcome of a long process between the Canadian government and the business community to try to meet a specific need. It is to the credit of the federal public service to have initiated and maintained, since 1961 if I am not mistaken, an act as relevant as that one, which of course should constantly be reviewed, as was the case when I was the critic for industry. This is why I am somewhat familiar with the issue. This is a bill that is greatly appreciated by the business community. I can attest to that.

There is one criticism that is often heard about the administration of that act. Between 30% and 40% of the loans made by banks and lending institutions would be granted even if the act did not exist. This is a criticism about the act which I find rather petty.

We should not be criticizing the bill, as some members of the House would like to do, and claiming that, given the situation, we should perhaps be repealing the legislation or slashing the budgets involved to the point of ineffectiveness. What we should be doing is talking plainly about abuse of mandate. We should be talking about some instruction for officers in lending institutions who should not be using the legislation to serve their own interests.

If memory serves, the intention of this legislation is to have the government help offset the risk run by lending institutions. However if this becomes the rule, it goes against the spirit of the law. If there is no risk in making a loan, then there is no need to rely on the Small Business Loans Act with the government's guarantee.

As a member of the public and a parliamentarian using the forum available to me, I say that loans officers need to be told to respect the spirit of the law and to make loans when appropriate. When the loan does not represent a risk, then make it. That is one of the reasons we have banks.

Speaking of banks, and given the billions of dollars they make in profit, we could ask them to take risks, with respect to the social responsibility that is rightfully theirs.

When profits amount to $7 to $8 billion annually, when the Royal Bank made $1.8 billion this year, it should not be as hard as all that for the Minister of Finance or the Prime Minister to tell the banks to take a few more risks. It is obscene to want to make increasingly high profits and, to top it all, to use taxpayers' money to offset the risk when you are dealing with those you have a responsibility to deal with, which is to say those borrowing money.

I hope the government will change course and take the necessary steps to bring, through publicity and governmental influence—and we all know how much influence government can have when it wants to—pressure to bear on universities and financial commentators to ensure that banks and lending agencies stop misrepresenting and using for their own purposes the objective set out in this legislation, which is to reduce the risk, if any, incurred by the lender. However, when there are no risks involved, the lender should not be able, under this legislation, to avoid risk completely and have the government take on all liability.

The other criticism levelled at this legislation, one that has always annoyed me, concerns potential losses for the government.

Sometimes, businesses go bankrupt, and the risk incurred varies according to economic conditions, because the government guarantees loans up to 85%. The government then has to dig in the pot set aside to compensate lenders after a financial disaster. When this happens, we are tempted to say that the costs are too high, that the amount paid out of the contingency fund for losses is too large.

Vigilance must always be exercised, because public funds are involved. However, for that very reason, our approach should not be based solely on accounting but on public interest. It would then be clear that, while it may have cost so many millions or hundreds of millions of dollars in a given year, the program also generated so much economic activity. They helped create so many jobs and generate so much direct and indirect tax revenues. They also helped to promote certain economic activities that would not have come about if these hundreds of millions or tens of millions of dollars had not been lost.

If these issues are not taken into consideration, there is a link missing. One cannot use an approach based only on accounting if one wants to protect the public interest. When relying too much on an accounting approach, it is even possible, according to some kind of dubious logic, to wish for the total elimination of this fund, which would be disastrous in my view.

So, we need to emphasize not only the negative impact but also the positive effects of losing or risking part of the taxpayers' money.

We have to go back to basics. We have to follow the spirit of the law and ensure that the lending institutions lend the money when there are no risks involved but also that they have the protection they need to take a reasonable risk that they would not take if there were no funds to this effect. That is the spirit of the law.

I also want to remind the House of some statistics on what is being said about this problem. There are always interesting to review.

According to the Canadian Federation of Independent Business, 29% of small business operators claim that financing is one of their biggest concerns. The existence of this legislation and its orderly management are crucial to those who are the main engines of our economy, who help create and maintain jobs throughout Canada and Quebec, especially in the regions.

This is very important: 29% said that credit availability was one of their major concerns.

Close to 90% of SMBs said they find it very difficult, or difficult, to get credit at a reasonable cost, whereas only 10% said it was easy to get financing. This gives us an idea of the difficult context in which SMB managers operate.

Fifty-six per cent feel the small business financing program should only guarantee loans for those SMBs that otherwise would not have access to credit. This is another important point.

Some 80% answered that the Small Business Financing Act should also address working capital financing. This is the other thing I wanted to talk about.

For a long time now—as long as I have been in politics, which is a long time—we, in the Bloc Quebecois, have been saying that the Small Business Loans Act should cover working capital, which is often the Achilles tendon of SMBs. They have bills to pay, the accounts payable are not being paid and, when it drags on for too long, creditors get worried, they panic and get the bank on board. They pull the plug resulting in a lot of layoffs and all the economic and social consequences we know.

Knowing how difficult working capital management can be, including clearly defined measures in the legislation would provide a tangible and practical means to support economic development, especially regional economic development, through the small business sector.

I will close on a very positive note. I think the Department of Industry deserves credit for recognizing volunteer and non-profit organizations. I am thinking particularly about cooperatives which, from now on, will be able to benefit from the Canada Small Business Financing Act.

It is a plus, knowing how important the cooperative movement and the cooperative spirit have become, particularly in Quebec. Cooperatives will now have the additional advantage of being able to rely on the support provided through this important program. Let us just hope that the lenders will have an open mind in administering this legislation.

I remind members of the valuable role played by small and medium size businesses, both in Canada and in Quebec, especially in the regions, which, for the most part, could not survive without local economic development. Let us hope these small and medium size businesses will not suffer too much from the perverse effects of globalization, where more and more we see not only the concentration of capital, but also the concentration of businesses.

This is to say that decisions are increasingly made by select groups, too often by the same international stakeholders, who can change the rules of the game at will and put undue pressure not only on the countries themselves, but also on the continents.

There is a risk that globalization may become the globalization of misery, of misery that is all too prevalent in Africa and South America and that could reach us should governments yield to transnational corporations, which have recently exerted pressure to achieve that result. Let us not forget it because this directly affects our small and medium size businesses.

Transnational corporations are taking measures to give themselves even more power, quasi-political powers, against sovereign states. This was articulated in documents such as the Multilateral Agreement on Investment, which would have had eminently perverse effects on the whole economy. This agreement would have been a kind of charter of rights and freedoms for multinationals against sovereign states. In fact, what is required is an international code of conduct to ensure that, particularly in the environment sector and in developing countries, we put a stop to measures or to investments that worsen the situation and only serve the interests of shareholders. This is a shameful short term vision.

Rather what we need to do is to plan, discuss wealth distribution and business deconcentration, and help small and medium size businesses. There are too often people who are endorsed by sovereign states through the slush fund. We know how it works.

We also know that it will take a lot more intellectual discipline in the years to come—it is not over yet—and that we will have to support our local leaders, including industry people and the unions representing our plant workers, to ensure that society operates in a civilized and increasingly fairer way from a socio-economic point of view.

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

Mr. Speaker, I listened intently to the member. He has been valuable as industry critic in the past.

I listened to a number of items. One he mentioned was the contribution of members of the industry committee. Not only his party but all the parties debate intently and make a good contribution to the industry committee.

There was another item he mentioned that I would like better defined. I detected from the previous speaker's words that he would have hoped that the $250,000 limit would be reduced. We had a lot of discussion about this in committee but it was decided to maintain it at $250,000. Maybe he could clarify this item. Was it his hope that this $250,000 maximum be reduced or did I misunderstand his remarks?

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, off-hand I do not recall mentioning a $250,000 ceiling. What I might have said is that I wanted, should there be any losses—which is perfectly normal since capital provided through the Small Business Loans Act is venture capital—that we look at the possible social and public interest benefits of the defaulted loans instead of coldly referring to them as losses.

In the end did the community benefit? Let just say that one year the losses amount to $55 million in loans of $10,000, $15,000, $20,000 or $30,000, at the end of the day have they not created activities bringing the unemployment rate down, generating so many millions of dollars in direct and indirect taxes, and giving rise to more economic activities all around, thus improving the situation in a given community?

This is what I mean by an approach that goes beyond numbers and is more global, more socioeconomic. This is what I meant.

[Yvan Bernier, Bloc, Bonaventure—Gaspé—Îles-De-La-Madeleine—Pabok, QC]

Mr. Speaker, I made a few notes during the speech by my colleague from Trois-Rivières. His time in industry served him well. There is, however, one point I would like to return to. It is a principle of politics that, if we keep hammering at it, we might make the members opposite understand.

[An hon. member]

That takes time, sometimes.

[Yvan Bernier, Bloc, Bonaventure—Gaspé—Îles-De-La-Madeleine—Pabok, QC]

It is true, it takes a long time. I would like to give the member for Trois-Rivières the opportunity to speak more on the notion of working capital in the management of our small businesses.

I have in the past headed a business assistance centre in the Gaspé. I have also worked in business. Insufficient working capital was primarily what prevented businesses from expanding so they could carry out their contracts. It is also one of the causes of bankruptcies, as I have been seen, because people used their working capital to acquire equipment like a new truck or a lift truck to speed up the handling of their merchandise.

People were working to improve their business, but they were forced to use working capital to make this sort of purchase.

We could expand SBLs to include working capital. In certain cases, instead of financing a business based on 85% of its assets bought as collateral, the government could finance them at the rate of 100%. The lender could give the borrower the following advice: “You are buying a lift truck because you want to increase sales and improve your bottom line. However, for this asset you are buying for, let us say, $100,000, should you not be borrowing $125,000, because you will have to wait a little longer for your accounts payable, because you will have more of them?”

This is an idea I put to you and I ask my colleague to expand on it a bit or to bring me back down to earth if I am dreaming.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I thank my colleague, the hon. member for Bonaventure—Gaspé—Îles-de-la-Madeleine—Pabok for his question. We can see that he is already very comfortable with this matter and has probably had more business experience than I.

This is not a subject of discussion every day, but I do know that this is an Achilles' heel for many businesses in difficulty because they have, let us say, “misused” their working capital. This fund, which should have been used to pay off their debts after taking into consideration the money coming in as accounts receivable, is sometimes used to make investments. The banks and financial advisers have a very important role to play in this regard.

It is a question of education. Perhaps it is overly optimistic to think so, but it might be good for lenders to use the SBLA to encourage entrepreneurs to make more use of industrial commissioners, more use of the services of the Quebec department of industry and commerce, or those of Human Resources Development Canada, which has excellent financial advisers. These people can guide entrepreneurs' choices and orientations as required.

In my former job, I saw someone expand his plant using his working capital. This was probably done out of ignorance, not bad faith, out of enthusiasm on the part of an entrepreneur in a rush to get things moving. People do not have time to fill out all sorts of forms, to ask advice, to find out whether the financial institutions have any funds set aside for this purpose. Care must be taken not to be too hasty, because that is often the way to get into trouble.

In my opinion, there is no magic recipe. Progress must be slow, must involve education. Before decisions are made that could affect the survival of a business or its rate of expansion, the right advice must be given and the right choices made.

We cannot go any further. I invite the people at Industry to look at the fact that working capital will always be a very sensitive aspect of a business' operations. If the government can help employers, entrepreneurs, to find solutions or to feel more secure about this concept, this will be good for our communities.

[Odina Desrochers, Bloc, Lotbinière, QC]

Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-53 at third reading. This bill means a lot for regional economies. It means a lot for my riding.

During the next few minutes allotted me, I will share with you the information I gathered in my riding, as an elected representative, mostly from people who came to me to ask about small business financing. I will also quote liberally from the Mackay report. At the present time, we are deeply involved in consultations on the future of Canadian financial services.

As public accounts critic, I will also draw the attention of the House to some extensive quotes from an auditor general report tabled in December 1997. That report was about an inquiry on the management of small business loans.

To start with, I will briefly summarize the Bill which is intended to amend the small business loan program. This program is geared to businesses with gross annual revenues of up to five million dollars.

One of the objectives of the bill is, and I quote, to “increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses”, by allocating between the lenders and the department the eligible losses incurred in relation to loans of up to $250,000 granted to such businesses and for those purposes. This bill is needed for the economic wellbeing of all regions in Quebec and throughout this country.

I will now deal with the key points of Bill C-53.

The government will continue to be liable for 85% of the losses on loans not repaid, the rest being the lender's responsibility. Financial conditions and fees remain the same. The bill provides for the continuous operation of the program subject to a comprehensive review every five years. It limits the department's aggregate contingent liability to $1.5 billion for each five-year period. The bill also authorizes the department to conduct compliance audits and examinations. The lender must exercise due diligence, as provided in the regulations, in the approval and administration of loans.

That summarizes Bill C-53.

I would like to explain briefly what is at stake in this bill. As I said at the outset, this bill is most important for small businesses, and small business are crucial in our economy. Bill C-53 concerns also employment and productivity issues.

During all election campaigns, in various economic summits and meetings dealing with regional economy, the importance of small business for the economy is always emphasized.

Let me just quote a few figures. In 1995, when we had our last recession, SMBs with fewer than 100 employees accounted for 99% of the 935,000 businesses operating in Canada, employing 42% of private sector workers and paying 38% of all salaries.

On the same subject, I also want to mention that SMBs are a major part of the regional economy, particularly in my constituency of Lotbinière where, as is the case everywhere else I am sure, the SMBs are the main job creation motors.

In my constituency, SMBs offer a wide range of quality products, particularly in the town of Plessisville now considered as an important leader in the manufacturing of metallurgical products. Plessisville and its SMBs are well known in the province, in Canada and in the world, but there are also other important areas in my constituency where a number of SMB operate. I would like to mention a few of them: Daveluyville, Princeville, Bernierville, Laurier-Station, Sainte-Croix, Saint-Appolinaire, Sainte-Agathe and a number of other municipalities where many SMBs are at the centre of the economic vitality.

This is the interesting part as far as the small businesses financing is concerned. But many small businessmen in my constituency, as in any other constituency, are equally interested in establishing a SMB. However, financing often put an end to their projects. There are many interesting and innovative projects out there, but no money to realize them.

I would like to come back to the importance of small business financing, an issue that was widely discussed this fall with the proposed merger of four important banks and the release of the MacKay Report on the future of financial services. So, the financing of small and medium size businesses has been the object of lots of discussion.

Everywhere across the country—and I had the opportunity to go on a tour that took me out West, to Alberta, as well as Toronto and Montreal—we promoted small and medium size businesses. Associations, even the Canadian Federation of Independent Business, expressed their concerns with regard to access to credit for small businesses in an environment of financial services restructuring.

Very early, our political party has been in the forefront. First, at a special caucus meeting held on September 9, we took the time to listen to the positions of each financial institution, including the four which are involved in a merger project much talked about in the press. The Bank of Montreal and the Royal Bank are quite open in promoting their projects, and the same can be said for the Toronto-Dominion Bank and the CIBC.

As I was saying, at everyone of these meetings, the issue of small business financing was discussed and much time was spent talking about this sensitive issue.

I would like to state what is precisely our party's position on the financing of small businesses. On October 26, we tabled an official paper, presented by my colleague for Saint-Hyacinthe—Bagot, where he summarized our party's position in the current debate on the MacKay report dealing with the future of the financial services sector. Obviously the issue gives rise to strong discussions. It matters a lot to our party.

It says:

Throughout the debate concerning the financial sector's reorganization, the final objectives must always be kept in mind, namely:

1) ensuring increased competition by stronger Quebec and Canada institutions, then with the help of new international players, better serving consumers and businesses.

2) increasing the industry's capacity to compete internationally to ensure its continued contribution to the economic growth as a job creation engine.

This approach, inspired by recommendations of the MacKay report, would allow these objectives to be attained.

As we can see, economic growth, job creation and small business financing are still questions that are discussed at the table and we are trying to find solutions to help those people.

The report goes on:

We support the MacKay report's suggestion that a follow-up mechanism, preferably within the Parliamentary structure, should be established to measure the impact of changes made in the financial sector's regulations on competition, institution service fees, jobs, credit access, transparency and services in rural regions—

When we say that we also want to ensure access to credit, whether for consumers of for small business, the Bloc Quebecois is always there and stand by small businesses because they are an essential tool for job creation.

The subject of the bill before us today was discussed at length in the auditor general' report tabled last December on the administration of the small business loans program. In his report, the auditor general, Mr. Denis Desautels, highlighted the importance of small and medium size businesses. In his introduction, he mentioned the major contribution of the small businesses to the Canadian economy.

According to this report, in 1994, more than 98% of all businesses in Canada were small businesses with fewer than 50 employees. In 1996, one out of two Canadians were employed by a small business.

In his report, the auditor general had this to say:

Small businesses play a very significant role in our economy. In many regions of Canada, they are at the heart of economic activity and community development. In addition, they sometimes develop into large firms of the future. Small businesses contributed 43 percent of Canada's private sector economic output in 1995.

In his introduction, the auditor general continued his analysis of small and medium size businesses and addressed the issue of financing. He said:

Management experience, market access, availability of financing, application of technology, and fiscal and monetary policies are all important factors that contribute to the success of small businesses.

Financing, however, is vital for a small business, particularly in its early years. Typically, the initial capital comes from the owner or from family and friends. Much of the additional equity comes from the earnings of the business. The other significant source of financing is through borrowing, primarily from the chartered banks, caisses populaires, credit unions and trust companies. The lack of financing on reasonable terms and conditions has often been identified as a significant barrier to the growth of small businesses.

He also pointed out that:

Governments in industrialized nations have traditionally played an important role by offering financing and/or guarantees to improve access to capital, with the objective of creating jobs and stimulating economic growth.

He was referring to the small business loans program, which is among the initiatives taken by the federal government to reach its objectives. This program was established in 1961 and has undergone major changes in 1993. At that time, changes in the act were aimed at relaxing the eligibility criteria, increasing access to financing and reducing personal guarantee requirements.

Two years later, in 1995, other changes were made in order to reduce the percentage of financing allowed and the ratio of loss sharing, to charge annual administration fees and to increase the maximum interest rate.

The auditor general, still with regard to the management of the small business loans program, mentioned that the small business sector had been the subject of many recent studies.

These studies on the small business sector showed that some action to assist them had to be taken at any cost. In 1994 a committee produced the report “Growing Small Businesses”. The working committee on small business created by the ministers of finance and industry and including small business representatives overcame the difficulties.

The report highlighted the important challenges facing small and medium size business. One of these was obtaining the proper financial support to expand. Given the many problems at the national as well as international levels, a small business often has to expand rapidly, but, without the necessary financing, it must turn to the banks for venture capital. Banks do have an important role in our economy. One thing they should do is support SMB initiatives.

The working committee recommended a series of initiatives to provide a sound basis for small business growth and development.

I now wish to make a few comments about Bill C-53. They say many improvements were made and the federal government has taken into account some of the auditor general's well-founded recommendations.

Of all those recommendations, the following were incorporated. First, the limits of the program are better defined to avoid abuses of the system. The bill provides for reducing the interest paid by the government.

A reporting system has been introduced to ensure some accountability to Parliament. But, as we can see, the auditor general made many recommendations that were not taken into consideration by the Liberal government. It ignored what the committees who studied this matter had to say. In particular, it ignored the amendments or the suggestions made by our party.

These are encouraging pilot projects, but they do not go far enough. This bill gives numerous powers to the minister, which is typical of our friends across the way. When they have the privilege of reviewing legislation, they quickly lay their hands on everything. The ministers are trying to control everything but unfortunately, now and then, they interfere with provincial jurisdictions.

The minister took advantage of the review of this act to grab increased powers without any real checks and balances. It is not difficult to understand. The minister grabs power, controls, but there is no mechanism to correct these abuses.

The industry critic for the Bloc Quebecois talked about this problem in September 1998 in one of the numerous speeches she made on this issue. The technical clauses in the act have now been deleted. The minister will be able to make whatever regulations he wants.

Part of the regulations needed to be modernised. Everyone agrees on that. However, our hon. colleague from Mercier told us there was a serious problem, in that the bill does not include the whole range of provisions.

On Bill C-53, the Canadian Restaurant and Foodservices Association also explained to the Standing Committee on Industry that some major changes introduced were to be found not in the act, but in the regulations. The most important, without a doubt, was the exclusion of existing leasehold improvements. I was speaking earlier of expansion. So, in the restaurant industry, when there is a need to expand, they start by modernising and expanding the premises.

Finally, I can say that the Bloc Quebecois is in favour of Bill C-53. I also point out that the financing of small and medium size businesses is important and is one of the major sources of development in each of our regions.

I support this bill, although I would have preferred to see certain changes.

[Stéphan Tremblay, Bloc, Lac-Saint-Jean, QC]

Mr. Speaker, I would like to make a few comments because setting up businesses and entrepreneurship are issues of great importance to me.

Before becoming a politician, I took a course on how to start up a business. This program was designed to help people with business ideas to get ahead, help them to develop a business plan, seek financing and, finally, help them reach the crucial stage, which is the setting up of their business.

The various stages of setting up a business are quite important, in my opinion, and I am familiar with them. Furthermore, it was one of my favorite themes, mainly on the regional level, when I entered politics.

I represent the riding of Saguenay—Lac-Saint-Jean, a region which has been greatly developed by big business. Even nowadays, we are still very happy that big business has decided to reinvest in our region. The largest private investment project in Canada and in North America is located in Alma, in my riding.

Sometimes, it is said that the uncertainty chases investors away. But it can truly be said that it is not the case in Alma. A very interesting partnership has developed among several stakeholders, namely unions, people who contacted the plant, etc. It is a real breath of fresh air for us, but I still say that we should not rely solely on big business for regional development. We should diversify our economy. The establishment of small and medium size businesses can play a major role in job creation.

In fact, this is what I am still doing. I encourage people in my region to try to set up their own business. If the economy is going well, it is even easier for SMEs to develop very precise niches in order to meet the needs of big business.

This is undoubtedly an avenue we should encourage as much as possible at the regional level.

A few weeks ago, I was at the gala of the Haut-Saguenay CFDC. In that area, people are working very closely together. In very small municipalities, the establishment of one or two businesses can make an enormous difference for the local economy.

In Alma, which is at the eastern tip of my riding, we set up a single window office one year ago. For many potential small businessmen, the difficulty is to get to know where to access know-how and financing. People do not know where to go to get technical and financial support. We have therefore created a single window office where every potential small businessman can get advice.

Everyone in this House is in favour of job creation. I certainly want to see jobs created in the Saguenay—Lac-Saint-Jean region. As my colleague, the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques said, the best way to distribute wealth remains job creation. In this respect employment remains a matter of dignity for every individual. It is therefore extremely important.

What does it take to start up a business in order to eventually create employment: highly specialized skills, research, development, technical training, marketing intelligence, market research, distribution, production and sales? In the end, when the products or services are marketed, jobs will be generated.

As we can see, there are several stages in the job creation process, and small business people can appreciate the problems associated with starting up a business.

That is not all small business is about, and this is a debate we take to heart, especially as it relates to diversity. It is often said that small is beautiful. Small and medium size businesses often succeed in finding very specific opportunities in very specific markets. That is the beauty of the market economy. It has been criticized by many people today, starting with myself. I do blame on the market economy a number of current trends, including the trend to merge companies. Businesses tend more and more to merge, and it seems that this tends to kill diversity.

Small businesses are bucking this trend. They bring diversity and healthy competition to the economy. This is good for everyone.

When I talk about mergers and I look ten years into the future, I sometimes wonder where this will lead us. It often reminds me of the game that taught me capitalism, the game of Monopoly. Everybody starts off with the same amount of money, but the player who succeeds in buying everyone else's property as the game progresses is the winner. These are things we must think about in our economic system.

Starting up a business requires considerable resources. One method I recommend is the blending of knowledge, expertise, ideas and money. Two years ago, I designed a program aimed in that direction, because I knew perfectly well that, normally, it takes a business idea to start up a business. Not everyone has business ideas.

One needs to have business acumen, and this is something that needs to be demystified. It is estimated that 10% of the population has some business acumen, which means that they want to expand their horizons and want to be their own boss. Taking on such a responsibility is not for everyone.

I think we need to bring together people who have business ideas with people who have some business acumen and, of course, people with money problems, and that brings us to the very heart of the matter, which is the financing issue. When starting up a business, money is everything and one of the biggest problems is the financing, which is addressed in this bill.

When the hon. member for Mercier brought this piece of legislation to our attention, I thought it important to consult with businesses back home who probably had had dealings with the Small Business Loans Program.

It could be useful to potential business owners to know that the purpose of this bill is to increase the availability of financing for the establishment, expansion, modernization and improvement of—

[The Acting Speaker (Mr. McClelland)]

I regret to interrupt you, but there are only two minutes left for questions and comments and I am sure the member for Lotbinière would like to comment.

[Odina Desrochers, Bloc, Lotbinière, QC]

Mr. Speaker, the long speech made by my colleague, the member for Lac-Saint-Jean, shows how sensitive most of my colleagues and I are to the issue of the importance and vitality of small and medium size businesses. Be they established in the Lac-Saint-Jean region, in the Lower St. Lawrence region, in the Gaspé region, or in my riding, Lotbinière, in the heart of Quebec, they are all important.

The Lac-Saint-Jean region has benefited much from Alcan. However, if we want to create jobs now, if we want to rebuild the social fabric, the collective fabric of each and every one of our regions, we must count on small and medium size businesses.

Frequently, a small business with ten or twenty employees will allow a small community to survive. How many times have we seen a community lose a school? But the arrival of a new investor who created jobs and made possible the coming of new families can allow a community to survive. It is a part of Quebec's history that must be preserved.

I believe that this heritage depends on the creation and survival of our small and medium size businesses.

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

Mr. Speaker, I am pleased to take part in this debate at third reading on the Canada Small Business Financing Act.

When the time comes to amend a piece of legislation such as this that has been around for several years, care must be taken to ensure that it will meet the existing as well as the future needs of business.

It was in this perspective that the member for Mercier and the member for Lévis in particular analysed the bill, and that we proposed amendments and suggested improvements in order to ensure that the Canada Small Business Financing Act will allow small businesses reliable access to financing so that they can be competitive.

Today and tomorrow, new businesses that are created will have to keep pace with international competition. This is just as true for those starting up as it is for those expanding. They must be able to keep pace with international competition, have core financing that will give them a solid base on which to grow, to sell their goods outside the country, to export, to compete globally.

This requires flexibility in terms of businesses' accessibility to financing.

Does the bill before us meet this requirement? I think that the amendments to the initial bill represent interesting technical improvements.

In my view, the Bloc Quebecois has offered constructive criticism of the bill and proposed amendments that we feel would have made it that much better. There are questions to be asked, however. Will the bill help meet the needs with respect to preparing and launching a business, consultant services and business expansion? Considering all these questions, there is still room for improvement.

I would like to speak to that as a member of parliament. I have now been a member of parliament for five years.

Almost every week, in my constituency, at least one person comes to us with a business proposal. A new generation of entrepreneur is born. Some people are fully equipped to launch a business with management training, technical skills or engineering diplomas.

But there is a new type of entrepreneur, people who do not necessarily have all the needed tools to manage a business. I mean young people, women, the 50 to 55-year olds who face a basic change. They were always salaried workers and all of a sudden, their business closes and they have to adjust, to be flexible and to face new situations. They often come to us because they have a hard time finding the right place to go for adequate financing.

This is particularly true of women. This is something that strikes me at home. Women who want to go into business run into the system's negative, paralysing aspects because all the financing rules were set by men. When women have a project, they need to be a little better in order to get financing.

In the proposal under consideration, I would have liked the government to take even more responsibility and to find a way to avoid cold financial calculations done by computer in which the borrower is told: “This is our business loan software. If you fit our profile and if you have some extra money, we will give you a loan”.

But the situation is sometimes different with new products, as we saw in the last few years. I recall the case of a young entrepreneur from my area who wanted to produce an electronic tuner for musical instruments. A hi-tech device like that cannot be developed in three weeks. It takes time and money. It took almost one year to develop the project and we were looking for support. We checked all existing programs. It was not easy. That young man and his family had to invest time and money. The bill could have made it easier to start up this kind of business. In this case, the entrepreneur had a solid technological background.

Just last week, I saw someone who wanted to open a specialized butcher shop in my region. Because of his background and past experience, this man did not have easy access to credit. How can someone get their foot in the door so they can receive the help and direction they need to bring their project to fruition? Our new businesses expect their lenders to provide financial advice as well and to support them through their growing pains.

The bill before us today includes many provisions that reflect the experience of the past 20 or 25 years. However, the government should have had an even more open attitude.

The member for Trois-Rivières alluded to the social mandate that financial institutions must have. In Quebec, we had an interesting experience with the development of lending tools such as the Fonds de solidarité des travailleurs. Our caisses populaires have tempered what I would call the more mechanical aspect of the banks' operations, thus helping create an attitude different from that of the banks themselves.

When I first came here in 1993, Liberal members had a lot to say against banks and they wanted to revolutionize the way banks were doing things. Liberal members have been procrastinating since then. They have played along with the current system. But there was a concrete reality. In Ontario and in the other English speaking provinces, the competition created in Quebec by the Fonds de solidarité des travailleurs, by the caisses populaires and by the other forms of assistance did not necessarily exist.

Competition generates quality. Quebec had more lending services, and this promoted a more open attitude among banks and lending institutions.

I believe the changes to this piece of legislation reflect the influence of the model developed in Quebec. Interestingly, some elements of it, but not enough, can be found in the legislation.

We must look at the issue beyond this bill. Our financial institutions might give themselves a time frame so that, if within the next five years we do not see more openness on the part of banking institutions, we will use a more stringent approach. This could have been included in the bill.

Another tool we can use to this end is community reinvestment. In this respect, the hon. member for Hochelaga—Maisonneuve introduced a private member's bill based on the experience in the United States, which responds to what we are experiencing today as revealed by the poll of financial institutions conducted by the member for Mercier. In order to have solid arguments to present in favour of this bill, and to find out what people really thought, the Bloc Quebecois consulted the population.

We found that credit availability is a major concern for 29% of small business owners. According to our poll, 89% of SMBs said they find it very difficult, or difficult, to get credit at a reasonable cost, whereas only 10% said it was easy to get financing.

There is a need. Certainly our respondents may be the ones who ran into the most obstacles. Often the ones who do not run into obstacles have fewer tales to tell. But the facts are there. Many companies are experiencing difficulties with competition these days. There is competition everywhere. A company needs to always be sure that the required products can be provided in time, that they are quality products, and that they can be distributed and sold.

Businesses run into all manner of obstacles. The situation is far different from what it was 10, 15 or 20 years ago. At that time, markets were nearly all domestic, within either the economic space of Quebec or the economic space of Canada. Today, markets are world-wide.

In the La Pocatière region, maple syrup producers are making direct sales by Internet to Japan, China and just about everywhere else in Asia. This is a new trade reality. When a business seeks a loan, the banks need to understand that a large building is no longer necessary as collateral; an idea must be acceptable. This is not easy for banks to understand. This is one factor to consider in the present situation.

The other factor I wish to address is processing. Will this bill allow businesses to obtain the necessary credit? Sometimes the person creating a processing business is already a producer, a producer of natural resources, or a farmer, for instance, producing vegetables or working in a food processing sector. And now he must make the transition from producer to processor. Not everyone is born with these abilities.

He must therefore determine what technical skills he will need, whom he should have as an ally. He has to be ready to accept an inflow of capital other than his own money, so that his business can grow.

Of course, all of this happens in regions without a lot of people. New markets have to be found. When we meet these people in our riding offices, we realize that funding requirements are always a big concern of theirs. It is always an issue.

We can also get frustrated when we have to deal, in our offices, with people who have what appear to be very worthy projects and we try to understand why banks are turning them down, we try to support them throughout the process and we find out about some of the problems they are facing.

The small business loans guarantee program improved over the years. It has had its ups and downs. All sorts of situations have arisen.

In the vast majority of cases, care must be taken to ensure that the program really provides investment assistance. I have a bit of a problem with those who state that businesses do not need this guarantee to start up. But this must also be viewed from another angle: without this loans guarantee program, most businesses could not start up, could they?

In our regions, jobs are created by small business, that is small and very small businesses. These are sometimes businesses with one, three, four, five or ten employees, which will operate for years with this limited staff.

Owners must also act as the finance director, production director and marketing director, and they must wear all these hats at the same time, while meeting governmental bureaucratic requirements. They require some flexibility as well as access to assistance. The Small Business Loans Act is the kind of tool through which such assistance can be provided.

Will the bill before us give our businesses more ready access to loans? It addresses many interesting topics, including capital gains. I also think there will need to be some kind of tacit agreement between financial institutions and governments with regard to the new attitude of openness to allow projects to be carried out.

Earlier, we talked about opening this program to non profit organizations. That is an interesting advantage. In our society, we have witnessed the development of different types of businesses. There are capitalistic type traditional businesses where one entrepreneur starts up the business. But there are also other kinds of businesses such as cooperatives, in Quebec.

For example, some twenty years ago, on the northern shore of Lake Témiscouata, a group of foresters formed a company that belongs to all of them, but from which they do not get individual. This situation combines the advantages of a company with those of a cooperative.

These organizations should be treated with an open mind by the financial institutions they do business with. If a financial institution asks “What sort of organization do you represent? You do not fit in with our institution”. Well, that is not a plus.

At this point in my presentation, I would like to say that this bill is part of a much larger system in which a problem of lack of competition in providing financing was noted. Before any talk of amalgamating banks, we should make sure there is more competition in our communities.

In Canada, and especially in Quebec, banks have already cleaned things up, with some going a long way. So, in some places there is nothing more than the National Bank or a credit union. There is not a lot of enthusiasm for the amalgamation of the big banks, but there is for more services in our regions from the ones that have remained. Their remaining and the fact that they have developed financial products should inspire our confidence.

If they could diversify their product and in so doing provide a lot of opportunities for those needing such financial services, and if legal changes are made, 10, 15 or 20 years from now we could see the emergence of this sort of financial holding and people will say “That is a good thing. There is more and more competition and service opportunities”. This is how progress is made.

It is important to consider the Small Business Loans Act while keeping in mind that there are also other tools available. In that context, the Bloc Quebecois will be pleased to support the bill, even though it would have liked to see its amendments accepted. As we know, we often have to keep trying in this world. A number of arguments were put forward. The main one provides that we must make sure that loans to businesses are not simply granted under a purely mechanical and arithmetical approach. We must be able to include other considerations.

When a person with a good idea comes to get financing, he or she must feel that the financial institution has an open attitude, that it is not only concerned about the guarantee on the loan, and that it provides true advice to achieve the best possible results.

In a few years, we will look to see if, indeed, it might have been possible to give even more leeway to our businesses. This would ensure that everywhere, and particularly in rural areas of Quebec and Canada, we would have the necessary tools to develop quality businesses that are able to go and sell their products all over the world, while also meeting domestic demand.

I hope that once this bill is passed, we will not forget that there is still room for improvement. In the meantime, the changes that have been made will ensure that small businesses are better served.

[The Acting Speaker (Mr. McClelland)]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Halifax West, Volvo Canada Ltd.; the hon. member for Regina—Lumsden—Lake Centre, Canadian Farmers; the hon. member for Winnipeg North Centre, Health; the hon. member for Madawaska—Restigouche, Social Insurance Numbers.

[Louis Plamondon, Bloc, Richelieu, QC]

Mr. Speaker, I would like to congratulate my colleague, who has just spoken so eloquently to this bill. It is a bill that has concerned all Bloc Quebecois members in recent weeks. A number of attempts to improve the bill met with failure, but I think the government is now aware of the Bloc Quebecois' arguments.

As for the substance of the bill, it has been pointed out that it is a small step forward, but that there is room for improvement. The member who spoke before me mentioned financing and the difficulty obtaining it, especially for businesses wishing to restructure and for those interested in exporting in the rapid new format know as the Internet.

When he mentioned the Internet, he gave as a example the maple syrup producers in his riding. I know that my colleague, the member for Saint-Hyacinthe—Bagot, also has many producers in his riding, as do I. This is an example of the kind of production that now relies more on the Internet and that needs much quicker and more effective financing in order to be able to meet the constantly growing demand, particularly from Asian countries.

What could be included in this bill in order to meet the needs of this new way of structuring businesses as well as help the new enterprises, which must conduct business more rapidly and need more rapid and better structured service and support?

I would like my colleague to expand a bit on this.

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

Mr. Speaker, I thank the hon. member for Bas-Richelieu—Nicolet—Bécancour for his comments and question, both of which strike me as very pertinent.

I started my presentation by saying that legislation on small business loans has to be able to meet not only today's needs, but tomorrow's as well.

The question of the Internet came close to home for me, because a number of people have come to my office with such projects in past years, when the Internet was just starting out. Financial institutions and development agencies had to be educated about it. Now, more of them, the Mouvement Desjardins in particular, are open to this new way of doing business. When guarantees are involved, there is more consideration given to the quality of an idea than to the size of a building.

A new and particular sensitivity is needed. There must be assurance that a bill like the one before us now contains such provisions. I believe it contains some interesting elements as far as the regulations the department will be introducing and the attitude of the financial institutions are concerned.

As time goes by we will see whether financial institutions have indeed met expectations, because this bill left room for a choice. As was done at one point in the past, we could have tried making it very coercive, forcing businesses into a far more open attitude. They were given the chance. Players were given a chance.

But this does not mean they should take advantage of this to kill people's spirit of innovation. When novel projects come along, they must be given proper consideration. Such matters are not necessarily resolved by legislation, either. It is a question of making our financial institutions open minded, and I think they have succeeded in doing so to some extent.

However, I would caution the House and all Canadians that we will not fix the problem necessarily by creating huge financial institutions. People need access to financial institutions they trust and where they get proper service, especially a variety of choices.

In this regard, a lot of effort is required, which does not necessarily relate to the Small Business Loans Act, but which is related more to all the other financing tools available to business, whether we are talking about insurance schemes or other forms of loans. Some experiments have been made.

A look at the accomplishments of the workers' fund known as the Fonds de solidarité des travailleurs in the area of new technologies, for example, reveals fantastic development. This is a union federation that was created with the help of the Government of Quebec, which provided an initial shot in the arm. This investment fund today has grown beyond the stage of protecting traditional jobs. It invests in new technology sectors and internationally to promote growth in developing and developed countries, but with the view that the jobs created there are the highest paying technical jobs.

I think this openness should be encouraged to spread. I say to the member for Richelieu that I think in 10 or 15 years those open to these new ideas will permit our businesses to take root throughout the world. These business will have penetrated several markets because somewhere, at the right time, a bank or credit union manager will have been open to a new idea, and interested in supporting it and helping the business start up.

We should not think that 75 years ago Bombardier was what it is today. It was not born a giant. It started with a creative man who had a good idea, was very tenacious, and brought it to fruition. Later he was followed by people who developed it even further.

But to do so, they needed financial assistance from individuals with an open mind. For every success story like this one, there are graveyards full of projects that failed, not necessarily because they were not good, but because they were not viewed with openness and did not receive the support they needed.

I believe that today by passing the Small Business Financing Act we are giving a helping hand to businesses and the economy in our regions. It is up to them to take advantage of it.

It is up to them to make the best of it, to make sure they know how to use it well. If within two, three or five years, we realize financial institutions are not open enough, we will have to have the guts to correct the situation, and fast. In economic terms, two, three or five years is a very long time. One must have the courage to move very fast, to take the required corrective measures.

Hopefully the bill before us today will meet today's demands as well as demands over the next few years.

[Yvan Bernier, Bloc, Bonaventure—Gaspé—Îles-De-La-Madeleine—Pabok, QC]

Mr. Speaker, my hon. colleague has spoken very passionately.

I will try to quickly summarize what the hon. member has said. In my view, the measures set out in this reform of the Small Business Loans Act, contrary to what it says in the preamble, do not increase the availability of financing. They only straighten out some administrative rules.

To ensure that businesses understood the good news, I think it would have been better to tell them about the way macroeconomic impact could be measured.

I hope there is enough time left for my hon. colleague to expand somewhat on this.

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

Mr. Speaker, I agree with my hon. colleague.

The message sent when the amount was not increased is not the most positive message that could have been sent out. I hope the government will take a responsible approach and ensure that diversification of the availability of financing comes through clearly in the decisions to be made in the next few weeks or months about the regulation of financial services. The framework of the Canadian banking system should be completely overhauled.

Our only goal should not be to please the banks, which, under the current system, think that mergers are the only way out. Let us climb back up the hill to get a better view of the forest and ask ourselves if it would not be better for the future to change the whole regulatory framework to allow for great competition. In a new regulatory environment, mergers may not be the best option available. Each of the stakeholders will benefit from the new solutions that will be brought forward.

[Stéphan Tremblay, Bloc, Lac-Saint-Jean, QC]

Mr. Speaker, it gives me great pleasure to address Bill C-53, the Canada Small Business Financing Act.

The purpose of the bill is to increase the availability of financing for the establishment, expansion, modernization and improvement of these businesses by allocating, between the minister and lenders, portions of eligible losses incurred by lenders in relation to loans of up to $250,000 to such businesses for those purposes.

The government will continue to be liable for 85% of the losses on outstanding loans, with the rest being the lender's responsibility.

It is essential that this program designed to help young entrepreneurs be well understood. It provides young or potential entrepreneurs looking for financing with the necessary guarantee or backing to secure a bank loan.

You just go to the bank and, if you do not have a house to offer as collateral, the federal government will guarantee up to 85% of the amount borrowed up to $250,000.

This bill ensures that the SBLA program will remain unchanged. For those who used it in the past, there is hardly any change. We in the Bloc Quebecois take the matter seriously because we know for a fact that small and medium size businesses play a pivotal role in creating jobs. That is why we did not take this lightly. We went so far as to develop a questionnaire that we distributed to businesses. That is what I did in my riding of Lac-Saint-Jean.

I wrote to all the businesses in my riding that had availed themselves of this program for small businesses. Who would be in a better position to tell us whether this program is efficient or not?

That is why businesses were asked “In view of your own experience and what you have seen, would you say that it is easy, difficult, or very difficult for small businesses to get financing?”

Some 87% of people in my riding say it is difficult or very difficult. We know that money is the lifeblood of any business that is just starting up. And we are being told that it is still difficult to get money.

We then asked whether businesses know the SBLA, and, if so, whether they think it should be improved. No less that 98% of respondents said it should be improved. That is a telling tale.

Here is another question we asked “Do you think loans should be granted for working capital as well as for equipment and capital and movable assets?”

This is an rather important question, because we know for a fact that working capital is crucial for a business that is starting up and that the lack of it can have dire consequences. Some businesspeople end up having to put up their personal assets as collateral, which is not always interesting.

Eighty-eight per cent of respondents said that the loans should also cover working capital.

The next question was “From your experience and from what you see around you, do you think the development of small and medium size businesses would be easier if they had greater access to credit at a reasonable cost and to management counselling?”

Of course, following the same logic, 96% of respondents said it would be easier.

The last question was: “Would there be fewer bankruptcies if businesses had greater access to credit?” Ninety per cent of respondents said yes, there would be fewer bankruptcies.

I want to thank the respondents, the entrepreneurs of my riding, who helped me with these questions. It really helped me see things more clearly. I had also sent them a few questions on the proposed bank mergers, an issue of interest to everybody.

Earlier, my colleague from Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques talked about the social role of banks. Banks and other lending institutions have an extremely important role in that if they reject the application of an entrepreneur, it means that it will be difficult for that prospective business to become a reality. So there are very important issues at stake.

I feel strongly about Bill C-53 because I, myself, took a course on how to start up a business. After a first career in aviation, I wanted to do what a lot of people were doing, that is to start up my own business. So I decided to take a course on how to start up a business in order to have a good knowledge and understanding of each and every step of that process. There are several of them.

Everybody agrees, and we heard it many times, that small and medium size businesses are essential to job creation. Right now, unfortunately, large businesses are not the main creators of jobs. We see a lot of large business mergers which, in most cases, result in a significant number of layoffs. I say in most cases because we have the statistics to prove it. Fortunately, things are always different in my region.

In the Lac-Saint-Jean region, we have the new Alcan project, which is worth $2.6 billion and will be the largest private investment in Canada and even in eastern North America. It is a major project that will secure the existing jobs and create about 250 new ones. All of this will of course generate economic activity.

Before entering politics, I had started the process of launching a business. I did not complete it, of course, since I entered politics. That business is somewhat different, but there are similarities. I made small business one of my hobby horses, because I feel that regions like mine, the Saguenay—Lac-Saint-Jean region, which was developed mostly by large companies, should nevertheless diversify their economy and trust the entrepreneurial potential of their citizens to create employment. We will never have enough.

In regions like mine, as in all remote areas around the world, people are leaving. If we could start small businesses of our own and thus create jobs, it would be great, because that is what everybody wants. I will always remember the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques saying that the best way of distributing wealth remained the creation of jobs.

But how are jobs created? Governments often suggest that they will create so many jobs. But who creates these jobs directly? This is clearly the work of those in the field, provided of course that they have the necessary resources and assistance. This is where it becomes important to show solidarity as a community and to provide young entrepreneurs with efficient tools. By “young” I mean new entrepreneurs because, as my colleague pointed out earlier, many people who retire in their 50s want to start their own business. So, this is very important.

There is a basic fact about entrepreneurs that we must understand: not everyone can start a business. According to the psychological profiles that were developed, between 10% and 15% of the general population has the entrepreneurial potential required to start a business. This is extremely important.

The number one prerequisite is entrepreneurial potential, followed by knowledge, skills or services targeting a specific market niche, to ensure that there will be a market for the new small business, which will be creating jobs. Funding is also required, of course. It is an essential element, especially for young entrepreneurs who, more often than not, do not have a house to offer as collateral against a loan and who do not necessarily receive money from their friends and family. So, financing is still extremely important.

The bill is interesting because it maintains the current Small Business Loans Program which, I remind the business people back home, helps the entrepreneurs who do not necessarily have the money, the car or the house to put up as security to get a loan guaranteed at 85% by the government.

So, this is an extremely interesting piece of legislation. However, from a constructive point of view, I think the bill could have further increased the availability of financing for small businesses. It could also have helped businesses with their working capital, in that the loans could have been used as working capital. This is what the businesses in my region told us in a poll.

In a nutshell, this is a good bill and we will vote in favour of it. But there are still some provisions that could have been improved.

[The Acting Speaker (Mr. McClelland)]

It being 5.15 p.m., it is my duty, pursuant to order made Monday, November 23, 1998, to interrupt the proceedings and put forthwith every question necessary to dispose of the third reading stage of the bill now before the House.

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Acting Speaker (Mr. McClelland)]

All those in favour will please say yea.

[Some hon. members]

Yea.

[The Acting Speaker (Mr. McClelland)]

All those opposed will please say nay.