Mr. Speaker, I am pleased to lead off this debate on third reading of what we in the government believe is an extremely important piece of legislation which will help small businesses right across Canada, including farming operations and any business defined as a small business with revenues lower than $5 million a year. It is not really that small a business. From my perspective and in the community that I come from $5 million a year in productivity would be seen as a fairly successful business.
It is important that the government define small business. We recognize the significance of the small business community in terms of job creation, economic growth, exports, leading technology, new IT inventions and entrepreneurship. All of the aspects of life in this great democratic country that we live in are really encapsulated in the definition of small business.
If we think in terms of what our young people are going to do 10, 15 or 20 years down the road, many of them will have opportunities to start their own small business. Many of them will work within a small business atmosphere. It could be in the insurance industry, in real estate or in the automobile industry. Small business is like the river flowing downstream. It springs out of all of the major industries that exist in our country.
There have been many concerns raised recently by members of the automobile dealers' association, for example, and we would class many of them in the small business category. Whether or not they could benefit directly from the Small Business Loans Act may be questionable since their main requirements are in the area of high ticket inventory. They need to have their own financial arrangements in many cases with either the banks or their in-house financial institution. If we think of the spinoffs from an automobile dealer as an example, they can be in parts, add-ons and after market products that are available in the community for people who want to upgrade.
The same can be said of the housing industry. We may think that a developer in a community like Mississauga may not be classed under this definition as a small business.
Granted, they deal in hundreds of millions, at least tens of millions of dollars in gross revenue. However, spinoffs occur every time there is a development approved, every time there is a subdivision approved and every time a single home is built.
It is this government's response to the spinoffs of those businesses to make capital available through new leasing arrangements, through capital lending, through various access points within the Small Business Loans Act. That is probably the number two concern of small business in this country.
The number one concern would be human capital and the lack of properly skilled individuals. For instance, if someone talks in terms of the construction industry, they would be concerned about the lack of human capital available in the trades.
People today tend to think their sons and daughters should all become doctors or lawyers, or maybe even parliamentarians one day.
I have a 23 year old at home who will be taking an apprenticeship job as an electrician. That is wonderful because he will probably save me from electrocuting myself somewhere down the road.
Being an electrician is a terrific opportunity for a young person. It could lead to the establishment of a small business or it could lead to that young person working within another small business with an entrepreneurial flare and an entrepreneurial spirit.
This bill, frankly, is designed to help those companies which will create those jobs.
We mouth platitudes ad nauseam in this place, particularly when it comes to our youth and our small businesses. However, no one can deny that the future of the workplace is very uncertain for a young person coming out of school, either leaving school before graduation or graduating from school.
If government has one responsibility, I would submit that it is to create an atmosphere that is positive for business to work in harmony with labour so that they can create the jobs and the value-added products that are needed to make this an even more successful economy.
We can do that in many ways. One way, I submit, is by providing an instrument such as a small business loan, a guarantee to the financial institutions.
We tend to indulge in the art of bank bashing with some regularity, but the reality is that 55% of the capital made available to small business comes from our main large banks. Why do they do it? They do it because it is an opportunity to put something back into the community and also because, in the case of the Small Business Loans Act, they have the guarantee of the Government of Canada.
The way it works is that somebody has a small business that they want to start up. There is criteria that must be met. There are business plans that must be filed and submitted.
Frankly, this is a process I find extremely helpful, having gone through it myself in the past. There are programs such as the former new ventures program that came out of the province of Ontario. Other provinces in Canada I am sure have had similar types of programs available to assist business.
In the case of the new ventures program, it was a top-up. It was a matching of $15,000. It was not a lot of money, but maybe enough to put that business over the top in terms of its financial requirements. That $15,000 had to be matched by the actual owner, or the applicant in this case.
The reason I bring this point up is that if someone was successful at completing the business plan required to qualify for a new ventures loan, if the person could actually get through it and still wanted to go ahead, chances were they had a reasonable chance of success.
The same thing is true with the Small Business Loans Act. Bill C-53 simply improves that situation by making access to capital somewhat easier. It is important, in my view, that the word easier be taken in the proper context. Sometimes the best loan a small business can receive is the one it does not receive. Sometimes the small business needs help in terms of mentoring, which it can get from our Federal Business Development Bank. It may need assistance in consulting. These businesses do not necessarily need an influx of cash and the added burden of additional debt. I think it is extremely important that we look at the impact of additional debt when we are talking about the success of small business.
Bill C-53 is not designed to increase the burden of debt on small businesses. Instead it is designed to meet three basic objectives: to continue helping small young businesses access financing, to increase program accountability and to move the program toward cost recovery.
I want to take a moment to talk about each of these objectives.
With respect to continuing to help small business access capital, the new rules for leasing recognize that there is a rather non-traditional way of financing the purchase of heavy equipment, perhaps trucks, tractors, trailers or perhaps leasehold improvements in a new operation to take that business into the forefront. Perhaps an entire revamp of the business premises is required.
Banks, without the support of the Small Business Loans Act, without the support of the Government of Canada, would be loath to lend money for things like these because of the quickness of the depreciation once the asset is in place. That is a very difficult problem for small business.
In reality what small businesses have to do in many cases is put up their first born male child or their first born female child as collateral before the banks will entertain the thought of lending them the money. Actually there might be an advantage to that in some instances.