Debates of Feb. 16th, 1998

Small Business Loans Act

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Madam Speaker, I am pleased to participate in the debate on Bill C-21, a debate which with one exception has been measured, careful and non-ideological. That exception was the speech of the hon. member for Saskatoon—Humboldt, another ideological rant against anything governments might do which might be of benefit to anyone.

If we look around the world we will see that there is not one successful economy in which government and business do not work together for the benefit of all. The question that arises of course is whether or not intervention by the government in the marketplace is beneficial in the long term.

We know from all analyses, from all work done on small businesses that they have some initial problems in particular with raising capital. We also know that their ability to create jobs in this economy is unsurpassed by any other sector of the economy. Large business is downsizing. Mega mergers are costing Canada thousands and thousands of jobs. However small businesses are working hard and are generating jobs right across the country, from the east coast to the west coast and all parts in between.

It is the small and medium size business sector which is driving the Canadian economy. It would only be proper for us to look at ways in which we can assist that sector to do the job which it is doing. That job is not only to pursue the interests of the owners of those businesses but it is also to create jobs across the country.

We know that small businesses experience significant difficulties in raising capital from financial institutions. The banks have begun a process of trying to persuade Canadians how oriented they are toward public interest and how they do what they can to assist wherever they can. However the fact of the matter is that banks have not been very helpful to small businesses. Across the country concerns have been raised by small businesses about the treatment they have received from banks and other lending institutions.

In order for the small business sector to thrive, to create economic activity and to create the jobs which are so vital to Canada, we need to ensure that impediments in their way are removed. The small business loans program is a small step but an important step in removing one particular impediment to the establishment and certainly to the growth of small businesses. That impediment is the difficulty experienced in raising capital.

Under this program the federal government will provide loan guarantees to assist in the marketability of small companies as they go to financial institutions seeking financial assistance. I am a member of a party which is committed to assisting small businesses in whatever way is possible. This is a legitimate, sensible, rational, logical program to assist small businesses.

Our economy is becoming increasingly globalized. If we listen to the Minister of Finance, foreign banks will be coming to Canada to generate competition in our banking sector because Canadian banks do not do that very well and in any case are more interested in expanding overseas. Our economy is increasingly affected by competition from overseas.

Indeed it is the small and medium size business sector which has an important part to play in Canada's economy. It is the one part which is and will remain Canadian owned and which is and will remain committed to the community within which it operates. That is critically important as our economy becomes increasingly globalized and as our economy becomes increasingly threatened by outside pressures and by corporations on the inside which are focusing more and more on overseas investment. The small and medium size business community plays a critically important role in ensuring some Canadian ownership of our economy and some commitment to the communities within which they operate.

We know the devastation caused when a company ups and leaves a community because it can no longer make the kinds of profits it wants to make in that community.

Often it is not because it cannot make profits but because those profits are not large enough. Those employees who worked for the corporation, perhaps for years and years and maybe even generations, are thrown away as irrelevant to the corporation's needs. The community in which that business operates is ignored in terms of its interest. The corporation goes off, makes money somewhere else and continues that cycle.

The devastation which takes place in many of our communities is a serious and significant problem for those affected and for the country as a whole. It is vital that we do what we can to ensure that small and medium size businesses thrive and counter to some extent those particular trends.

It is important for it to be noted that New Democrats support Bill C-21 and have done from the beginning. It is important to extend the program for one more year while serious review of the program is taking place. I will come to some of the concerns in a moment. It is important to continue the program while we are assessing its strengths and weaknesses and how to make it a better program.

Were it not as successful as it has been, perhaps it would not be necessary to extend it for just one more year. It has been a successful program. Indeed all studies of the program show it to be one which is particularly well regarded when matched up against those of other OECD countries, for example the United States, the United Kingdom, Germany and Japan.

Our program has been shown to be one of the better programs with administrative and default costs much lower than those in other countries. That is not to say there have not been problems, and I will come to those in a minute. It is a program which has proven to be successful and useful to small business.

The government could prevail upon its friends in the banking industry, many of whom contribute significantly to the Liberal Party's funds and I am sure would be only too open to that kind of ministration by the government. It could work with the banks to ensure that the banks put the public interest in the mix when making the decisions it makes.

The banks can afford to pay their chief executive officers millions of dollars a year but yet cannot afford to commit themselves to helping a small business in any significant way. I think that would be another way in which the government might assist.

We are still wrestling with the GST and so on. Lack of any real commitment to job creation on the part of the federal government and all such things hurt small business as well.

As I said, I am only too pleased to support Bill C-21 which will extend and enhance slightly the Small Business Loans Act. It is worth pointing out that the auditor general has suggested that some loans are made without a proper review by Industry Canada, that the government has paid out default claims to banks for loans not eligible under the program, and that banks are sometimes charging user fees to small businesses in violation of the act.

There is also concern voiced by the auditor general and by others that the jobs claims, the numbers of jobs created as a result of the loan guarantees contained in the small business loans program, have been grossly exaggerated by those who wish to support, sustain and encourage the program to continue.

None of those things are useful as elements of this debate. It is only proper and I am glad to see the government is pursuing a full review of the legislation. I hope at the end of the review we will end up with a better small business loans program to support small businesses which fulfil a critically important role in our economy.

We will be supporting the legislation. We hope the government will treat it as a priority and do more to ensure that the conditions necessary for small business to thrive are in fact implemented in the budget and in economic and industrial policies in years to come.

[Jerry Pickard, Liberal, Parliamentary Secretary to Minister of Public Works and Government Services]

Madam Speaker, I thank the previous speaker for his comments on the SBLA presently before the House.

The member has been here for many years and has probably gone through the process more than many of us as far as reviewing acts is concerned. We extend the act for a year. We review it in the standing committee. We take into account the auditor general's comments and all information from opposition parties and the government to research how we can improve it.

This has been done before and the effectiveness is usually good because it provides the time and ability to do research in more depth. I ask the member for his comments.

[Chris Axworthy, NDP, Saskatoon—Rosetown—Biggar, SK]

Madam Speaker, I thank the hon. parliamentary secretary for his question and for all the work he does on the industry committee to ensure that we all have our say and that our points of view listened to. I appreciate that has not always been the case.

In response to the member's question there can be no doubt that we should not continue present programs or introduce new ones without a thorough review of their effectiveness. In particular when we are dealing with government intervention into the marketplace it is absolutely critical that intervention actually helps matters along rather than make them worse.

We have seen programs galore which actually make matters worse. We have to focus on the role government can play in the context of the economy as a whole to do things that other stakeholders cannot do.

In the context of this piece of legislation it is clear that financial institutions are not fulfilling their responsibility toward small business. It is therefore important for the Government of Canada and society as a whole to push the banks to fulfil that responsibility. After all, they make profits out of us. They should recommit those profits to the communities and to the people from which they make those profits. It is their responsibility to do that. It is their right to make a profit but they have a responsibility to contribute too.

In addition to forcing the issue and using all the good offices of the government to ensure that banks fulfil that responsibility, it is appropriate the government on behalf of all of us provide some small assistance to small businesses because of the critically important role they play in our economy as they struggle to obtain the capital investment they need.

It is critically important that we review all these things and that we do not, as the Reform Party would do, dismiss every government program as irrelevant, as a nuisance or as something that cannot help without actually reviewing it.

The Small Business Loans Act is plainly one of those pieces of legislation that actually helps. Surely we should not let ideology blind us to common sense programs which assist those in need.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Madam Speaker, it is with pleasure that I rise today to debate Bill C-21, an act to amend the Small Business Loans Act.

This bill would extend the Small Business Loans Act for another year, until March 31, 1999. It will also raise the ceiling of the total amount of loans that may be outstanding to $15 billion from $14 billion.

The legislation has always operated with a sunset clause to ensure periodic review for improvement and assessment of whether the bill is meeting the needs of the small business sector and not merely renewal.

However the government has yet to make up its mind on what it wants to do with the act. As a result of its indecision it has requested parliament to renew the act for another year while it continues the program.

We support the legislation only because without it the current lending period as of March 31, 1998 will cease and SMEs will not have access to capital under the Small Business Loans Act.

However the government should not expect the same support from my caucus colleagues or, for that matter, from the small business sector unless it begins to review, improve and update the act to ensure that appropriate access to capital is afforded to the real engines of job growth, the small and medium business sector.

It comes as no surprise the government has not decided what to do. It has done little more than pay lip service to the concerns of small business over the past four years. It has forgotten about the promises it made in the 1993 red book.

The government often claims to be an advocate and supporter of small business. If this were true, why has the government not addressed the deficiencies of the act and not even attempted to act on the series of observations and recommendations in the auditor general's report.

The primary objective of the Small Business Loans Act is to increase the availability of loans for establishing, modernizing and improving small business enterprises by offsetting a portion of the lender's net losses in the event of a default by a loan guarantee program.

I would hate to sound cynical, but I am really worried given the government's reluctance to establish specific debt reduction targets. As well, it is reluctant to reduce taxation for both consumers and small business. The government's plan is to create more small businesses and to continue to tax us to death so that large and medium companies wither into small companies.

The government has missed a real opportunity to show SMEs that it is serious about the concerns SMEs face today. I am not alone in my views. The auditor general pointed out in his recent report on this piece of legislation in section 29.87:

New lending under the program will end 31 March 1998 unless the government decides to renew it. This presents an opportunity to review the program's contribution to filling current financing gaps and stimulating economic growth and creating jobs.

He went on to say:

The review would also enable Industry Canada to assess whether the program meets the needs of small business in a rapidly changing economy.

There are others that believe we should not have wasted this opportunity to improve the act as well. The government was criticized for this broken red book promise by its own rank and file in the preamble to a priority resolution passed at its October 1996 convention as follows:

The banks and other financial institutions have not taken enough concrete steps to alleviate the hardships faced by small and medium size firms in obtaining investment capital.

In the time that I have been allowed I will attempt to address a number of the observations and recommendations within the report of the auditor general. In addition, it would be appropriate for us to remind the government of two other documents that must be considered once it gets around to improving the act. These two documents are committee reports, one from the department of finance entitled “Growing Small Businesses” and the other is an industry committee report entitled “Taking Care of Small Business”. I will refer to these documents often during my remarks.

Before we further discuss the necessary initiatives required to improve the bill, it would be useful for us to remind ourselves, and in particular those on the opposite side of the floor, of the impact of small business on the Canadian economy. More than 98% of businesses in Canada are small businesses with less than 50 employees. Half of Canada's workforce is employed in the small business sector. It is relatively recognized that the small business sector has had the greatest proportion of new job creation in the past four years.

As the auditor general pointed out, small businesses play a very significant role in the economy. They are the heart of economic activity and community development. In addition they sometimes develop into the large firms of the future. Small businesses contribute 43% of Canada's private sector economic output.

The overall theme of the auditor general's report and my principal concern is that Industry Canada does not have the performance indicators and benchmarks to properly assess whether the act is actually accomplishing its objectives. The objective must be to ensure that lenders make capital available to firms that they may not have without the government guarantee.

The program's raison d'etre is to help to fill existing program gaps for small business. Instead it seems the government guarantee is not used to increase availability of credit. Rather it allows lenders to reduce the risk on loans they would have made without the guarantee.

A small business person brought this quote to me the other day concerning the Small Business Loans Act, that there should be a loan guarantee for small business and not a loan guarantee for the banks.

The AG highlights this fact in referencing a 1994 study showing that between 30% and 40% of Small Business Loans Act loans were made to firms that would have received financing from lenders anyway. Without true financial support and adequate financing for growth of our small business sector, growth will be stunted and the future prosperity of Canada threatened. Those are the words of the auditor general, not mine.

The government's 1993 red book promised to exercise leadership and challenged the banks and other financial institutions to develop concrete ways to help small businesses find the capital they need. Given that nearly 40% of the loans that are guaranteed would have been guaranteed anyway, I would say that more work needs to be done before the government can claim any degree of success on this matter.

As I indicated earlier, the principal problem of the act is that it lacks clear objectives, performance indicators and benchmarks to measure the success and effectiveness of the legislation.

The government could benefit from the old adage that what gets measured gets done. The origin of this act dates back to 1961. In 1961, before I was born, the type of business that would likely get started was usually retail based or linked to light manufacturing. Things have changed since the retail shop and the light manufacturing era. The Canadian economy today has greatly evolved since that time. The legislation governing the act has remained essentially unchanged with respect to the types of assets eligible for financing.

The service sector and the knowledge and information sector form a much greater part of the economy today, with the latter sector having a high net employment growth potential. It is imperative that when the act is indeed reviewed the government ensure there are innovative solutions and commitments from lenders to address these needs.

No program can be effective unless there are clearly stated objectives to clarify expectations and to develop performance indicators concerning establishing, expanding, modernizing and improving small business.

To date, for the most part Industry Canada merely tracks the activity of the program, tying it to job creation. However, this approach does not provide us with other critical indicators such as the effect a loan has on the level of sales, profitability, productivity, competitiveness, levels of exports, product development, net employment impact and overall business success. These are critical indicators that most SMEs employ within their own operations.

We suggest the program adopt methods to track these criteria in their own programs and their own departments in order to properly assess the impact of this program.

As the auditor general pointed out, the net job effect, as stated in the 1995-96 annual report, indicated that 37 jobs were created per $1 million worth of loan guarantees. However, the auditor general goes on to point out in a follow-up report that given the recently completed Industry Canada study of economic effects, the program shows that the government's numbers were merely seven jobs created per $1 million guaranteed.

When this bill is reviewed all parties would expect more rigour in evaluating the job creation impact of the program for the purposes of parliamentary and public review and scrutiny.

Perhaps the greatest concern we have today is that the original intent of the program was to provide access to capital to start up ventures or small firms that would not otherwise have been granted a loan from a lender. The relative size of the loans was intended to be small so that the borrowers could have handled a higher rate or fee in exchange for a loan that did not leverage their personal guarantee.

The result today is that given the expansion of the program, the program is now beginning to displace traditional lending rather than enhancing marginal loan volumes and filling gaps where small venture loans are required. Given that 90% of the loan was to be guaranteed, the lending institution would then consider engaging the loan.

I would like to ask the government what is the average size loan it guarantees. The fact that the program has now been expanded to include loan amounts of over a quarter of a million dollars should concern us. I speculate that 30% to 40% of loans guaranteed under the program, which the auditor general pointed out would have been approved anyway, relate to the higher sums and not amounts that reflect the original need for the program.

The SBLA is a good program. In its conception it was supposed to be small and responsive to the needs of small business. It has grown excessively so that today it displaces traditional lending.

The Progressive Conservative Party believes this program needs to be tightened up and the focus must return to smaller lending with less focus on personal guarantees rather than sums of nearing a quarter of a million dollars that would be approved by traditional lending institutions anyway.

A bigger program does not always make for a better program. Bigger programs often make for worse programs. A bigger program would not be as responsive. The fact that the government has allowed the size of the program to mushroom in sectors where it does belong is one of the reasons the government has been unable to monitor and forecast future claims.

The government has a duty to the taxpayer to be able to provide this function. The auditor general correctly pointed out that Industry Canada must carry out regular analysis of its guaranteed portfolio including loans by industry, region, age of business, lender and type of asset. Overall economic trends need to be factored into such analysis.

The government also has a responsibility to taxpayers to ensure the banks and the lenders are fully challenged when participating in the program. The government must be rigorous in assuring the lenders comply with all regulations and exercise due care when making the loans. Industry Canada needs to strengthen its claim audit procedures to obtain assurance of such compliance. The government cannot be a loan guarantee program for bankers who have not made the right choices in the first place. The government must take steps to minimize the interest it is paying on claims submitted by lending institutions due to unnecessary delays in filing their claims.

I will make some more comments relevant to small business given that we are about to enter into the budget debate. The average Canadian consumer and small businesses are overtaxed, in particular with respect to payroll taxes. Canada pension plan premiums have been increased substantially. We know today's discussion is in the context of a perceived fiscal dividend given that the government has stated it will have a surplus. However, given that the EI fund takes in over $6 billion more annually than it actually consumes, that is the reason for the surplus.

We also know that if any type of tax kills jobs it is payroll tax. We advocate categorically that this government must kill job killing payroll taxes by reducing the EI fund. The chief actuary pointed out that the employment insurance program is sustainable at $2 per $100 of insurable earnings instead of the $2.70 per $100 it is currently set at. Given the hike we have had in the CPP premiums we must reduce payroll deductions.

There are other initiatives that must come forth as well. Canadians are poorer than they have been in 15 years. Disposable income has gone down drastically over the past two decades. Canadians need disposable income.

To put more money back in consumers' pockets so they can spend money to help SMEs, we advocate that the government raise the personal income tax exemption from $6,500 to $10,000. That would take two million Canadians off the tax rolls overnight. Those two million Canadians should not have been there in the first place.

Canadians need more disposable income. They need lower payroll taxes. EI, CPP and payroll taxes kill jobs.

Before we even consider spending a fiscal surplus we need to look at something that affects my generation as a younger Canadian, the $600 billion national debt. What this government has to do is provide Canadians with debt reduction targets to ensure that we never get caught in this spiral of deficit upon deficit again.

We do support Bill C-21. We have made some recommendations which we would like the government to carry forth. We challenge the government to actually do what is right and kill job killing payroll taxes, to bring forth to Canadians an agenda for growth that has less debt, less tax and more jobs. If we had that kind of foresight from an economic perspective Canada would be heading in the right direction into the next century.

[Gurmant Grewal, Reform, Surrey Central, BC]

Madam Speaker, I have been listening to the hon. member. I think we all agree that small businesses create jobs in this country. The Reform Party is pro small business. We know that 98% of businesses in the country are small businesses.

I remember a short story. Once I was arguing with one of my friends. He said that small businesses are what create jobs in this country. I asked him how to start a small business when there is a problem because job killing taxes are so high. It is very difficult for small businesses to thrive in this environment. He said it is easy. Start a big business and pay so much tax that you are left with a small business. That is the kind of situation we are facing in this country. Job killing taxes are hard on businesses.

In 1994 the industry committee called for a review to be done of the Small Business Loans Act. That review has not been done up to now. The auditor general also points out that a complete cost benefit analysis has to be done before proceeding further. The auditor general has critically looked at this issue and has recommended that a full review of the act be undertaken before an additional $1 billion is committed to this program.

Since this program is already inefficient and unaccountable, how can the member support this bill until a complete evaluation is done and until this bill is efficient and doing what it is supposed to do? Why would Canadians support this bill?

[John Herron, Progressive Conservative, Fundy Royal, NB]

Madam Speaker, I thank the hon. member for his question. I will give him a short answer then I will give him a long answer.

Small and medium enterprises do need access to capital. The loan guarantee program is actually filling the gaps in marginal loans which are covered under the Small Business Loans Act. Without that program certain firms would not have the access to capital they currently have under this program.

One of the most democratic institutions we have is the Canadian Federation of Independent Businesses with has 88,000 members. It is clearly the position of the Canadian Federation of Independent Businesses that the Small Business Loans Act is a good program. It is something that should be continued. It should not be expanded to the degree we currently have for accessing loans of nearly a quarter of a million dollars. It should be smaller, it should be tightened up, it should be more responsive to actually fill the gaps for loans that banks would not otherwise be granting.

In terms of Reform supporting small businesses, in our platform we advocated reducing the small business tax rate from 12% to 8%. I am sure my colleagues to my right remember that.

The Reform Party advocated a flat tax during the last election campaign. Stephen Harper, who could be the leader in waiting of the Reform Party, said that small business income could be rolled into a flat tax income. That means Reform would tax small business in the neighbourhood of 22%, 23% or 24%. I do not think that is very good for small business.

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

Madam Speaker, I listened with interest to the remarks made by the hon. member for Fundy—Royal, a new member of the House whom I have come to know over the last number of months.

I detected in his speech some changes from the Mulroney years. If my notes are correct in following this issue over the last 20 years, during the previous government's time there was an attitude of increasing the definition of small businesses to include higher revenues and bigger businesses. However I noticed from the hon. member's speech that he wants to centre on smaller businesses under the $250,000 small business target. I am sure that is a change but I would like the hon. member to confirm it.

I am sure the hon. member knows that of all the SBLA loans, 40% go to new businesses and almost 60% are in the small business category which he mentioned.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Madam Speaker, as time has gone by we have seen more competition in the banking industry and more banking institutions coming into Canada. Trust companies have also become involved. The Canadian Bankers Association is trying to take a more aggressive look at the small business sector, giving it more access to capital.

However, the financial institutions are still not filling the void, which was the initial intent of the Small Business Loans Act. The initial intent was to provide loans to small businesses which would otherwise not have access to capital without tying up their personal guarantee.

If it is a shift, it is more of a shift in terms of what is happening with lending institutions than with respect to the initial intent of the SBLA.

[Jim Pankiw, Reform, Saskatoon—Humboldt, SK]

Madam Speaker, I would like to correct the hon. member. When he started his speech he said that he would oppose the bill except for the fact that if he does not support it, the Small Business Loans Act program could not function for another year. In fact the current amount of extended liability is $12.7 billion which leaves $1.3 billion in potential liability for the act to extend.

Furthermore if we look at the auditor general's report and accept the fact that close to half the loans which are administered through the program are given to businesses that would have received financing anyway, if the inefficiencies of the program were addressed, the $1.3 billion liability which remains could be doubled as opposed to extending a further $1 billion as proposed by the Minister of Finance under the current system of inefficiencies which would only in effect extend $.5 billion to businesses which really need it.

Therefore the hon. member is mistaken.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, in quick response to the hon. member with respect to qualifying our support for the bill, we believe that the bill has to be reviewed. Initiatives that were suggested in the auditor general's report should be considered and a new Small Business Loans Act should incorporate some of those initiatives.

We also said that the bill should be tightened up to the original intent of the legislation. That said, with respect to C-21 and the lending period, in order to be able to give out any additional loans, if it were not renewed for another calendar year, the potential is that some small businesses would not have the access to capital that they require.

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

Mr. Speaker, as was noted in the Speech from the Throne that opened this session of Parliament, the stimulation of job creation has, is and will continue to be a major objective of the Government of Canada.

Over the past four years the government has made progress and put in place the foundations for economic strength and increased confidence. The government has regained the ability to address the priorities of Canadians while living within its means. The budget will be balanced no later than, we hope, this fiscal year and the debt to GDP ratio has been put on a permanent downward spiral. Interest rates are affordable and inflation is also at a very low level.

The government intends to continue to pursue its successful course and take further action to encourage new investment to create new jobs and to generate the nation's wealth necessary to assure Canadians of a stable and secure future. This is the context which the government has brought forward Bill C-21, an act to amend the Small Business Loans Act.

Mr. Speaker, I should mention that I will be sharing my time with the member for Mississauga West and it looks like I will be sharing it with question period as well.

We all know the importance of the role that small and medium size enterprises play in the Canadian economy and the degree to which they are responsible for the creation of new jobs. The bill before us is designed to help ensure that the small business sector can continue to be a vital and dynamic part of the Canadian economy.

Bill C-21 will increase the authorized lending ceiling of the small business loans program by $1 billion from $14 billion to $15 billion. It will extend the current lending period to March 31, 1999. There are no additional program changes contained in this bill.

By passing this bill we will also be permitting the review process for the small business loans program to go forward. This is very much in the best interests of Canadians because the SBLA program is an excellent one. It is an issue that fulfils a real need in Canada's business support framework.

As we deliberate on this bill before us, I think it is important to consider the fact that almost every country in the developed world has some form of loan guarantee program for small and medium size businesses. Why? Because these programs are set up primarily for small young firms, companies that by and large have not yet had the time to develop a sufficient capital base and therefore the banks are not generally keen on lending them money. Yet it is these very firms which create so many of Canada's jobs.

The SBLA allows the federal government to stand behind loans made to small and medium size businesses by providing an 85% guarantee against the individual loan losses. It is important to note that the government role in this program is as a backup only.

Private sector lenders are entirely responsible for making loans under the SBLA program and for evaluating the businesses which apply. The decision to offer an SBLA loan to an eligible small business is taken exclusively by the private sector lender. Lenders are expected to follow normal commercial lending practices in authorizing SBLA loans. All loans are registered with the SBLA administration office of Industry Canada.

When a lender submits a claim for loss reimbursement, federal administrators audit the claim to ensure that the lender has complied with all the requirements of the SBLA and SBL regulations.

Let me emphasize that the program is not a subsidization of business. In 1995 Parliament made changes to the act that moved it toward cost recovery. Since these changes increase the price of SBLA loans, it is likely that more of the intended beneficiaries will access it.

Lenders remit a one time 2% registration fee to the government which the lenders may charge back to the borrowers. In addition the lenders pay a 1.25% administration fee on their SBLA portfolio which may be passed on to borrowers through interest rates only.

This fee structure is essentially a user pay system designed to cover any lender's loan losses under the program. Thus the SBLA program has been reformed to end subsidies and become self-sustaining. Critics are dead wrong when they try to characterize it as a handout. The program has been set up to help small firms and entrepreneurs get over some of the most difficult hurdles that confront them particularly in their early years.

The average loan made under the program during fiscal year 1996-97 was for $65,000. Most of the firms have fewer than five employees. The companies that are getting the loans are the ones that are now creating the jobs in Canada's economy. They are the young creative companies, not the established big corporations which have been shedding their employees in the 1990s.

Without this program some of our best and most innovative small companies would be denied financing, not because they are not viable but because they are new and young and are seen as presenting a high risk. In other words they represent precisely the sort of people and firms that we should be encouraging in order to provide the jobs needed by Canadians and particularly Canadian youth. This is especially true in light of the latest employment statistics which indicate that the SME sector created 81% of Canada's job growth in 1996-97.

I mentioned that Bill C-21 will keep the SBLA program going until March 31, 1999. The government is continuing to update and improve the program by carrying out a comprehensive stakeholder review. The extension under consideration will give us time to complete this review and further improve the Small Business Loans Act as we have improved it in the past.

The goal is to make changes to the SBLA to ensure that the government can continue to address marketplace gaps on a fiscally sustainable basis while minimizing overlap and duplication with private sector financial institutions.

In carrying out its comprehensive review, the government will certainly give full and complete consideration to the recommendations and suggestions the auditor general has made in his review of the SBLA, particularly with regard to a more detailed and updated evaluation framework and the need to eliminate any loopholes that may permit project splitting. The auditor general's report pinpointed some program weaknesses and suggested a number of remedies. Industry Canada has already implemented many of his suggestions and is in the process of implementing more.

The government is determined to create a climate in which Canadian small businesses can thrive. One of our key challenges in this regard is to ensure that the banks and the financial institutions become more flexible and open with regard to the needs and opportunities of small businesses, particularly with regard to lending practices. By passing this bill the House will be helping to do just that. During fiscal year 1996-97 more than 30,000 firms benefited from the SBLA program.

[The Speaker]

My colleague, you still have two minutes left in your speaking time. If you like, we will cut here because it is almost two o'clock. You will have the floor when we come back to finish your speech and take questions or comments.

Elvis Stojko

[Bryon Wilfert, Liberal, Oak Ridges, ON]

Mr. Speaker, today I ask you and my colleagues in the House to join me in sending congratulations and best wishes for a full recovery to Elvis Stojko, Olympic silver medalist.

As he said in an interview yesterday “Focus on what you believe in and remember what the important things in life are”. It is a simple message and one that we should live by and remember. By his grit and determination and by giving no excuses, he has led by his very example and is a role model for all Canadians. Richmond Hill's own Elvis has demonstrated that commitment to ideals and goals is something that all Canadians can relate to.

We thank Elvis for persevering and personifying the true Olympic spirit. Congratulations to Elvis.

Trans-Canada Highway

[Lee Morrison, Reform, Cypress Hills—Grasslands, SK]

Mr. Speaker, during the Christmas holiday three more people died on the notorious Trans-Canada death strip in southwestern Saskatchewan. That brings the death toll to 39 since 1978.

Since this government has expressed no interest in meeting its obligations with respect to what is laughingly called our national highway system, I have some modest proposals. First, we could give the Trans-Canada highway to Bombardier. Then there would be no limit to the availability of federal funding. Or we could turn it over to Doug Young and his associates as a toll road and they could be guaranteed with federal money a reasonable rate of return on their investment.

Finally, and this is the least likely, we could try to convince this government that an adequate Trans-Canada highway would be beneficial to national unity.

Quebec Premier

[Guy St-Julien, Liberal, Abitibi, QC]

Mr. Speaker, when was Premier Bouchard's last speech on the importance of education for Quebec?

When was Premier Bouchard's last speech on paying the men and women who stay at home?

When was Premier Bouchard's last speech on the Quebec mining fund promised by the Parti Quebecois?

If you cannot remember, do not blame a failing memory; it did not fail you, as Lise Bissonnette wrote last week in Le Devoir .

Anniversary Of Chevalier De Lorimier's Death

[Stéphane Bergeron, Bloc, Verchères, QC]

Mr. Speaker, yesterday was the 159th anniversary of the hanging of five valorous Patriots, including Chevalier de Lorimier.

On this sad day when the federal government is trying to manipulate the Supreme Court in order to deny the Quebec people the right to decide their own future, let us remember that the Patriots fought for freedom and democracy.

The night before he was hanged, de Lorimier wrote:

I die remorseless. I was only seeking what was best for my country—Despite my misfortune, my heart still has hopes for the future. My friends and my children will see better days; they will know freedom. There is no doubt about it, my clear conscience tells me so—I have only a few hours to live and I wanted to divide this precious time between my devotions and my duties to my fellow countrymen. For them, I am condemned to the gallows to die the infamous death of a murderer; for them, I leave my young children and my wife behind—and for them, I die shouting “Long live freedom, long live independence”.

Lithuania

[Sarmite Bulte, Liberal, Parkdale—High Park, ON]

Mr. Speaker, I rise to pay tribute to the people of Lithuania who today celebrate the 80th anniversary of their country's independence.

Since the founding of the first Lithuanian state in 1236 Lithuania has been occupied by the former Soviet Union for a majority of its history. But with the collapse of czarist Russia at the end of World War I, Lithuanians took advantage of the opportunity to regain their independence and on February 16, 1918 Lithuania's independence was restored.

However, with the outbreak of World War II this freedom was short lived. Lithuania was again occupied for some 50 years beginning in 1939. However, in the late 1980s, as changes were taking place throughout the Soviet Union, Lithuanians organized a powerful independence movement whose protests culminated with the re-establishment of the independent Lithuanian state on March 11, 1990.

Canada's steadfast refusal to recognize the occupation of the Baltic states during the Soviet era is greatly appreciated by people of Baltic origin and among the tens of thousands of Canadians of Lithuanian heritage.

Radio-Canada

[Mauril Bélanger, Liberal, Ottawa—Vanier, ON]

Mr. Speaker, since last night, French-speaking listeners in Newfoundland have been able to tune in to Ce Soir Atlantique , which replaced the Montreal edition of the daily newscast.

I applaud Radio-Canada's decision to give all maritime provinces access to newscasts depicting the social, economic, political and cultural realities of their region.

This good news will no doubt increase the supper time ratings of the French network and supports the efforts made by our government to promote the development of the French language in Canada by providing key tools to French-speaking communities.

In closing, I hope that our colleagues from the Bloc Quebecois will be inspired by this decision and, from now on, make an effort to support the broadcasting of TFO programming to Quebec households.

The Budget

[Diane Ablonczy, Reform, Calgary Nose Hill, AB]

Mr. Speaker, budget day is coming and the Liberals are already announcing how generous they intend to be with the money they have taken from hardworking Canadians.

Now Liberal generosity with our money is taking on an even more alarming twist, giving personal credit to the Prime Minister for the newly minted millennium scholarships. This is supposed to make us forget that the Liberals slashed money for education and health care by billions upon billions of dollars.

What else might be unveiled on February 24 besides the Prime Minister's memorial fund, bargain basement helicopters named after the defence minister, a new courier company with the name of the Indian affairs minister, the son of TAGS as a tribute to the fisheries minister?

Canadians can no longer afford to fund monuments to monumental Liberal egos. Instead, they demand real tax relief on February 24.

Heritage Day

[Sue Barnes, Liberal, London West, ON]

Mr. Speaker, today is Heritage Day.

Canadians know that our nation's diversity is our nation's strength. Just the very word heritage must in this diverse Chamber instantly evoke different personal thoughts and memories.

As individual Canadians, the details of our lives, our families and our communities, our backgrounds are different. But for all Canadians, our tremendous and unwaivering pride in Canada is the same.

These are the feelings that every Canadian shares when we think about our wider heritage which inspires us as individuals, enriches us as a society and defines us as a nation.

If we were born here, we inherited it. If we chose to come here, we sought it out. It is ours to remember, to treasure, to learn from, to draw strength from and to be proud of.

Our Canadian heritage is a binding force which transcends geographical distances and unites all Canadians.

Reference To Supreme Court

[Paul Mercier, Bloc, Terrebonne—Blainville, QC]

Mr. Speaker, here is a poem on the reference to the Supreme Court:

Nine justices speaking as oracles all, In answering as one to Jean Chrét-i-en's call, Will decide if the Constitution doth give Us the right to depart this old country, to leave.

No doubt, they will tell us with faces not bright, That to break with the past, we have no such a right, That while freedom at last is the call we might sound, Such action cannot in their papers be found.

And so as will tell us these justices all, While most of us wish to give heed to the call To freedom for all in this country so right, We must hasten away and go off fly a kite.

Dear Justices there is no need for such fuss. Quebec's future rests really and truly with us. Though high you may be in your privileged pew, Remember the people are higher than you.

We honour your wisdom given freely and well, But respect does not yet put us under your spell. No never before a nine-member wigged band Shall kowtow all the seven million tuques in the land.

Olympic Games

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, over the weekend Canada's athletes made Olympic history.

Our women's curling rink, skipped by Sandra Schmirler, made history by winning the sport's first ever Olympic gold medal. The men's team, skipped by Mike Harris, won a silver medal.

For the first time ever, Pierre Lueders and Dave MacEachern won Olympic gold for Canada in two man bobsledding. In another first, this Canadian team shared the gold with a team from Italy.

Catriona Le May Doan and Susan Auch won gold and silver, respectively, after setting an Olympic record in the women's 500 meter speed skating event.

Canada's Elvis Stojko, who finished with a silver medal in men's figure skating, walked away with a world class medal for the courage he displayed.

The important thing is not that Canada win more medals than in the last Olympics. What is important is our pride in our athletes, because they represent the best of what we are and because they have the courage to give their all in the pursuit of excellence.

The Senate

[Randy White, Reform, Langley—Abbotsford, BC]

Mr. Speaker,

I met a man one sunny day An executive, I'm sad to say Who lost his job—a downsizing trend He was devastated—was this the end?

It's too bad I said to his face Because he was capable to manage any place What a great job he could really do In Canada's Senate for me and you.

But he wasn't qualified—I'm sad to say He wasn't a Liberal in any way. In fact, he had no affiliation Just an outstanding Executive his only station.

Why is it Liberals will throw him to the dogs Yet turn all their buddies into political hogs? Is paying off favours and providing the carrot Better than experience, skills, qualifications or merit?

Some day a new Senate will be the big story It won't include some Liberal or Tory It will include people like the man I met And they will be competent and objective I bet.

Winnerpeg, Manitoba

[Reg Alcock, Liberal, Winnipeg South, MB]

Mr. Speaker, every weekend is a good one for Manitoba and this one is no exception. Two Manitoban Michalangelos, Miguel Joyal and his teammate Denis Savoie, carved the likeness of Louis Riel, the father of Manitoba, out of snow. Their work, entitled “The Great Manitou”, was judged to be the best sculpture in the first annual winterlude snow carving contest. Not only did “The Great Manitou” beat out entries from 11 other provinces and territories, it was also the people's choice, the favourite of visitors to the Hill who also cast ballots in the contest.

On Saturday another Manitoban, Susan Auch, distinguished herself at the Nagano Olympics by winning the silver medal in the 500 metre speed skating event. Her superlative performance marks the second time she has won a medal in that event and caps off a long and illustrious career as a world class speed skater.

I would like to congratulate Susan, Miguel and Denis. This weekend they proved that my city truly merits the name Winnerpeg.

Winter Olympics

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, with yesterday's haul, the greatest day in Canada's Olympic history, Canadian athletes now have nine medals in Nagano. While I rise to salute all our Olympic athletes, I cannot help but notice that even though the prairie provinces make up only 10% of the population, our prairie athletes have brought home nearly 50% of all the medals. As of yesterday the province of Saskatchewan has as many medals as the United States of America.

Prairie people are no strangers to winter weather. We have always said that it builds character. Apparently it has also built an incredible generation of Olympic champions: Catriona Le May Doan from Saskatoon, Susan Auch from Winnipeg, Sandra Schmirler from Regina and Pierre Leuders from Edmonton. Nine medals and we still have one week to go.