Debates of March 13th, 1998

The House proceeded to the consideration of Bill C-21, an act to amend the Small Business Loans Act, as reported (without amendment) from the committee.

Small Business Loans Act

[The Speaker]

My colleagues, there is one motion in amendment standing on the Notice Paper for the report stage of Bill C-21, an act to amend the Small Business Loans Act. Motion No. 1 will be debated and voted on.

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

moved:

Motion No. 1

That Bill C-21, in Clause 1, be amended by replacing line 13 on page 1 with the following: “period exceeds fourteen billion dollars or”.

Mr. Speaker, I am pleased to rise in the House today to participate in the report stage debate on Bill C-21, an act to amend the Small Business Loans Act.

The purpose of this bill is to extend the SBLA for another year until March 1999 and raise the government's total liability to $15 billion which is a $1 billion increase. The purpose of my amendment is to ensure that while the SBLA can operate until 1999 it will not receive an additional $1 billion.

The SBLA in its present form will expire on March 31, 1998. However the government is undertaking a review of the program. Given the serious findings of the auditor general, the Liberal government says it needs more time to study this. I agree that it is reasonable to provide that time but the government should not be asking for more money. As mentioned, my amendment would deny the extra $1 billion the government is requesting, and with good reason.

When the industry minister appeared before the committee last month, he stated that the current liability under the SBLA program had only reached $12.7 billion. At present the SBLA liability ceiling is at $14 billion. Therefore the SBLA already has $1.3 billion to work with over the next year before it reaches its liability ceiling. Why then is the minister asking for an additional $1 billion? Surely the remaining $1.3 billion and increasing efficiencies within the program as recommended by the auditor general will allow the SBLA to operate until March 1999.

I remind the House that the auditor general found serious problems with this program in his December 1997 report. Therefore we should not take this $1 billion extension of liability lightly. He found that taxpayers will be on the hook for $210 million in defaulted loans for the period from 1993 to 1995.

Studies done by Industry Canada show that 40% of the loans did not need SBLA guarantees. The auditor general also pointed out that job creation figures under the SBLA were inflated by as much as five times. He also said the program was abused by lenders and borrowers and that there is little accountability to Parliament.

Given this damning report, the government comes before the House asking for another $1 billion and promises to do a complete review. That is unacceptable. Why was the review not done earlier? Did the industry minister not have any idea of how poorly this program was being run? Does it take the auditor general to move this government to make programs more efficient and accountable?

Clearly Industry Canada has been asleep at the switch. In the interests of hardworking Canadian taxpayers the official opposition cannot turn a blind eye to this blatant mismanagement and simply rubber stamp another $1 billion payout.

We hear a great deal from the government side about how the SBLA is self-financing and costs to the taxpayer are negligible. That is untrue. Anyone who doubts me need only look at the main estimates.

According to the supplementary estimates (B), 1997-98, the government needs another $90 million to cover bad SBLA loans. In the main estimates for 1998-99 the SBLA program is budgeted for huge increases to cover bad loans.

The industry department itself needs $65 million or 35% more than the year previous. ACOA wants an 87% increase, $8.4 million total. FORD-Q wants 11% more, $92.6 million total. Western Economic Diversification requests a 164% increase over last year to bring it to $44.2 million.

More and more taxpayer dollars are going out to cover bad loans made by a poorly managed program. Does the government think the official opposition can support Bill C-21 in its current form? Of course we cannot. We cannot sign off on another $1 billion for this program.

If the Liberals had any real concern for small business financing and growth and creating jobs in this country, they would not be asking for an additional $1 billion in public guarantees. They would be asking the finance minister for $1 billion in tax relief.

Survey after survey shows that Liberal taxes are draining the lifeblood out of the economy and it is small businesses that suffer.

The Canadian Federation of Independent Business found in its October 1997 survey that 80% of small business cited the total tax burden as too high. In its prebudget submission, the CFIB stated that tax levels continued to be the number one concern of small business.

The Liberals have hammered small business once again with a further increase in CPP premiums, a move that everyone knows will kill jobs in our country and force many small businesses into bankruptcy.

Steadily increasing taxes are leaving small businesses with no retained earnings. All of their funds are going to Ottawa. Retained earnings are essential for small businesses to grow. Rather than demand another $1 billion from taxpayers under Bill C-21, why not leave the $1 billion in the pockets of small business owners? Real tax relief measures fall on deaf ears with this government, as witnessed by the recent budget.

The amendment before this House is not unreasonable. It allows the SBLA to operate for another year so that Industry Canada can complete its review of the program. The amendment denies the program an additional $1 billion in liability, but as the industry minister said himself, there is $1.3 billion remaining in the program.

Given the auditor general's findings, we cannot extend another $1 billion to this seriously flawed program. I therefore encourage all members of the House who are concerned with the efficient expenditure and management of taxpayers' dollars to support Motion No. 1.

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

Mr. Speaker, I appreciate the opportunity to speak to the House of Commons on Bill C-21, an act to amend the Small Business Loans Act.

There was a great deal of debate over this legislation during the second reading stage. There was more debate than we might otherwise have thought for a bill whose purpose is simply to give time for a comprehensive review of the Small Business Loans Act. The intensity of the debate demonstrates that all parties have strong beliefs about the best way to encourage small business financing in Canada. I hope that all those interested will take the opportunity to contribute to the comprehensive review.

I trust today I can set the record straight and clear up some of the questions hon. members might have on the timing of the comprehensive review.

I begin by saying a few words about chapter 29 of the auditor general's report. During the debate at second reading we heard a great deal of information that was not correct. Some members for example alleged that it was only because of the auditor general's report that Industry Canada is conducting a comprehensive review. This is not the case.

Under the Small Business Loans Act, the lending authority expires after a set time period. This feature of the act provides Parliament with regular opportunities to review the program. The last comprehensive review was conducted before the act was amended in 1993. The government had committed to another comprehensive review before the expiration of the current lending period on March 31, 1998.

Why will this review not be completed before the end of the lending period? This is where the auditor general's report comes in. And perhaps this is where some hon. members became a bit confused during second reading.

When the auditor general announced that he would look at the SBLA program, the government decided it would wait until receiving his recommendations before commencing the comprehensive review. This was a prudent decision. It avoided the duplication of effort of having two reviews of the act taking place at the same time. It allowed the comprehensive review to take advantage of the recommendations made in chapter 29 of the auditor general's report. I do not think that anybody in this House would want to have it any other way.

As a result of waiting for the auditor general's report, the comprehensive review will not be completed by the time the current lending period expires. Chapter 29 was only tabled last December. That left the government with very few options.

One would be to rush the comprehensive review in light of the concerns raised in the debate, the recommendations made by the auditor general and the issues raised by the stakeholders. I do not believe that anyone would want this review to be rushed. There are many complex and far reaching issues that must be addressed.

Another option would be to let lending expire on March 31 as scheduled and let the comprehensive review proceed. Again, I do not believe anyone who has looked at the importance of this program to small businesses across this country would want to follow this course.

The third option is the one that the government has taken in introducing legislation to extend the current lending period. In that way the comprehensive review will take place without disrupting the program. There will be no inconvenience to the many small and medium size businesses that will be looking at the program for help in securing finances in 1998.

When it was tabled last December, the auditor general's report was welcomed by the government. Some of the recommendations the report made had already been acted on by this government. Others will help form the discussion in the comprehensive review.

In replying to the issues raised in chapter 29, Industry Canada prepared a tabling document for the House of Commons Standing Committee on Public Accounts. The auditor general appeared before the public accounts committee in February 1998. He was questioned very closely on the conclusions and recommendations made in his report.

I think it is very useful for hon. members to recall three points he made in the course of his presentation. First, he said that the SBL program is a generally well run program. He maintained that it would benefit from more precision in its objectives.

Second, he said that he would not require another audit in the customary two year period following the tabling of the report. He will consider giving the department more time to respond to issues raised in the comprehensive review.

Third, he acknowledged that the question of how many jobs are created as a result of the program is very difficult to quantify and there is a large range of estimates.

I would like to briefly respond to some further issues raised during the second reading. There seems to be a great deal of confusion about the proposal to raise the lending ceiling by $1 billion. Some suggested this was an expenditure item needed to cover the potential liability of loans that are made during this extended period.

I would emphasize that Bill C-21 does not make further spending requests. The amended lending ceiling is necessary simply to permit the lending period to continue while the comprehensive review takes place. The total loans made for the period ending March 31 are expected to reach $13 billion. Current lending on registered loans is capped at $14 billion. On the basis of the 1997 spending levels, Industry Canada expects financial institutions to make a further $1.7 billion in loans by March 31, 1999. That number exceeds the $14 billion authority by some $700 million. Bill C-21 includes a modest cushion of $300 million to take into account possible fluctuations in the economy.

Given that loans are registered on average three months after being made at the time the $14 billion ceiling is reached, several hundred loans may have been made to small businesses under the SBLA that will not be registered and therefore will not be honoured by lenders. This may cause lenders to call these loans, causing major disruption to entrepreneurs and businesses. This is exactly what Bill C-21 is trying to avoid. This is why we need to support the $1 billion increase in the SBL program.

Let me also mention another key issue that has been debated at length during second reading. It is the incrementality of SBLA loans. These loans are being guaranteed that the financial institutions would have made in any event.

There is no doubt that there are loans that have been guaranteed that do not fall within the intent of the act. Like insurance of any kind, there will always be some individual loans which do not actually need insurance. For the most part, these loans are less likely to also default and therefore are of no cost to the taxpayer.

In conclusion, I want to emphasize that the SBLA is a good program. It has broad support among the business communities. I think we owe it to the small business community across this country to continue it for one year while we conduct a comprehensive review by all parties and all members of this House. That is why it is important for Parliament to pass Bill C-21.

[Francine Lalonde, Bloc, Mercier, QC]

Mr. Speaker, we strongly oppose the Reform amendment, simply because extending the application of the act for one year without raising the ceiling by $1 billion really makes the coming lending year impracticable. That is what it means.

They might as well take a stand against extending the program altogether, which would mean serious hardship for many businesses. The government would then have to rush through a complete overhaul of the Small Business Loans Act, something neither the Reform Party nor the Bloc Quebecois wants.

By trying to get the point across to the government that it was not diligent enough in performing a complete overhaul, the Reform Party is not penalizing the government, but small and medium size business. This makes no sense.

Does the official opposition have to disregard small and medium size businesses, which most need access to credit to be facilitated by government legislation because they lack easy access to it? They do not have access to the stock exchange and absolutely need assistance.

In fact, the concerns of the auditor general are widely shared. We share them. But he has many concerns: not only repayment but also the efficiency of the program. In light of the objectives of the program or the legislation, it is clear that credit is intended to foster the creation and development of businesses.

But to foster the creation and development of businesses to promote job creation will indeed require serous consideration, as this means making every effort to ensure that the businesses that benefit are not the ones that do not need guarantees but those that need loans the most to develop, create jobs and help generate wealth. We all know it is impossible to develop without reasonable access to funding.

I remind the House that the Canadian Federation of Independent Business admittedly has a problem with payroll taxes and that it wants, as we do and as we were the first to say so in this House, employment insurance premiums to be reduced.

I would mention in passing that, while the fund currently has a surplus of $15 billion, the Minister of Finance has another surplus of $6.7 billion planned, with business' share representing some $3.9 billion. So it will be important to continue, but that is no reason, since SMBs have problems with employment insurance premiums, to deny them credit.

What does the Canadian Federation of Independent Business have to say? According to it, some 30% of businesses do not have enough credit available and therefore their development is limited. Everyone knows that, proportionally, PMBs create the most jobs.

I do not think anyone here can be satisfied with the current job situation. No one can say “We will not help for a year and we will give no more credit to small and medium size businesses”. Especially because the businesses suffering most at the moment—and this will require the attention of all the opposition parties and of our colleagues in the government—the SMBs that have the hardest time getting credit, are the smallest businesses, those with 20 or fewer employees.

Oddly enough, while these businesses have the hardest time obtaining credit, they pay the highest for it and are obliged to provide the most guarantees.

These new businesses, in regions which are facing serious problems—and there are a vast number of them in Quebec and in Canada—may be the source of new impetus, which we must support.

It is a fact that, if these small businesses fail to grow, they often stagnate or die, hence the need for them, and even for growing businesses, to have sufficient credit available.

To my mind, the Reform Party's amendment is totally uncomprehensible. If one says there is still $1 billion and some change left, based on the latest available figures, to reach the $14 billion ceiling under the current legislation, then one did not do one's homework. After reading, hearing and understanding what the auditor general had to say, we know that the actual figure is at least $2 billion annually.

So, if the government does not want to find itself unable to guarantee the loans, it would have to end the program right now. In fact, the program was due to end in March. So, the government would have to end it immediately. However, this would mean that several businesses would find themselves in a difficult situation. Some loans would be recalled, while others would not be granted.

The objective of a reform should be to improve the legislation, not create a situation whereby there would be no loan guarantees for a period of time.

Also, it is somewhat misleading to say that the idea is to avoid putting $1 billion in taxpayers' money in jeopardy. This statement does not reflect the truth. There are loan guarantees, but the conditions are such that it is impossible that this $1 billion not be paid back.

In fact, a very large portion of the money already loaned has been paid back. Even if we take into account all the loans approved over a 10 year period, there are still $6 billion left out of the $14 billion. Out of these $6 billion, $1.4 billion would be at risk if absolutely no one paid back his loan, and if the total guarantees came into play, something which has never happened. So, we are far from having $1 billion in taxpayers' money that could be wasted.

Small and medium size businesses are the ones that really need somewhat easier access, because it will never be easy for them. They are the ones that innovate and create jobs. For them, the going is rough; for every 10 companies that are created, only two or three, depending on the studies and the periods covered, are still in operation 10 years later. But small and medium size businesses are indispensable to help economic renewal, to allow workers to gain experience, and to spur economic life. As far as I am concerned, it would be irresponsible to say “the Small business Loans Act will no longer be in effect as of March”. Indeed, the amendment proposed by the Reform Party really means “we are ending the program now”.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Speaker, I am very pleased today to take part in the debate of Bill C-21 on behalf of our critic for the area, the member for Regina—Lumsden—Lake Centre, who unfortunately cannot be with us today.

Our party intends to support Bill C-21 and co-operate in its speedy passage through the House in order to allow the continuation of the small business loan program which is currently set to expire on March 31, 1998.

The purpose of the program is to increase the availability of loans for establishing new spending, modernizing and improving small business enterprises. This is an objective that we share in the New Democratic Party. Small businesses are a growing and vital part of our Canadian owned economy, creating the lion's share of new jobs in the new economy. This comes right from the auditor general.

I want to mention a few things regarding the amendment put forth by the member for Saskatoon—Humboldt. If the SBLA does not continue past March 31, there is a possibility that 1,200 Saskatchewan small businesses receiving a small business loan will be left without SBLA financing after April 1.

I am wondering if the hon. gentleman would like to tell the small businesses in his riding, many of which probably fall under this category, what he plans to do for them after April 1.

I would also like to relate a little to my own province of Nova Scotia where a growing sector there is small business. Unfortunately small businesses cannot go to the banks because the banks are very tight fisted with the money when it comes to small business loans.

That is most unfortunate because these people are encouraged. They are told to upgrade their training, do this and do that, then they can run their own business and become profitable. They find it very difficult to get access to finances to create their businesses.

The Reform Party is finally showing its true colours as the mouth piece for big business. It supports the monster merger of the Royal Bank and the Bank of Montreal and they want to hand over our financial sector to foreign banks.

I cannot see where that is going to help any small businesses in this country in the long run. A business cannot be started with this ideology. Anyone can put food on the table, but it cannot be done with just good will. We need small businesses and they need access to financing. I find it unacceptable that the Reform Party would try to delay, in any way, this very important bill.

On behalf of all small businesses in this country, especially those in Atlantic Canada, we encourage all parties of the House to support the bill and its speedy passage.

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

Mr. Speaker, I take this opportunity today to speak to the report stage of Bill C-21 with respect to the continuation of the Small Business Loans Act.

The Small Business Loans Act was established in 1961. The initial premise was to ensure that small and medium enterprises would have access to capital for further development.

By that, the intent of the act was to provide incremental financing in situations where traditional financing would no longer be available.

It has been pointed out by the auditor general that 30% to 40% of the loans approved under the Small Business Loans Act would actually be approved anyway so that at the end of the day, on reviewing this act, we would have a loan guarantee program for banks as opposed to a loan guarantee for small business.

Our party will be supporting Bill C-21, only because without it the Small Business Loans Act will not continue and a very valuable piece of legislation would not be there for the small business sector.

That said, we have some concerns with respect to the act. Over the years the ceiling of the act has gone from only a few billion dollars to $15 billion worth of loans guaranteed.

The reason for that is that the original intent of the legislation, incremental financing, has now gone to a situation where we are guaranteeing loans on a continuous basis of nearly a quarter of a million dollars. That is not the access to capital these individuals want.

The initial intent of the Small Business Loans Act was to ensure that there would be financing for slightly riskier loans where the small business sector would be willing to actually pay a higher rate of interest and be willing to pay a fee to have this access to capital. The intent of the legislation has gone to the wayside.

My colleague from the New Democratic Party pointed out that this is a piece of legislation that is highly regarded by small business. All areas of this country, whether Nova Scotia, my home province of New Brunswick or British Columbia, rely on the Small Business Loans Act.

We support both these amendments. The legislation has to continue.

I know my colleagues with the Reform Party have a lot of small business ventures in their areas as well. Those individuals who do have a lot of small and medium enterprises in their neck of the woods rely on this piece of legislation. It would not be a very prudent step for them to recommend that we do not have this loan guarantee program for small business, given the fact that their small business sector relies on this piece of legislation.

I would recommend them to reconsider their current position and actually support this legislation when it comes time to be improved later on. The small business sector needs a small business loans act. It needs a loan guarantee program for incremental loans. It does not need a loan guarantee program for large scale loans.

This is not just me saying this. The Canadian Federation of Independent Business has 88,000 members. Its members categorically point out that one-third of their membership actually believes that the number one issue affecting small business is still access to capital. Look at it from the point that we have a loan program that was only a few billion dollars only a few years ago. It is now a huge amount of money. We are heading toward $15 billion in loan guarantees. One would almost think that with that increase small business financing would be that much more accessible.

In 1997 the acceptance rate for loans has actually gone down 2% from 1987. The reason for that is the type of loans that are now being guaranteed under this program are not in its original intent.

We will be supporting the amendments to this legislation. We will be supporting Bill C-21 this time only, but we do recommend that the government take very seriously the recommendations of the auditor general. The minister pointed out that during his presentation earlier it would be a valuable tool on review of this bill. We recommend that the government act on the recommendations and the observations by the auditor general. Above all is that we move toward the original intent of the Small Business Loans Act, incremental financing.

[Deepak Obhrai, Reform, Calgary East, AB]

Mr. Speaker, I would like my colleague from the Progressive Conservative Party to listen to what I have to say, as well the member from the NDP who never seems to have any solutions except criticizing.

Today I rise to voice my opposition to Bill C-21, an act to amend the Small Business Loans Act.

The purpose of this act is to extend the small business loans program to March 31, 1999 and to raise the government's liability under this program to $15 billion, a $1 billion increase. Few will deny the importance of small businesses. They symbolize the entrepreneurial spirit and the work ethic that have made this country what it is today. They are the engines of the growth of the Canadian economy.

In 1994 more than 98% of all businesses in Canada were small businesses with fewer than 50 employees. In 1995 the numbers indicate that small business accounted for over 40% of Canada's private sector economic output.

My wife owns a dry-cleaning store in Calgary. I am a junior partner. She has been operating this business for the last 15 years. I am an owner of a small international consulting firm. I was a business delegate with Team Canada to Asia. Therefore I know the struggle that small business owners go through just to make ends meet.

I also have firsthand experience in dealing with well intentioned but misguided government policies such as the small business loans program. This program does not successfully aid small business owners who truly need assistance.

The small business loans program has incurred a net loss estimated at $210 billion for loans issued between 1993 and 1995. Why? This program lacks accountability and clear objectives.

The banks are guaranteed the money at no risk to them if there is a default. Businesses will access more money than they can handle, thereby raising their debtloads. The government will try to look like a friend of small business by implementing this program. Lastly, enforcement is poor.

The auditor general, a non-partisan evaluator of government spending, has recommended that this government make a comprehensive evaluation of this program before it is extended. I agree with the auditor general because of the following reasons.

The Canadian economy is in a state of transition. No one would have expected in 1961 when the program was created the extent of change that would occur during the following 35 years. The Canadian economy has gone from being primarily based on the manufacturing sector to now being dominated by the service sector.

Who would have envisaged the growth of the high tech sector and the effects of the Internet in 1961? The Canadian economy and the business environment has changed and therefore the needs of small businesses have changed.

The current small business loans program does not take this into account. As well, the auditor general remains doubtful that the program's move toward full cost recovery will succeed. He suggests that careful monitoring and better systems to forecast the future performance of this program are needed. He also calls on this government to strengthen the program's auditing of potential borrowers.

The auditor general recommends that the department provide Parliament with information in order to allow us to assess whether this program is effective.

I have just listed several programs that both the auditor general and my Reform caucus colleagues share about the small business loans program.

We agree with the government on one thing, that we must encourage the growth of small business. This entails giving entrepreneurs access to capital.

While the Liberals feel that the inefficient and wasteful government programs will achieve this, the official opposition believes businesses will thrive if taxes are cut and bureaucratic red tape is reduced.

As one of those with experience in small businesses, I can attest to the havoc this government's excessive taxes and unnecessary bureaucratic paper work have on the small business community.

Business owners need the government off their backs. They need an economic environment which allows entrepreneurial spirit to excel. Let us start by reducing the tax burden that, simply put, kills jobs and profit.

Let us for the moment reflect on the tax burden for an average small business, the payroll taxes, CPP, UIC and WCB. While the objectives of this program are noble, government mismanagement has raised these premiums to very unacceptable high levels.

Then there is the business tax, a tax that is not tied to performance but to space occupation. Witness what happened in Toronto yesterday when small business owners were hit with huge tax increases.

Then we have the property taxes charged by the landlord through the operating tax, and finally the GST, a supposedly revenue neutral tax. Ask any small owner about GST. The GST came from their profits as competition and consumer resistance forced businesses to absorb this tax.

Therefore it is no coincidence that the provinces with the lowest provincial tax rates, Alberta and Ontario, are leading the country in job creation.

It is also no coincidence that the United States, whose taxes are considerably lower than ours, has an unemployment rate of under 7% and dropping while ours remains stuck at more than 9%.

The government had an ideal opportunity to show its commitment to the hundreds of thousands of small business owners of Canada by reducing the tax burden in the last budget.

Did the government do that? No. In fact it went the other way and compounded the problem by throwing more money at what can best be described as a band-aid solution.

Rather than setting up more rules government should be allowing entrepreneurs to keep more dollars in their pockets, which will allow them to hire the extra person they need.

Government interference in the marketplace discourages the development of alternative and innovative financing solutions for small business. At the same time there must be a re-evaluation of the way in which financial institutions lend money to small business.

The banks must show a human face to the thousands of struggling individuals who need that extra infusion of capital to kickstart their businesses. The major banks must realize that their monopoly carries with it certain social responsibilities and obligations. They must also take certain risks. Right now the risk is zero or, at the very least, ridiculously low. They are thriving in this economy. Profits are at record levels. They should be partners in our society and at least assume some burden.

Today with their record profits banks can afford to be partners. They should be joining those pulling the wagon of prosperity instead of merely riding on it. They must do this or risk losing their monopoly.

The dual process of reducing taxes and having banks deal more compassionately with small business owners will be mutually beneficial. Less taxes mean more profit. More profit means better loan risks. Better loan risks translate into easier financing. Easier financing brings about expansion and thus more employment. This is the route we should be following.

We have before us a government that now seeks to extend the small business loans program by one year. I could possibly commit to supporting this if the government initiated a thorough review of the program, just as the auditor general recommended.

However the government has added an additional $1 billion in liability despite the fact that the program has $1.3 billion remaining before it reaches its maximum limit of $14 billion. This $1.3 billion is adequate—

[The Speaker]

The hon. member for Lévis.

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, I rise to speak to Bill C-21 at report stage, because I sit on the Standing Committee on Industry. I am a bit surprised because, at report stage, a report is made to the Chair and to other members of the House of Commons on what has gone on in committee. This is the stage at which one may speak of what is going on in committee.

In committee, all comments and questions on this topic were in favour of legislation allowing the federal government to guarantee bank loans. When we talk about banks, we include Quebec's caisses populaires as well, because the figures show that half the loans made to businesses in Quebec guaranteed under this legislation were made by that province's caisses populaires. This is therefore very important for small businesses.

But this morning I am astonished, because the purpose of the amendment is to cap loans at $14 billion. Not costs to the government, but the actual value of loans.

This is a rather surprising amendment, given that everyone seemed to be in agreement in committee, but it is all the more surprising considering that Bill C-21 is not a lengthy bill; it has only two clauses.

The first clause provides for a one-year extension of the legislation prior to its being amended, as the auditor general is suggesting in fact. We in the Bloc Quebecois agree that it should be completely overhauled, and that witnesses should obviously be heard, as the industry committee is proposing beginning in the fall, with a view to a complete overhaul of this legislation.

The second clause provides for increasing the amount from $14 billion to $15 billion in the interim. This would allow continued operation of the program for the duration of the extension.

What the Reform Party is saying is totally contradictory, because they talk of extending the act by a year but maintaining the present ceiling. Yet that ceiling has already been reached. What contradiction: they are in favour of financial guarantees to small business, but at the same time, they want the opposite—perhaps because they do not dare come right out and say it to businesses, their directors, or the people waiting for the jobs those businesses will create, and we know that 80% of new jobs are created by small and medium size businesses.

This morning we saw some pretty decent figures on employment, as well as a drop in the rate of unemployment in Canada and Quebec. There is some good news for Ontario and Quebec relating to job creation. Closer examination shows that those jobs are in small and medium size businesses.

One of the means—though not the only one—to create jobs is this act, which enables the Minister of Industry to guarantee small business loans. I find it a bit odd, which is why I wanted to point out the Reform Party's contradictions at the report stage. I wish to stay within the limits of parliamentary language, but let us say that they are, at the very least, inconsistent. Another term comes to mind, but I want to remain polite.

We will not join in on this delaying tactic, saying yes officially but really meaning no. We are not going to get into that. There are no surprises here. Yesterday during debate on our motion concerning federal interference in education, when we were voicing our desire to see no federal intrusion in education, the Reform Party kept saying that it agreed with the Bloc Quebecois, that it too thought jurisdictions should be respected, but that it would not be supporting our motion.

This morning, we have a similar situation in their approach to the Small Business Loans Act. It is inconsistent, but not surprising. This is not the first time we have seen them take this approach, because this is my second term in office and I remember the very early days when we were the official opposition and the Reform Party members and their leader said that the idea of an official residence for the leader of the opposition was a shocking one.

Four years later, with the shoe on the other foot, and the Reform Party now the official opposition, what do we have? The leader of the Reform Party is contradicting himself, saying that it is only a principle. Reality is another matter. Now that he is leader of the official opposition, he has agreed to live in the official residence. It was the same with the limousine and all sorts of other things.

I will make one final point, and then I will sit down. I do not want to go on and on about the flag business, but this week I saw people who wanted the right to display their flag but who were still unhappy. We saw one member throw his flag down in the House, and I also find that inconsistent.

[The Speaker]

I will recognize the hon. member for North Vancouver. I will let him begin his speech, if he would like, but I will interrupt him two or three minutes into his speech to go to statements. It is your call.

[Ted White, Reform, North Vancouver, BC]

Mr. Speaker, if members are ready to begin statements, I would be quite happy to do that and to start my speech at the end of question period.

[The Speaker]

If that is agreeable to the House, it will give us a chance to get a couple of more statements in today. The the member for North Vancouver, as far as I know, would be the last speaker on this subject.

We will now go to Statements by Members.

International Women's Week

[Murray Calder, Liberal, Dufferin—Peel—Wellington—Grey, ON]

Mr. Speaker, my compliments to the Reform member across the way.

As an MP from a rural riding I have seen firsthand the outstanding contributions that women make to rural communities. My wife Brenda and I have farmed together for many years. We are partners in everything we do. In fact she is now the full time farmer.

Twenty-six per cent of Canadian farms are operated by women and these women make a valuable contribution to the fabric of Canadian agriculture.

The farm women's movement during the past 30-odd years has focused on roles, responsibilities and the rights of farm women as equal partners. They have addressed important issues such as land ownership, training, rural restructuring, environmental, health and safety issues.

Farm women play an important role in fostering a broad public understanding about the needs of and potential for Canadian agriculture.

I take the occasion presented by International Women's Week to thank farm women and their leaders for their contribution to our agricultural sector.

Ports

[Roy H. Bailey, Reform, Souris—Moose Mountain, SK]

Mr. Speaker, the Canadian media continues to announce to international criminals that they do not have to worry. Smuggled goods are now being moved freely through Canadian ports.

The Regina Leader-Post recently reported that 90% of all armed robberies in that city are a direct result of increased drug trade.

Canada's port police have been phased out. Canadians are now asking whether the municipal police forces are being specially trained and whether the numbers are adequate to carry out the policing at our ports that Canadians deserve.

It is now imperative that the government announce to Canadians and the world that measures will immediately be put in place to establish a high class, high tech port security that has the power to say no to the international drug trade and provide Canadians with the peace of mind they so richly deserve.

Post-Secondary Education

[Andrew Telegdi, Liberal, Kitchener—Waterloo, ON]

Mr. Speaker, I rise today to congratulate the University of Waterloo engineering department and its undergraduate engineering students who participated in last week's Ontario engineering competition involving 100 competitors.

University of Waterloo students swept the competition, winning first place in all six design categories. I congratulate these winners and wish them luck at this weekend's national competition.

I also congratulate Wilfrid Laurier University for its second place finish in the university-private sector partnership category of the Scotiabank AUCC awards for excellence in the internationalization program. Its program, in conjunction with German students, investigated the marketing of a Waterloo company's software in China.

I give high praise to the government for supporting increased accessibility to post-secondary institutions and increased funding for research and development so that we are prepared for a knowledge based global economy, assuring our future economic well-being as a nation.

Social Housing

[Bernard Bigras, Bloc, Rosemont, QC]

Mr. Speaker, 410 residents of Rosemont-Petite-Patrie are impatiently awaiting vacancies in low income housing.

In 1993, the federal government eliminated all budgets for the construction of new housing units. The impact in my riding has been catastrophic, and the housing committee can no longer keep up.

How can this government claim to be concerned about young people, when it is leaving thousands of them out in the cold? The Liberals' priority is obvious: this government is obsessed with its visibility.

You can see for yourselves: $17 million for flags; $20 million for the Canadian Information Office; $1.5 million for the tourism contest; $400,000 for commercials that ran only in Quebec; $600,000 for pamphlets promoting distinct society; $550,000 in praise of Canadian passports; $40,000 for propaganda kits aimed at school children; and not one red cent, since 1994, for the most disadvantaged, who are still waiting for decent housing.

What is wrong with this picture, Mr. Speaker?

The Economy

[Lynn Myers, Liberal, Waterloo—Wellington, ON]

Mr. Speaker, I rise today to applaud the government for creating the kind of economic climate which has built tremendous confidence not only in my riding of Waterloo—Wellington but across Canada.

Let us consider the most recent economic and employment evidence. Unemployment has fallen to 8.6%. Full time employment rose by 84,000 jobs in February. Almost one-half of this February increase went to youth between the ages of 15 and 24 and two-thirds of this gain was full time work. Adult women also benefited by the February employment increase. This trend has been sustained over the past 12 month period. In that period full time employment has risen by 470,000 jobs.

All this spells good news for Canada and all Canadians. While we still have work to do, we are on the right track and Canadians know it.

Post-Secondary Education

[Carolyn Parrish, Liberal, Mississauga Centre, ON]

Mr. Speaker, this week I had a meeting with a group of senior officials from Ontario and Atlantic universities. It is not often we run into a lobby group like this one. They were here to thank the government.

They thanked the government for its outstanding focus on education and knowledge in the 1998 budget. They thanked the government for supporting students and for supporting research. They thanked the government for the millennium scholarship fund and the lasting legacy it will create.

The university and college presidents I have met and have corresponded with pledge their support for the government's focus on education. They are committed to realizing the full potential of these initiatives.

One thing they do ask the government to consider is the valuable contribution that researchers in the social sciences make to society. Compared to other fields such as science and technology, their contribution is more difficult to quantify in dollar figures. Let us not forget that we need a well functioning society if we are to fully benefit from the technological advances.

I urge members of the House to encourage the government—

[The Speaker]

The hon. member for Calgary Centre.

Taxation

[Eric C. Lowther, Reform, Calgary Centre, AB]

Mr. Speaker, some families are suffering more than others because of the government's high tax policies.

The tax assault on stay at home parents is particularly odious. Currently there is little to no tax recognition given to the value of staying home to care for one's children instead of putting one's kids in day care. Homemakers are becoming increasingly frustrated and are beginning to take action.

Calgary homemaker Beverley Smith has lobbied Canadian officials for two decades for equitable tax treatment but has had little success with unresponsive Liberal and Tory governments. She has now taken her complaint all the way to the United Nations.

On behalf of all Canadian homemakers Beverley will complete her submission to the UN Commission on the Status of Women, pointing out 11 areas under which Canada discriminates against homemakers.

Ms. Smith points out that others can deduct child care expenses but homemakers cannot. She has a strong case. Homemakers call on the government to stop—

[The Speaker]

The hon. member for Gatineau.

Foreign Affairs

[Mark Assad, Liberal, Gatineau, QC]

Mr. Speaker, tomorrow March 14, 1998 coincides with the 20th anniversary of the Israel invasion of Lebanon in 1978.

On March 14, 1978 Israel forces invaded Lebanon in what was called the “Litani Operation”, using 40,000 soldiers and highly sophisticated weapons of destruction including cluster and napalm bombs over eight consecutive days of systematic bombing.

On March 19, 1978, the United States permanent delegate to the UN Security Council passed resolution 425 on respect for the territorial integrity, sovereignty and political independence of Lebanon.

At that time, there was a glimmer of hope for Lebanon, but since then, the resolution has not been complied with—

[The Speaker]

The hon. member for Lévis.

Canada Economic Development

[Antoine Dubé, Bloc, Lévis, QC]

Mr. Speaker, on March 4, it was reported in the Canada Gazette that the name of the Federal Office of Regional Development-Quebec had been changed to Canada Economic Development for Quebec Regions Agency.

This name change, which puts emphasis on the word “Canada”, is but one more way the federal government has found to increase its visibility in Quebec.

I also want to mention the recent change of the French designation of the Canada Post Corporation to “Postes Canada”, at a cost of $8 million, and the heritage minister's famous flag operation, which has cost more than $23 million so far.

Add to that the Canada millennium scholarships and the grants that will be given out by the Canada Foundation for Innovation in the health sector.

The federal government is not fooling anyone in Quebec with its razzle-dazzle.