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”.