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.