Mr. Speaker, in discussing and listening to the speeches on this bill I am reminded of two analogies that I think should be made dealing with putting more money into a program that needs to be re-examined.
When I was a kid I always thought that when my mother gave me castor oil she said one dose was good, two doses would be twice as good. I think if we look at this bill carefully we will see that it establishes a plan which this government and other governments for the past 30 years have carried out.
When something does not produce exactly what is wanted, then instead of fixing it internally, looking at the program, we simply add more money. We just keep pouring more money into something in the hopes that it will cure itself.
That has not happened and as a result of that look what we are adding. We are adding more to this program but we have not brought about any conclusions. We have not solved anything that went awry with this plan ever since it was brought into force.
I am reminded of an incident in my lifetime that relates to governments pouring in more money. A World War I veteran had settled near my community. During the thirties he decided to make a living by raising sheep. On one occasion things were so bad he decided to ship a couple of carloads of sheep down to Winnipeg only to receive a letter from the meat company stating that the sheep did not cover the freight cost so would he kindly remit $4.78. My friend wrote back that he did not have $4.78 but he could send some more sheep. That is exactly how we looked at these programs. That is exactly what the government is doing with this program.
The auditor general's assessment of this states: “The lack of financing on reasonable terms and conditions has often been identified as a significant barrier to the growth of small businesses”. The auditor general is saying that by not properly looking at this bill and this program we are hindering the program and what the bill was intended to help.
I agree with the banks, the credit unions and other local financial institutions becoming involved with the money being loaned. The exception is that the small business loans program does not apply to farmers. I have often wondered why. Is agriculture not a business? If it is not a business, why is it not? There is no question that it is the biggest industry, the biggest business on an individual basis across Saskatchewan, Alberta and Manitoba.
The guaranteed loans available to businessmen through the banks, credit unions and so on are not available to farmers. Farmers are disregarded from bringing about loans as such under this act. They have to go to a federal government agency known as the Farm Credit Corporation. The Farm Credit Corporation should be a lending institution. Every major financial institution across the prairies that I have talked to, all the banks and credit unions, disagree in total with this government's giving powers to the Farm Credit Corporation as both the instigator and the banker of these loans. That is wrong.
In our examination of this issue we should consider agriculture, the operation of the farm, as being a business. It is an agricultural business. Farmers should be treated with more equity than they are presently being treated.
Under the present fee structure and the loss sharing ratio, it is uncertain according to the auditor general, and we know this to be true, that the government does not seem concerned about the ratio of losses to the number of loans made each year. When something is broken just pour some more money in and maybe it will go away. I do not think there is a reasonable chance that this government will ever make changes to the manner in which it approaches this very thing.
The auditor general states: “We have found a number of cases where contrary to the Small Business Loans Act the lender has charged administration fees”. We must be careful as we go about adding more money to this loan that those people who need the money and who are borrowing the money are not ripped off in a manner that is not approved by the act itself.
Oftentimes, in my experience in western Canada at least, we find that a loan is made to a business which loan can be up to $250,000. In the small communities in western Canada a $250,000 investment is made in a business in an industry in which there is room for only one business in a particular area or a particular trade. Another business is created in which only one business can normally survive.
What has happened across Saskatchewan in the small businesses in the small communities, the towns and villages and sometimes in the cities, is a new business in an industry is created with government money and government guarantees. That business divides the amount of business in the area in two. The person who has been in business for years suffers as a result of government money going into that business. Both businesses end up being failures. It ends up that the community does not have for example an apple business which was needed in that community.
These things must be looked at in depth. The very program that is designed to help small business often destroys existing businesses and then the other business destroys itself. It is a big problem throughout the areas with this act.
It is a scary thing as we get into the rural areas. There are provisions within this act to prevent a group of related businesses from gaining access to loans beyond what they are really entitled to. I have seen many times and I am sure we could draw a number of conclusions across Canada where groups of businesses have joined together under separate loans. Later they have created a business only to find that the massive debt owing on a guaranteed loan for the venture proves to be a downfall. They have not only ruined the capacity of the community in which they have made their venture but they also have created a debt for the people of Canada.
Instead of putting millions more dollars into a program it seems if the banking institutions were lending the money, more care would be exercised and more caution would be taken. There would be more detail in each loan going out. Instead, what is going on at the present time is all of this money is being sunk into another program and as a result millions of dollars of taxpayers' money will be squandered.
No one would disagree to money going to help small business. However we in Reform believe that it has to be approached in a businesslike manner. We do not think the way the act is right now is achieving that end.