Mr. Speaker, first of all I would like to remind the hon. member that as a result of the generous tax assistance provided by the federal government and many provincial governments, labour sponsored funds experienced very rapid growth in the past few years.
When the decision was made to limit the tax assistance, LSVCCs had about $2 billion in assets. Despite the fact that LSVCCs raised about 50% less in the RRSP season which followed the 1996 budget, their total assets surpassed the $4 billion mark at the end of 1997.
As well, let us not forget that the LSVCCs are not the only providers of venture capital in this country. During 1996 the amount of venture capital in Canada rose from $6 billion to $7.1 billion. The availability of venture capital for Canadian businesses has never been greater. In fact, I pose the question, is there sufficient capital available to meet the demand? Let me provide a few figures.
At the end of 1996 labour sponsored funds had $1.4 billion available for investment in small businesses. They invested about $400 million in 1996, a record year for them. Based on this information there seems to be no evidence of a shortage of funds available for investment.
This is not to say as the hon. member has mentioned, that there is no need for ongoing monitoring of the situation. On the contrary, preliminary figures do indicate that LSVCCs invested in excess of $600 million in businesses during 1997. This investment pace combined with the possibility of large amounts of redemption could signify, at least in some provinces, future shortages of venture capital.
Last year's RRSP season was the first under a reduced tax credit. We need to analyse the results, the adequacy of the supply of venture capital and the efficiency of tax incentives at improving access to capital for small and medium size businesses to be able to determine if changes are warranted.
I want to assure the hon. member as in fact the Minister of Finance has assured him, that this government will continue to monitor the situation very closely and take measures to ensure that venture capital is in supply in strong measure in this country.