Mr. Speaker, just a few weeks ago, at the end of August, we all witnessed how volatile and unpredictable economic forces can be.
Stock markets and national currencies were whiplashed overnight during a sudden explosive global crisis of confidence. Fortunately it was short-lived panic, but at times like this every sector of the economy feels vulnerable. Particularly vulnerable to cyclical economic shifts are small and medium size businesses.
Many do not have the financial resources to wait out economic swings. Even in periods of stability, largely because of the difficulty of getting adequate credit at reasonable rates, it is a formidable challenge to manage a small business profitably.
However, manage and succeed they do. The vision, the energy, the perseverance and the plain hard work of Canadian entrepreneurs have made small business an absolutely indispensable component of our national economy.
These businesses continue to be the fastest growing segment of the economy. They also continue to be the biggest generator of jobs by far in every region of the country. It is obvious that this community will continue to benefit many Canadians if we take the measures necessary to facilitate its health, expansion and profitability.
An important contribution that we make at this time for this sector is to provide it with stability. The House can go a long way to help establish a climate of stability for small business by giving its approval to Bill C-53, the Canada Small Business Financial Act. This stability is provided through the bill which will continue to provide the small business community with access to financing.
Maintaining the program on a cost-recovery track will enhance the certainty of continuing taxpayer support for this important risk-sharing program.
We are eliminating the aggregate lending ceiling which has created uncertainty about the program in recent years and replacing it with a more realistic mechanism to continue the program.
This will enhance lenders' and borrowers' confidence that the program will be there in the future to facilitate financing. Stability will be enhanced by eliminating the sunset clause and replacing it with a regular review during which lending will continue.
Finally, by maintaining most of the parameters of the current legislation, stability is further ensured. Everyone who deals with the program knows where they stand.
The bill also contains a major benefit for Parliament. This is the provision for a recurring five year parliamentary review of the Canada Small Business Financing Act program.
It also provides for the development of a comprehensive accountability framework which will give Parliament improved and more accurate data and performance measurements against which to evaluate the program's financial standing, its efficiency and its success in meeting cost recovery.
The program evaluation framework and the performance measures that are being developed will also address the concerns raised by the auditor general and the Standing Committee on Public Accounts. When he appeared before the committee, the auditor general stated that the program was generally well run, with a minimum of costs.
The program, as hon. members know, has since been subjected to a comprehensive review, analysis and assessment. This review took account of the observations and recommendations of the auditor general. This will eliminate the periodic concern that the program will not be available and will permit Parliament the time it needs to carry out a careful review of its operation. This has not always been possible in the past because of the deadline on lending authority created by the sunset clause.
When the minister launched a review last November he set three goals for any program that would emerge as a result. He wished to ensure that the program would remain relevant to the needs of small business, be financially self-sustaining and have an adequate accountability framework.
The comprehensive review conducted by the department included examining issues with borrowers, potential borrowers, lenders and major industry associations.
This review included a series of studies in the following broad areas: economic impact studies, compliance and default studies, stakeholder consultations, cost benefit analysis, and future evaluation and capital leasing studies.
In launching the comprehensive review the Minister of Industry set the goal of developing an appropriate accountability framework for the program as one of the three conditions for continuing the program. The framework is intended to provide parliamentarians with answers to questions that have frequently been asked about the program, questions such as the relevance of increasing access to financing for small business; the need for continuing federal government involvement; its impact on the creation, maintenance and displacement of jobs; the performance of borrowers; whether the program as designed meets its objectives; whether it overlaps with other programs; whether small businesses have other financing needs not met by the program; and whether program costs can be predicted accurately and recovered.
In addition to this, the framework will also report on progress toward achieving cost recovery and the reliability of forecasting for the program.
The pertinent information that parliamentarians will need to accurately measure the performance of the program will be provided through better methods of collecting data. Administrative changes and new regulatory provisions will ensure that information is collected. For example, the new legislation requires lenders and borrowers to provide certain information needed for program evaluation. An accumulating database will monitor performance and aid in assessing the targeting of the program. More categorized information on program use and on impacts such as job effects will be included in the annual reports.
There is a provision in the bill for recurrent five year reviews of the program. These will be conducted with the evaluation framework and empirically sound performance measurements. They will provide the House with the information it needs to make decisions about the program.
The accountability framework for the program that I have just described is the kind of tool that this House needs to make well-informed judgments and appropriate decisions on complex issues that have a direct bearing on the livelihood of millions of men and women, the small entrepreneurs in this country and the millions more that they employ.
I know that members of the House are well aware of the crucial significance of small business. I also know that each one of them would want to have available the best evaluation tools and the most reliable information possible when making decisions that can affect the health and prosperity of the small and medium size business sector.
It is for this reason that I am glad this bill has been tabled so early in this session so the industry committee can have a thorough review before passing it on to the other House.