Walt Lastewka

[Small Business Loans Act, February 19th, 1998]

Mr. Speaker, I listened very carefully to the member speaking on Bill C-21.

The bill is to extend for one year and to increase the amount from $14 billion to $15 billion. The member also knows that a total comprehensive study is in the works. Some changes were made in the 1995-96 timeframe after reviewing the bill and previous government experience.

Without getting into a whole pile of other things, does the member support the fact that we want to continue the SBLA and extend it for one year with an increase of $1 billion? Does he also support the second phase, which is to have the study completed in total by members on all sides of the House in committee? Does he agree that should be continued or not, without getting into a whole pile of other rhetoric?

[Division No. 86, February 16th, 1998]

Madam Speaker, I am pleased the hon. member for Halifax West has given me the opportunity to speak on the subject of shipbuilding.

Most Canadian shipyards are generally in good shape, providing repair and refit services and some new construction to commercial marine market and government fleets.

The federal government supports the shipbuilding industry in several ways. Our shipbuilding policy initiatives include the following.

First, we have made a commitment to use Canadian shipbuilders for the renewal, repair and overhaul of government fleets. We will continue the policy of domestic procurement for all federal ships and repairs where it is possible to do so.

Second, we have a 25% tariff on non-NAFTA foreign built ships with the exception of fishing vessels over 100 feet.

Third, tax measures are available to ship owners in the form of an accelerated capital cost allowance of 33.3% on new ships built in Canada.

Fourth, shipbuilders are also encouraged to keep pace with the new technology through a very favourable R & D tax credit system.

Fifth, our shipbuilding policy includes financing for commercially viable projects through the Export Development Corporation.

Finally, the federal government worked with the shipbuilding industry on an industry led rationalization process between 1986 and 1993. The industry decided it was necessary to reduce its capacity so that remaining shipyards could survive and remain competitive. The government supported these efforts at a cost of $198 million.

I conclude by saying that the federal government has given substantial support to the shipbuilding industry in the past and will continue to provide support through the initiatives I have just outlined.

Any changes to the existing policy must be looked at in the context of our existing financial commitment and our overall jobs and growth strategy.

[Small Business Loans Act, February 16th, 1998]

Mr. Speaker, I listened to the last message very clearly. I agree with a lot of what the member said, except for a few parts he probably went off script for.

There have been some comments made about the banks and about lenders. I remind the member that in addition to the six or seven banks there are 1,490 members who are lenders on SBLA, whether they be credit unions, caisses populaires, credit societies and so forth.

This bill basically is an extension of the SBLA for one year and the addition of $1 billion, from $14 billion to $15 billion.

I understand my colleague supports the bill. Could he expand on items? In addition to the banks, he has I am sure in Saskatchewan other lending institutions that are very key. They use the SBLA but perhaps they have not been mentioned here today. They are part of the SBLA program.

[Small Business Loans Act, February 16th, 1998]

Mr. Speaker, no. I think the SBLA program is an efficient, effective program to help start-up companies, to help young companies and expanding companies to expand.

Yes, we need to review small business loans. The auditor general made some comments. We will have a comprehensive review. However, I do not believe, as the member opposite and his party do, that we should stop it at this time. Comments were made by the member for Saskatoon—Humboldt that the SBLA program should be stopped until we have the review. I do not believe that should be done.

I believe that we should extend it, that the review should continue and that the hon. member will have a chance to come to the industry committee to see whether it is a subsidy. I do not think it is. I think it is part of making things happen in our country.

[Small Business Loans Act, February 16th, 1998]

Mr. Speaker, I understand where the hon. member is coming from. Since we made changes in the 1995 proposal, the objective was to make the SBLA program more and more self-sufficient.

The hon. member knows, coming from western Canada, that the four western provinces have used the SBLA to a very high extent, in fact more than any other part of Canada.

By using the SBLA program, what in effect we are doing is more and more new and young businesses are into it and especially under three years. As I mentioned earlier, almost 60% of the SBL applicants are under the three year mark as firms and almost 40% are starting companies.

The objective there is to continue to push the banks, which I know the hon. member does in the industry committee, to loan to small businesses. I think we both have the same objective, more money available for firms, especially the start-up firms, and more jobs created in Canada.

[Small Business Loans Act, February 16th, 1998]

Mr. Speaker, I would like to inform you that I am splitting my time with the member for Mississauga West.

Further to comments made on Bill C-22, I would like to point out that by extending the lending period and by raising the loan ceiling period we will be ensuring that more of these businesses will have continued access to the financing they need to grow and create jobs.

The SBLA program compares very favourably with similar programs that have been set up in other countries. A recent study was conducted by Dr. Alan Riding of Carleton University entitled “On the Care and Nurture of Loan Guarantee Programs”. The study examined many international programs similar to the SBLA program. In it Dr. Riding concluded that the SBLA scheme has much to recommend it. Among its more attractive features are its extraordinary low administrative costs and low costs associated with honouring guarantees.

Administrative costs and the costs of default associated with any other national approaches, whether it be U.S., U.K., Japan or Germany, are many times greater than those of the SBLA.

Clearly the SBLA is doing its job in support of Canada's small business sector and doing it well. The bill before us will permit the time needed to review the program as contemplated by Parliament when it provided for the current five year lending period.

I humbly request that the House of Commons pass this bill so that we can get on with the next phase which is a comprehensive review of the SBLA.

[Small Business Loans Act, February 16th, 1998]

Mr. Speaker, as was noted in the Speech from the Throne that opened this session of Parliament, the stimulation of job creation has, is and will continue to be a major objective of the Government of Canada.

Over the past four years the government has made progress and put in place the foundations for economic strength and increased confidence. The government has regained the ability to address the priorities of Canadians while living within its means. The budget will be balanced no later than, we hope, this fiscal year and the debt to GDP ratio has been put on a permanent downward spiral. Interest rates are affordable and inflation is also at a very low level.

The government intends to continue to pursue its successful course and take further action to encourage new investment to create new jobs and to generate the nation's wealth necessary to assure Canadians of a stable and secure future. This is the context which the government has brought forward Bill C-21, an act to amend the Small Business Loans Act.

Mr. Speaker, I should mention that I will be sharing my time with the member for Mississauga West and it looks like I will be sharing it with question period as well.

We all know the importance of the role that small and medium size enterprises play in the Canadian economy and the degree to which they are responsible for the creation of new jobs. The bill before us is designed to help ensure that the small business sector can continue to be a vital and dynamic part of the Canadian economy.

Bill C-21 will increase the authorized lending ceiling of the small business loans program by $1 billion from $14 billion to $15 billion. It will extend the current lending period to March 31, 1999. There are no additional program changes contained in this bill.

By passing this bill we will also be permitting the review process for the small business loans program to go forward. This is very much in the best interests of Canadians because the SBLA program is an excellent one. It is an issue that fulfils a real need in Canada's business support framework.

As we deliberate on this bill before us, I think it is important to consider the fact that almost every country in the developed world has some form of loan guarantee program for small and medium size businesses. Why? Because these programs are set up primarily for small young firms, companies that by and large have not yet had the time to develop a sufficient capital base and therefore the banks are not generally keen on lending them money. Yet it is these very firms which create so many of Canada's jobs.

The SBLA allows the federal government to stand behind loans made to small and medium size businesses by providing an 85% guarantee against the individual loan losses. It is important to note that the government role in this program is as a backup only.

Private sector lenders are entirely responsible for making loans under the SBLA program and for evaluating the businesses which apply. The decision to offer an SBLA loan to an eligible small business is taken exclusively by the private sector lender. Lenders are expected to follow normal commercial lending practices in authorizing SBLA loans. All loans are registered with the SBLA administration office of Industry Canada.

When a lender submits a claim for loss reimbursement, federal administrators audit the claim to ensure that the lender has complied with all the requirements of the SBLA and SBL regulations.

Let me emphasize that the program is not a subsidization of business. In 1995 Parliament made changes to the act that moved it toward cost recovery. Since these changes increase the price of SBLA loans, it is likely that more of the intended beneficiaries will access it.

Lenders remit a one time 2% registration fee to the government which the lenders may charge back to the borrowers. In addition the lenders pay a 1.25% administration fee on their SBLA portfolio which may be passed on to borrowers through interest rates only.

This fee structure is essentially a user pay system designed to cover any lender's loan losses under the program. Thus the SBLA program has been reformed to end subsidies and become self-sustaining. Critics are dead wrong when they try to characterize it as a handout. The program has been set up to help small firms and entrepreneurs get over some of the most difficult hurdles that confront them particularly in their early years.

The average loan made under the program during fiscal year 1996-97 was for $65,000. Most of the firms have fewer than five employees. The companies that are getting the loans are the ones that are now creating the jobs in Canada's economy. They are the young creative companies, not the established big corporations which have been shedding their employees in the 1990s.

Without this program some of our best and most innovative small companies would be denied financing, not because they are not viable but because they are new and young and are seen as presenting a high risk. In other words they represent precisely the sort of people and firms that we should be encouraging in order to provide the jobs needed by Canadians and particularly Canadian youth. This is especially true in light of the latest employment statistics which indicate that the SME sector created 81% of Canada's job growth in 1996-97.

I mentioned that Bill C-21 will keep the SBLA program going until March 31, 1999. The government is continuing to update and improve the program by carrying out a comprehensive stakeholder review. The extension under consideration will give us time to complete this review and further improve the Small Business Loans Act as we have improved it in the past.

The goal is to make changes to the SBLA to ensure that the government can continue to address marketplace gaps on a fiscally sustainable basis while minimizing overlap and duplication with private sector financial institutions.

In carrying out its comprehensive review, the government will certainly give full and complete consideration to the recommendations and suggestions the auditor general has made in his review of the SBLA, particularly with regard to a more detailed and updated evaluation framework and the need to eliminate any loopholes that may permit project splitting. The auditor general's report pinpointed some program weaknesses and suggested a number of remedies. Industry Canada has already implemented many of his suggestions and is in the process of implementing more.

The government is determined to create a climate in which Canadian small businesses can thrive. One of our key challenges in this regard is to ensure that the banks and the financial institutions become more flexible and open with regard to the needs and opportunities of small businesses, particularly with regard to lending practices. By passing this bill the House will be helping to do just that. During fiscal year 1996-97 more than 30,000 firms benefited from the SBLA program.

[Small Business Loans Act, February 16th, 1998]

Madam Speaker, I listened with interest to the remarks made by the hon. member for Fundy—Royal, a new member of the House whom I have come to know over the last number of months.

I detected in his speech some changes from the Mulroney years. If my notes are correct in following this issue over the last 20 years, during the previous government's time there was an attitude of increasing the definition of small businesses to include higher revenues and bigger businesses. However I noticed from the hon. member's speech that he wants to centre on smaller businesses under the $250,000 small business target. I am sure that is a change but I would like the hon. member to confirm it.

I am sure the hon. member knows that of all the SBLA loans, 40% go to new businesses and almost 60% are in the small business category which he mentioned.

[Louis Riel Day, February 13th, 1998]

Mr. Speaker, in co-operation, as this House has seen many times, I will shorten my speech to give the hon. member a chance to also speak.

I rise today to speak to Motion No. 108 to revoke Louis Riel's conviction of August 1, 1885 and to declare a day in his honour.

In discussing the merits of this motion, there is definitely one thing on which we can all agree. That is the important contribution of Louis Riel to the building of this country. In tribute to this contribution this House on March 9, 1992 overwhelmingly adopted a motion to recognize Louis Riel as a founder of Manitoba and a contributor in the development of Confederation. At that time the House was reminded of Riel's many accomplishments and of his stature within the Metis community.

There have been other tributes in the recent past to honour Riel and other Metis leaders in recognition of their contribution to Canada and the Metis movement. As this House is well aware, Thelma J. Chalifoux, a Metis woman from Alberta, was recently summoned to the Senate. Ms. Chalifoux is both the first Metis person and the first aboriginal woman to sit in the Senate. Her appointment was in large part due to her unwavering dedication to Metis issues. Judging from the welcome remarks of her fellow senators, she is expected to represent well this cause and the spirit of Riel.

Louis Riel had a vision for this country over 100 years ago. That vision is alive and well today as articulated by the thousands of Metis who promote Metis culture and revere his memory.

Riel was a man of action, a man who looked forward and into the future. Given my understanding of Riel, I believe that if he were here today he would counsel this House to look forward, not backward, in finding ways to recognize and honour his accomplishments and those of other Metis leaders who contributed greatly to the development of Canada.

He would be urging us to focus our energies on finding solutions to our present day problems and building for the future. He would insist that Metis have an opportunity to participate in the development of these solutions. With that in mind I will spend a few minutes talking about what the federal government is doing today to advance the interests of Metis and off reserve aboriginal people.

As many are aware, the Minister of Natural Resources has been assigned by the Prime Minister to fulfil the role of federal interlocutor for the Metis and off reserve aboriginal peoples. In that role, the minister acts as a point of first contact and where necessary as a facilitator between the Metis and off reserve aboriginal peoples and the appropriate federal ministers and departments.

In addition to that role he oversees the federal government's participation in the tripartite self-government process which is the forum being used to negotiate self-government with Metis and off reserve aboriginal groups.

On August 10, 1995 the federal government announced its approach to the implementation of the inherent right and the negotiations of self-government for aboriginal people including Metis and off reserve aboriginal people.

The federal approach contemplates various practical ways of implementing self-government for Metis and off reserve aboriginal people, including the development of self-government institutions to provide services, the devolution of programs and services and forms of public government.

For the past several years the federal government has participated in bilateral processes with both the Metis National Council and the Congress of Aboriginal Peoples. The bilateral process provides a forum for the congress and the council to discuss issues of utmost importance.

On January 7, 1997 the interlocutor and the Minister of Indian Affairs and Northern Development unveiled “Gathering Strength: Canada's Aboriginal Action Plan”. It is an action plan to renew our relationship with the aboriginal people who are both on and off reserve.

Under the theme of healing and reconciliation in “Gathering strength”, the federal government is seeking appropriate ways to affirm the contributions of the Metis people and to reflect Louis Riel's proper place in Canada's history. The work is under way. It is founded squarely on consultations with the Metis, not arbitrary partisan actions.

In closing I return to my initial comments. Louis Riel was a builder. He was working to build a society where his people could make the important decisions that confront us all in building a better future. He was not a separatist. He wanted in, not out. With the spirit of partnership embodied in “Gathering Strength” we will find appropriate ways to reflect his proper place in our history as a builder.

[Supply, February 13th, 1998]

Mr. Speaker, I see the member wants it both ways. Get involved but do not get involved. During the election it was made very clear that 50% would go against the debt and tax reduction and 50% would be spent on social programs and targeted programs for the good of Canadians, and that is the program for the government.

Canadians have said that over and over despite some people not agreeing with it. Canadians have said get rid of the deficit, work on the debt, but spend money on social programs and target programs.