Reg Alcock

[Small Business Loans Act, October 27th, 1995]

Mr. Speaker, it gives me pleasure to speak to the debate today. I have been involved in the question of how we provide financing to small business for some time and it is my feeling that the act in some way is somewhat misnamed.

If we reflect on it for a moment, perhaps we should call it the Canadian banking system failures act, because it is the failure of our banking system to adequately provide support to small businesses that makes the act necessary.

In the late 1980s and early 1990s I had the privilege of co-chairing a task force on the Manitoba economy which travelled the length and breadth of the province. It held meetings with chambers of commerce, town councils, small business people and large business people from all over the province of Manitoba. The one thing we heard over and over again was that for small, remote centres access to financing was extremely difficult.

We must ask ourselves why that is. We have a comprehensive system that the government has supported since the creation of the country. Banks throughout the country function in an oligopoly and have incredible protection from competition. They have the ability to fall back on the government and the taxpayers to bail them out whenever they make a mistake in a foreign country.

Why cannot banks, which as a result of that protection have become incredibly profitable, adequately meet the needs of small business? That is an important question we must ask ourselves and must keep asking the banks until we get an answer. We are correcting a flaw that should be corrected by the banking system.

We are talking about raising the loans, capital or equity available to small business to an average level of about $4 billion a year. We say that will cost us, if it spirals the way it has been, about $100 million a year. I ask members to reflect on what percentage of last year's bank profits is $100 million. If they do the mathematics they will find that it is something less than 1 per cent. Is it too much to ask the Canadian banking system to invest 1 per cent of its profits in Canadian small businesses? Why is it incapable of meeting this challenge?

An example that comes to mind is a small business in south central Manitoba in the riding of the member for Lisgar-Marquette. It had 12 employees and made electrical equipment. It designed a yard light. The principal of the business was something of an amateur inventor. He developed a number of successful products that are now being marketed throughout the world and can certainly be found in almost every farmyard in western Canada.

Through ingenuity and hard work he managed to convince a giant company, Quebec Hydro, of the efficiency of one of his products. Quebec Hydro gave him an order. It is a huge company that is certainly capable of paying its bills. The first order in the series was something like $9 million. However there was a catch. He had to meet the just in time requirements that are quite common in today's business world. He had to run up his inventory to a level that would meet the demand requirements of the order from Quebec Hydro.

Despite the fact he walked into the bank he had been doing business with for 20 years with the signed contract in hand, he could not get the bank to lend him the money. It could not happen because it was larger than the bank's policy for that area or because the bank did not understand that a business capable of doing that amount of business could exist in a small rural town in Manitoba. Whatever its rationale the bank did not respond to his need.

The banking system that we protect, that we bail out when it gets into trouble, that we protect because we want to have secure access to capital available for the economy, could not respond to his need. It is a tragedy.

If we look at whom we are talking about here and we look at the Carleton study we see the average business which received funding under the legislation had 7.5 employees. They have annual sales of roughly three-quarters of a million dollars and before tax profits of just under $50,000. These are the small businesses of the country.

On average 88 per cent of the businesses that received funding under the act created 5.3 new jobs. They did what we have claimed small business would do. If we give them access to capital they will create the jobs and they will create per dollar more jobs than will large corporations. That is one of the reasons we agreed to increase the total lending available under the legislation.

Nearly 30 per cent of small businesses reported that as a result of the loans they were able to obtain they became more efficient and decreased their costs, and 41.7 per cent reported their loans helped their firms to survive.

I support the legislation. It is a necessary and important change that makes it possible for small businesses in Canada to continue to fulfil a role in our community that is important to all Canadians, the creation of jobs, allowing people to obtain work and live in dignity. This is the foundation of the economy. Why cannot large banks, the banks with the billion dollar profits, find it within their operations to fill this niche? Why cannot they find resources within their huge operations to meet the needs of small businesses?

We have a real problem. I was disappointed today to hear the question of the member of the Reform Party from Lloydminster who spoke strongly against regional economic development and against the provision of capital to businesses in western Canada. It showed a profound misunderstanding of some of the problems businesses face.

Another example I will use that came across my desk recently is of a company in Winnipeg, not a small town but a relatively large centre with some financial strength. It is extremely profitable and doing very well in the construction sector. It has lots of work and has never been at risk. All of a sudden its credit lines were changed. It had not defaulted on anything. Its business was still strong. It was doing well. It inquired into why there was a change in the payment of certain bills from 90 days to 30 days.

The answer had nothing to do with western Canada. It had nothing to do with that business. The answer was that losses had been sustained in southern Ontario.

There is a real problem. If we talk to people with medium size businesses in western Canada we find there is a serious problem. They can grow to a certain size but to get above that the capital is not there. Or, if it is there, they have to work harder and pay more for it than a similar business in Toronto. That is not right. That is a failure of the market in the same way that the legislation represents a failure in our banking system.

Those are the places where government can play a role. Those are the places where government can act to ensure that the necessary resources are available so small businesses continue to produce the jobs members of Parliament and our constituents want them to produce.

I support the legislation I am sure all members of our caucus support it. We will be voting for the legislation when it comes forward. We are saddened by the fact that the banking system has been unable to respond to this need. We feel it is such a vitally important area that the government must continue to be involved and strengthen its involvement in support of small business.

[Canada Transportation Act, October 2nd, 1995]

Madam Speaker, it is always a joy to rise in this House and follow the member for Winnipeg-Birds Hill. Excuse me, it is Winnipeg Transcona; I apologize for that. I would not want to confuse him with the member for Birds Hill, who is a Liberal and represents his constituents very ably and helps them understand the needs of doing business in the 20th century and not the 19th century, as the member for Winnipeg Transcona does.

It is passing strange to me to note how the NDP, once a leader in social justice in this country, has become a conservative party, simply refusing to accept any kind of change or acknowledge that any kind of improvement should take place anywhere, anytime.

Like the previous member, I want to briefly comment on the process. I am delighted that the government has chosen to go this route with this bill. I am somewhat astounded at the remarks from the Reform Party, who seem to be opposed to this.

What has happened in this Parliament since the new government arrived in 1993 is we changed the rules of the House in a manner that allows the people of Canada to participate in important debates on public policy prior to the government making up its mind finally on a piece of legislation. It is an opening up and an inviting into the process, rather than a fast tracking, as the member for Winnipeg Transcona would have us believe.

I think the minister has done a great deal in a very short period of time to deal with the regulatory burden that has been imposed on this country, some of it for good reasons and some of it perhaps we have outgrown. I think we owe the minister a vote of thanks for allowing this debate to take place in this fashion and for steering this debate.

We have the member for Hamilton West, the chair of the transportation committee, who is well known to this House, who is very experienced on these matters. I am assured he will give people right across this country an opportunity to come before the committee and put on the table their issues on this very important matter.

The parliamentary secretary, the member for London East, has been working tirelessly to see that members of this House are informed on this issue and are responding to issues that have been raised by constituents right across the country.

I want to make a comment on an earlier change this minister has brought in, the changes in the WGTA, which represented a stepping back from subsidy and regulation on the part of this government. Two days ago in my home town of Winnipeg there was an announcement by Schneider's that they are going to open a very large, two million hogs a year, meat processing plant. At last we are doing what western Canadians have been calling for for a long time: we are taking the false subsidies out of the rate structure and we are allowing the development of secondary processing in the prairies, where it should have been for a long time. We are all very pleased about that, and we are pleased it is this government that finally has the courage to challenge the burden that has been imposed by regulation.

I am not going to stand up in this House and say all regulation is wrong; it is not. Whenever there are imperfect markets, whenever monopolies exist, for example, or whenever the public good needs to be protected, there is a need for government to act, and act in a manner that attempts to level the playing field between competing interests. That is what this is all about.

The government has said that while it has owned the CNR it has imposed burdens on the railway for reasons other than the commercial interests of the railway. In an environment where change is taking place so rapidly now and where there has been such a tremendous evolution in transportation, it is time to revisit that. It is time to ask whether or not these regulations are serving the purpose for which they were intended.

As chair of the western and northern caucus I can tell the House that we take great interest in the particular matter. Transportation is vital to all regions of Canada, but nowhere is that seen as vividly as it is in western Canada with its tremendous distances and sparse populations.

In addressing Bill C-101 this afternoon I cannot emphasize too strongly the importance of rail transportation to western and northern Canada. Commodities such as coal, sulphur, grain and petrochemicals must be shipped substantial distances from points of origin in western and northern Canada to markets around the globe. For most of these movements highway transportation does not present an effective competitive alternative to rail transportation and inland water transport is non-existent. For the great majority of the transportation requirements of western Canadian industry rail is the only realistic way of accessing export markets.

Canadian railways rely heavily on resource based products for their revenues. Intermodal traffic handled by the railways is highly truck competitive and has limited profitability. The eastern Canadian operations of the railways by their own public statements have not been profitable in recent years. Railways accordingly look for their profitability to the resource based industries of western Canada. It is essential that we do not endeavour to solve the financial problems of railways by creating a bigger problem, namely to give railways greater leverage to increase freight rates in western Canada and thereby impair the ability of western Canadian industry to compete on a long term basis in world markets.

There is widespread agreement on the need for railway reform in the country. Railways are burdened with excess track and impediments to productivity improvements. Bill C-101 will permit CN and CP to sell or abandon unprofitable trackage without regulatory intervention and will encourage lower cost short line railway operations to be developed. We believe this makes good economic sense and the legislation is to be commended for enabling railways to become more cost efficient.

There is widespread agreement in the House that the encouragement of a competitive railway environment in Canada is the best way to achieve efficient and cost effective rail service. This, however, is not achieved by complete deregulation as some would allege because there are many industries in western Canada that are essentially captive to rail transportation.

Railway regulation has historically served a different purpose than the regulation of other modes of transport. Trucking regulation restricted available trucking services and limited the freedom of choice of consumers. The deregulation of that industry had a pro-competitive result.

Railway regulation has served a different purpose. It protects captive shippers against the excessive monopoly power of the railways. Legislative provisions which give competitive options to railway customers promote competition. It is the stated policy of the government that those provisions, called the shipper relief

provisions, will remain untouched in the present legislation. We are in full agreement with that approach.

I do have grave concerns, however, with certain sections of the proposed legislation that will make it more difficult for railway customers to obtain access to the Canadian transportation agency should the need arise. These barriers to agency access are counterproductive to a competitive railway environment and are unnecessary based on the experience of the last eight years.

The shipper relief provisions have been used by railway customers on only a handful of occasions. Their principal benefit has been to provide railway customers with some bargaining leverage in negotiating rates and service agreements with the railways. In this regard they have been particularly successful, as virtually thousands of rate and service agreements have been entered into between rail carriers and their customers and only when agreements could not be reached has recourse to the agency been required. Accordingly there is no need to construct barriers or fences to prevent their continued utilization. This will only have the effect of impairing their efficiency and making it more difficult for commercial arrangements to be concluded.

Section 113 of the proposed legislation provides that all rates set by the agency must be commercially fair and reasonable, while as a general principle no one could reasonably argue that rates should not be commercially fair and reasonable. The problem is that there is no definition of what is commercially fair and reasonable in the current bill.

Subsection 34(1) will enable the agency to order the payment of compensation for any loss or delay as a result of a proceeding which is found to be frivolous or vexatious. While this again does not appear to be unreasonable on the face of it, I am not aware of any pressing reason for its inclusion in the legislation. There is no history of frivolous or vexatious applications being filed with the agency and should a proceeding be initiated the agency has the jurisdiction to assess costs against an offending party.

I am concerned that this provision could operate as a deterrent to a railway customer who has a valid proceeding to advance before the agency. The chilling effect of a large damage award, should the application be unsuccessful, could well cause a railway customer not to proceed with a valid application.

A further area which I know the committee will consider concerns the running rights provisions. The provision to allow railways to sell or abandon lines will lead to, it is hoped by many, the creation of a great many short line railways. Absent the right to run as was originally proposed to the first competitive interchange where they can receive two bids for their cost of transportation and short line railways will remain captive in a less free environment than they currently have.

I appreciate very much the opportunity to speak on the bill. I know the committee will take the time to hear from many Canadians who are very concerned as we move to a new environment for rail transportation in the country.

[Joseph Richot, October 2nd, 1995]

Mr. Speaker, representatives from all political parties gathered this morning in the rotunda of the Manitoba legislature to unveil a plaque to commemorate Father Noël Joseph Richot.

Father Richot was an adviser to Louis Riel and led the delegation that negotiated the terms of the Red River Colony's entry into confederation. Through his arguments, the colony obtained provincial status and bilingual and bicultural institutions. Father Richot worked to expand the francophone population in Manitoba.

With this 125th anniversary of Manitoba's entry into confederation, it is appropriate to honour Father Richot at the Manitoba legislature, a provincial institution he helped create.

[Research And Development, June 8th, 1995]

Mr. Speaker, as Canada adjusts to the new knowledge based economy, those organizations who are the major producers of knowledge are struggling to find the resources to meet these new challenges.

The second largest commitment in the red book was the $1 billion commitment to research and development.

My question is for the finance minister. Why has there been a delay in implementing this promise?

[Employment, May 31st, 1995]

Mr. Speaker, there were two parts to the economic plan outlined in the red book. The first was to get our finances under control and the second was to stimulate job creation.

My question is for the Minister of Finance. We have been bold in setting targets for reducing the deficit to 3 per cent of GDP. Why is there no target for a reduction in the level of unemployment?

[Supply, April 27th, 1995]

Mr. Speaker, I will only take a minute to respond.

I would urge the member to get a copy of the Canada Health Act. There is nothing in the Canada Health Act that prevents local involvement, local control. We have medical regions in my province. The hospitals have boards. There are some restrictions. The Canada Health Act states that the provinces will pay for any service that is medically necessary. We cannot decide in a local region to de-insure somebody for a medically necessary service. We cannot make that decision because we as Canadians made a decision that everybody in all parts of the country would have access to medically necessary services.

The member raises the spectre of a huge bureaucracy centralized in Ottawa that makes all these decisions. Does the member know how many people it takes to administer the Canada Health Act? Has the member ever bothered to check the size of this huge bureaucracy? There are 25 people who make the decisions about the Canada Health Act.

I have nothing against local control and local involvement. That is something we promote. We went around designing a series of health regions with elected boards and everything else. It was done in British Columbia and Manitoba. However, that is very different from saying that we will have a two-tier system where the rich get one kind of help and others do not, or that rich provinces will have a particular kind of health care system and poor provinces will not. We are all Canadians who want to see a country that includes and brings everybody into the Canadian family, not one that kicks a few out.

[Supply, April 27th, 1995]

Mr. Speaker, I thank the member for his question.

I absolutely agree with the member. All sorts of areas have to be looked at, evaluated and tough decisions have to be made. That is what we are doing. That is what the budget which was tabled here not so long ago was all about. That is why people in every constituency across the country are feeling the pinch. It is because we have made some of the toughest fiscal decisions made by a government, at least in the last quarter century.

The difference comes in this way. I was in a provincial legislature that supported health reform. We said that we have to get costs down in health care. We advocated very strongly and the health care professionals worked very hard to do exactly that.

Procedures which used to cause a week or 10-day stay in the local hospital near me are now done in one night. Many are done on an out patient basis. All sorts of reorganizations have been undertaken in order to reduce costs, be more efficient, deliver better service, faster and cheaper. However, we have not made the reform of saying one person can have health care but another cannot. That is the difference in the Reform approach and what we are doing.

Change is a fact of life. There can always be change. There can always be improvement. We can always do things differently. But as Canadians we made a commitment that we would be in this together. That is the difference.

[Supply, April 27th, 1995]

Mr. Speaker, I appreciate your alerting me to the time.

I would simply like to say that I want to thank the members opposite for bringing forward this resolution. I reject its intention absolutely and completely. I am saddened by the position that they have taken on so vital a service to this country. I do appreciate the opportunity they have provided me to stand up and say how strongly I and my party support health care and medicare in this country and reject the position taken by the party opposite.

[Supply, April 27th, 1995]

Mr. Speaker, I thank the hon. member for Beaver River, once again, for giving me a standing ovation.

Take two aspirins and call me in the morning.

We have a problem so cut the deficit. That is their only solution. Do not look at what is happening within the services that are being provided, do not call upon the medical community to find more efficient and more effective ways to deliver services. Cut the deficit. Cut the funding.

The member for Beaver River called upon me to talk a bit about the Liberal approach to this. The leader of the Reform Party talks about cutting the deficit. In fact, total savings from our Liberal budget will be $29 billion over the next three years. This budget represents, by everyone's criteria, the strongest fiscal action taken by a government, certainly since the war years.

I was on a local radio show with a fellow by the name Peter Warren back home, who has been on the air for 25 years. I asked him if he had ever seen a tougher budget, and he said no.

This government is living up to its promises to be fiscally responsible, but it is being fiscally responsible in a morally responsible way. It is not throwing the weakest people out of the boat. It is not saying let those folks who can afford it go off on their own and do what they want and forget about the others. It is saying we are all in this together, we are all part of the same family, we are all part of the same country, and we will solve these problems.

One of the issues the Minister of Finance talked about over and over again was fairness, that we would do this, we would swallow the tough medicine, we would make the tough decisions, but we would do it fairly.

In the speech of the leader of the Reform Party he talked about how the Prime Minister's speech contained no workable framework or plan whatsoever for the reform of medicare.

I do not know where the leader has been. He has not been in the House that much, but certainly has people who can read, who can talk about the council, who can look at the work the minister has been undertaking to work with the provinces, to work with people to find solutions for what are some very difficult, very complex issues that confront all of us.

The federal government is already engaged in discussions with all the key players. A number of provinces, the conference of the Ministers of Health, the federal-provincial advisory committees, bilateral meetings with health organizations, and consultations with Canadians through the National Forum on Health, ensure that all parties are informed and working together to ensure that Canadians have access to a responsive, effective, and affordable health system.

There is another aspect to this. If the member for Beaver River wants to talk about the cost, there is a very significant cost to poor health. There is a very significant cost to poor children. There is a very significant cost to unhealthy children.

The fact is that universal access means, yes, that my children get coverage, which I can afford to pay for, but it also means that those who cannot afford it get coverage. It means that we also care about their public health needs. It means that kids go to school stronger, more fit, more physically active and more ready to learn. It also means that people are able to pursue careers. It means that people are more able to be productive, working and contributing to society. Good health care is a foundation of a healthy community. To risk destroying that in the cavalier way the Reform Party does is irresponsible.

The Reform Party has been accused at times of speaking in code. I want to add a bit more code to the discussion. The leader of the Reform Party said: "Reform therefore favours the decentralization, localization, and personalization of health care delivery", and to amend the Canada Health Act to provide this kind of flexibility.

Is it not interesting that mere minutes ago, when I talked about the problem that my nephew had in a different state trying to access health care, the members opposite said: "Oh no, we do not mean that". Then what does decentralization mean? What does localization mean, except specific services in a specific area? What does that do if I do not come from that area, if they are not insured in my area?

Do we really build a system where certain Canadians have certain kinds of services and other Canadians have different kinds of services when it comes to our health? Is that really what we are promoting?

What does personalization mean? Does it mean user pay? Does it mean the ability of those who can pay will pay? Does that not just promote a greater fracturing of the community?

[Supply, April 27th, 1995]

They cannot have it both ways. They cannot say they are opposed to universality and they are not going to put

anybody outside. That is all universality means: that we are going to cover everybody, we are going to give everybody access to the services.

The leader of the Reform Party made a speech on medicare not too long ago. I would like to talk a bit about it. Perhaps the members can get ready to jump up and down, as they do.

There was a suggestion that we might want to ask the member for Beaver River to try to define where facelifts are free.

The leader of the Reform Party, in his speech not so long ago, said that the real long run threat to medicare is the financial threat caused by deficits, debts, and skyrocketing interest payments. Skyrocketing interest payments on the national debt eat up the federal government's ability to finance any and all social programs, including medicare.