Odina Desrochers

[Canada Small Business Financing Act, November 24th, 1998]

Mr. Speaker, I am pleased to have the opportunity to speak to Bill C-53 at third reading. This bill means a lot for regional economies. It means a lot for my riding.

During the next few minutes allotted me, I will share with you the information I gathered in my riding, as an elected representative, mostly from people who came to me to ask about small business financing. I will also quote liberally from the Mackay report. At the present time, we are deeply involved in consultations on the future of Canadian financial services.

As public accounts critic, I will also draw the attention of the House to some extensive quotes from an auditor general report tabled in December 1997. That report was about an inquiry on the management of small business loans.

To start with, I will briefly summarize the Bill which is intended to amend the small business loan program. This program is geared to businesses with gross annual revenues of up to five million dollars.

One of the objectives of the bill is, and I quote, to “increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses”, by allocating between the lenders and the department the eligible losses incurred in relation to loans of up to $250,000 granted to such businesses and for those purposes. This bill is needed for the economic wellbeing of all regions in Quebec and throughout this country.

I will now deal with the key points of Bill C-53.

The government will continue to be liable for 85% of the losses on loans not repaid, the rest being the lender's responsibility. Financial conditions and fees remain the same. The bill provides for the continuous operation of the program subject to a comprehensive review every five years. It limits the department's aggregate contingent liability to $1.5 billion for each five-year period. The bill also authorizes the department to conduct compliance audits and examinations. The lender must exercise due diligence, as provided in the regulations, in the approval and administration of loans.

That summarizes Bill C-53.

I would like to explain briefly what is at stake in this bill. As I said at the outset, this bill is most important for small businesses, and small business are crucial in our economy. Bill C-53 concerns also employment and productivity issues.

During all election campaigns, in various economic summits and meetings dealing with regional economy, the importance of small business for the economy is always emphasized.

Let me just quote a few figures. In 1995, when we had our last recession, SMBs with fewer than 100 employees accounted for 99% of the 935,000 businesses operating in Canada, employing 42% of private sector workers and paying 38% of all salaries.

On the same subject, I also want to mention that SMBs are a major part of the regional economy, particularly in my constituency of Lotbinière where, as is the case everywhere else I am sure, the SMBs are the main job creation motors.

In my constituency, SMBs offer a wide range of quality products, particularly in the town of Plessisville now considered as an important leader in the manufacturing of metallurgical products. Plessisville and its SMBs are well known in the province, in Canada and in the world, but there are also other important areas in my constituency where a number of SMB operate. I would like to mention a few of them: Daveluyville, Princeville, Bernierville, Laurier-Station, Sainte-Croix, Saint-Appolinaire, Sainte-Agathe and a number of other municipalities where many SMBs are at the centre of the economic vitality.

This is the interesting part as far as the small businesses financing is concerned. But many small businessmen in my constituency, as in any other constituency, are equally interested in establishing a SMB. However, financing often put an end to their projects. There are many interesting and innovative projects out there, but no money to realize them.

I would like to come back to the importance of small business financing, an issue that was widely discussed this fall with the proposed merger of four important banks and the release of the MacKay Report on the future of financial services. So, the financing of small and medium size businesses has been the object of lots of discussion.

Everywhere across the country—and I had the opportunity to go on a tour that took me out West, to Alberta, as well as Toronto and Montreal—we promoted small and medium size businesses. Associations, even the Canadian Federation of Independent Business, expressed their concerns with regard to access to credit for small businesses in an environment of financial services restructuring.

Very early, our political party has been in the forefront. First, at a special caucus meeting held on September 9, we took the time to listen to the positions of each financial institution, including the four which are involved in a merger project much talked about in the press. The Bank of Montreal and the Royal Bank are quite open in promoting their projects, and the same can be said for the Toronto-Dominion Bank and the CIBC.

As I was saying, at everyone of these meetings, the issue of small business financing was discussed and much time was spent talking about this sensitive issue.

I would like to state what is precisely our party's position on the financing of small businesses. On October 26, we tabled an official paper, presented by my colleague for Saint-Hyacinthe—Bagot, where he summarized our party's position in the current debate on the MacKay report dealing with the future of the financial services sector. Obviously the issue gives rise to strong discussions. It matters a lot to our party.

It says:

Throughout the debate concerning the financial sector's reorganization, the final objectives must always be kept in mind, namely:

1) ensuring increased competition by stronger Quebec and Canada institutions, then with the help of new international players, better serving consumers and businesses.

2) increasing the industry's capacity to compete internationally to ensure its continued contribution to the economic growth as a job creation engine.

This approach, inspired by recommendations of the MacKay report, would allow these objectives to be attained.

As we can see, economic growth, job creation and small business financing are still questions that are discussed at the table and we are trying to find solutions to help those people.

The report goes on:

We support the MacKay report's suggestion that a follow-up mechanism, preferably within the Parliamentary structure, should be established to measure the impact of changes made in the financial sector's regulations on competition, institution service fees, jobs, credit access, transparency and services in rural regions—

When we say that we also want to ensure access to credit, whether for consumers of for small business, the Bloc Quebecois is always there and stand by small businesses because they are an essential tool for job creation.

The subject of the bill before us today was discussed at length in the auditor general' report tabled last December on the administration of the small business loans program. In his report, the auditor general, Mr. Denis Desautels, highlighted the importance of small and medium size businesses. In his introduction, he mentioned the major contribution of the small businesses to the Canadian economy.

According to this report, in 1994, more than 98% of all businesses in Canada were small businesses with fewer than 50 employees. In 1996, one out of two Canadians were employed by a small business.

In his report, the auditor general had this to say:

Small businesses play a very significant role in our economy. In many regions of Canada, they are at the heart of economic activity and community development. In addition, they sometimes develop into large firms of the future. Small businesses contributed 43 percent of Canada's private sector economic output in 1995.

In his introduction, the auditor general continued his analysis of small and medium size businesses and addressed the issue of financing. He said:

Management experience, market access, availability of financing, application of technology, and fiscal and monetary policies are all important factors that contribute to the success of small businesses.

Financing, however, is vital for a small business, particularly in its early years. Typically, the initial capital comes from the owner or from family and friends. Much of the additional equity comes from the earnings of the business. The other significant source of financing is through borrowing, primarily from the chartered banks, caisses populaires, credit unions and trust companies. The lack of financing on reasonable terms and conditions has often been identified as a significant barrier to the growth of small businesses.

He also pointed out that:

Governments in industrialized nations have traditionally played an important role by offering financing and/or guarantees to improve access to capital, with the objective of creating jobs and stimulating economic growth.

He was referring to the small business loans program, which is among the initiatives taken by the federal government to reach its objectives. This program was established in 1961 and has undergone major changes in 1993. At that time, changes in the act were aimed at relaxing the eligibility criteria, increasing access to financing and reducing personal guarantee requirements.

Two years later, in 1995, other changes were made in order to reduce the percentage of financing allowed and the ratio of loss sharing, to charge annual administration fees and to increase the maximum interest rate.

The auditor general, still with regard to the management of the small business loans program, mentioned that the small business sector had been the subject of many recent studies.

These studies on the small business sector showed that some action to assist them had to be taken at any cost. In 1994 a committee produced the report “Growing Small Businesses”. The working committee on small business created by the ministers of finance and industry and including small business representatives overcame the difficulties.

The report highlighted the important challenges facing small and medium size business. One of these was obtaining the proper financial support to expand. Given the many problems at the national as well as international levels, a small business often has to expand rapidly, but, without the necessary financing, it must turn to the banks for venture capital. Banks do have an important role in our economy. One thing they should do is support SMB initiatives.

The working committee recommended a series of initiatives to provide a sound basis for small business growth and development.

I now wish to make a few comments about Bill C-53. They say many improvements were made and the federal government has taken into account some of the auditor general's well-founded recommendations.

Of all those recommendations, the following were incorporated. First, the limits of the program are better defined to avoid abuses of the system. The bill provides for reducing the interest paid by the government.

A reporting system has been introduced to ensure some accountability to Parliament. But, as we can see, the auditor general made many recommendations that were not taken into consideration by the Liberal government. It ignored what the committees who studied this matter had to say. In particular, it ignored the amendments or the suggestions made by our party.

These are encouraging pilot projects, but they do not go far enough. This bill gives numerous powers to the minister, which is typical of our friends across the way. When they have the privilege of reviewing legislation, they quickly lay their hands on everything. The ministers are trying to control everything but unfortunately, now and then, they interfere with provincial jurisdictions.

The minister took advantage of the review of this act to grab increased powers without any real checks and balances. It is not difficult to understand. The minister grabs power, controls, but there is no mechanism to correct these abuses.

The industry critic for the Bloc Quebecois talked about this problem in September 1998 in one of the numerous speeches she made on this issue. The technical clauses in the act have now been deleted. The minister will be able to make whatever regulations he wants.

Part of the regulations needed to be modernised. Everyone agrees on that. However, our hon. colleague from Mercier told us there was a serious problem, in that the bill does not include the whole range of provisions.

On Bill C-53, the Canadian Restaurant and Foodservices Association also explained to the Standing Committee on Industry that some major changes introduced were to be found not in the act, but in the regulations. The most important, without a doubt, was the exclusion of existing leasehold improvements. I was speaking earlier of expansion. So, in the restaurant industry, when there is a need to expand, they start by modernising and expanding the premises.

Finally, I can say that the Bloc Quebecois is in favour of Bill C-53. I also point out that the financing of small and medium size businesses is important and is one of the major sources of development in each of our regions.

I support this bill, although I would have preferred to see certain changes.

[Supply, November 19th, 1998]

Madam Speaker, I am very pleased by the comments of the hon. member for Sherbrooke, since he is in a position to see what this government has been doing for the past few years.

We know what the auditor general thinks of the finance minister's behaviour. We also know how the provinces are reacting to that behaviour. They all condemn that way of doing things.

I want to ask the hon. member for Sherbrooke if he has a word to qualify the minister. How does he see him? Does he see the minister as being competent, incompetent, a bit lost, unrealistic?

I leave it up to him to answer.

[Scrapie, November 19th, 1998]

Mr. Speaker, Quebec's Minister of Agriculture, Fisheries and Food announced that special assistance would be provided to Quebec sheep producers who are experiencing serious financial problems.

Those who were abandoned by the Canadian Food Inspection Agency and who lost 11,000 sheep between January 1, 1997 and October 27, 1998, will be eligible for a three-year interest-free loan of up to $100,000 per business.

Quebec has taken action. It is now up to the federal Minister of Agriculture to do his share after doing a major injustice by creating two classes of producers in Quebec, one of which is the victim of the minister's lack of compassion.

The Bloc Quebecois has confidence in the Bouchard government and it salutes the courageous measure taken by a credible and responsible government which Quebeckers will be proud to re-elect on November 30.

[Supply, November 19th, 1998]

Your dollar.

[Supply, November 19th, 1998]

Mr. Speaker, listening to my colleague across the floor, with his figures and statistics, I recognize a true Liberal, with no compassion toward our sick, our unemployed and our young people.

We did not need to hear this sad story of Liberal accomplishments, because we are familiar with the outcome. Health care in Quebec and throughout the country is in total chaos.

Now there is a surplus. It is clear: $10.4 billion. Does the hon. member agree that the government should put at least $2 billion in health care, as we are asking today? The government does have money. Why does it not want to pay?

[Supply, November 19th, 1998]

Mr. Speaker, if the Canadian government returns the money it has cut over the past few years, whether in Quebec, in Acadia or in any Canadian province, this will give people some breathing room and they will have the money required for health services that really respond to the needs of the entire population.

[Supply, November 19th, 1998]

Mr. Speaker, I got a bit carried away because I am convinced that the present government will be the best one to represent the interests of Quebec.

I am, of course, very much aware of all the problems affecting the regions, particularly the one I represent, Chaudière-Appalaches, and the one right opposite, the Quebec City region.

In recent months and in recent years, and even before I was in politics, I was already aware of the great damage being done by federal cuts to health services in the Quebec City and Chaudière—Appalaches regions.

The consensus of all political parties, including our own, and of the premiers, is that there is indeed a problem on the federal side. We must continue to fight, and we must gang up on the Prime Minister, the Minister of Finance, and the Minister of Health, so that health services will be equitable once and for all and meet the needs of each of the regions of Quebec.

As a result, our health sector employees, our administrators and the recipients of each of our services will finally be entitled to health services that are humane, and above all fair.

[Supply, November 19th, 1998]

Mr. Speaker, in light of all the debates that have taken place in the past few months, and even years, I wonder if anyone can reason with this government and make it understand what the facts are.

On August 7, 1998, a historical consensus was achieved when all the premiers, including Quebec's Lucien Bouchard, asked the federal government to reinvest in health.

For some time now, opposition parties in this House have been doing likewise. They have constantly asked the Minister of Finance, the Prime Minister and the Minister of Health to give money back to the provinces for health. But they have yet to get an answer.

During the prebudget consultations that will end in a few days, I travelled across Canada—I went to Vancouver, Calgary, Toronto and Montreal. Everywhere, the chambers of commerce, unions, administration officials and hospitals were asking for the same thing.

More specifically, what did we do in Quebec? When the Bloc Quebecois realized that this government would only allow us one day to make representations on behalf of Quebeckers, it conducted a vast prebudget consultation in which most of my party colleagues took part.

This is what we found out. Whenever the Minister of Finance opens his mouth, two or three days later he changes his tune, with the result that we never know which figures or numbers are true. It was said at that time that the budget surplus would be between $12 and $15 billion, and that these figures were supported by many respected economists in Quebec and in Canada, including those of the Mouvement Desjardins.

We consulted our people. It was not the kind of fake consultation that we often see in the rest of the country. It was a serious consultation process that led to a summary report on the opinions of the people in 26 ridings and 10 regions in Quebec. More than 2,500 people took the time to come to see us or to call our offices to say how outraged they were by the federal government's attitude.

Among those people were three provincial colleagues of mine, Jean-Guy Paré from Lotbinière, Jacques Baril from Arthabaska and Michel Morin from Nicolet—Yamaska. They took the time to contact us because they also have to deal every day with people coming to them with health problems. They took the time to tell us that they had had enough of the federal government's attitude. That goes to show that the consensus arrived at in Saskatoon is strong, real and credible to Quebeckers.

But I am not at all surprised to see our dear Liberal government act this way. The things it has done over the past year and a half speak for themselves. It is just the result of the unhealthy partisan strategy behind the throne speech made in the House in October 1997.

I will now say a few words about the credibility of the Minister of Finance. What credibility. In February 1998, when he brought down his budget, the minister announced “a zero deficit this year, 1997-98; a zero deficit next year and a zero deficit in the year 2000”. In fact, what the finance minister said really means he foresaw that his marks as an administrator for those three years would be zero. That is what this finance minister's score in administration is. Zero.

Let us now take a look at the credibility of the saviour from Sherbrooke, Jean Charest. He has a strong tendency to take after the finance minister, as evidenced by the way he announced his budget forecast a while ago; I think it was in Rimouski. On the very same afternoon he made his announcement, Liberal fiscal and financial experts were wringing their hands in desperation; it just did not make sense. He had not realized that, while he thought it was for four years, the forecast put out by Lucien Bouchard and his government, by Quebec's minister of state for economy and finance, Bernard Landry, was in fact for five years.

Some credibility. Shall we talk about his credibility? During the debate Tuesday, how did Mr. Charest respond when Premier Lucien Bouchard pointed out to him that he was $1.5 billion short in order to deliver on his promises? He was unable to say where the money would come from. He really could not say.

This means that, should the people of Quebec put their trust in this individual, he will have no problem working with the current Minister of Finance of Canada. It means that we in Quebec will be taking a step backward, that we will be the losers.

Therefore, we must impress upon Quebeckers and upon all stakeholders the importance of keeping Mr. Bouchard at the helm so we have a strong voice and so he can continue to put pressure on the Canadian government to obtain what we have a right to expect from that government.

Now we will move on to the real problems in our health care system, not those Jean Charest has been trying to bring to light since the beginning of the campaign. He goes around talking about billions of dollars, but we have no idea where that money is going to come from. In any case, I already said that he has no credibility. He is like our federal Minister of Finance. That Liberal leader speaks only about concepts. He has all the rhetoric, but no figures.

At this stage, I am pleased to move an amendment, which reads as follows:

That the motion be amended by replacing the word “a” with the following:

“an immediate”

That is the change I want to make to the main motion brought forward by the leader of the Bloc Quebecois.

[Financial Institutions, November 17th, 1998]

Mr. Speaker, according to the word going round in the papers, it would appear that some of Canada's chartered banks are boycotting Quebec bonds.

We learn in fact that neither the Bank of Montreal nor the Royal Bank have any Government of Quebec bonds. And yet, they have $1.4 billion worth of federal bonds and over $420 million in bonds issued by five provincial governments elsewhere in Canada.

It is a scandal that the financial institutions wanting our savings cannot even be bothered to invest them here.

I am sure this information will give a number of people who were perhaps thinking of doing business with these banks cause for reflection.

[Personal Information Protection And Electronic Documents Act, October 30th, 1998]

Mr. Speaker, it is with great pleasure that I rise this morning to speak on Bill C-54 as one who had close ties with the communications industry during 15 years. I was involved in broadcast media at the time.

Throughout this period, I had an opportunity to witness changes as they occurred: the arrival of fax machines, satellite dishes, computers and, finally, the Internet. All these changes have always served the public at large, the general public, well. However, a closer look at electronic commerce and this technology that is increasingly becoming a part of our daily lives raises concerns.

As the millennium approaches, in this era of communications, with communications occupying an ever-increasing place in our lives, the federal government has deemed it appropriate to legislate in this very complex area.

I would like to give a little background on Bill C-54, an act to support and promote electronic commerce. The purpose of this legislation is to support and promote electronic commerce. How? The title goes on to say: by protecting personal information that is collected, used or disclosed in certain circumstances, by providing for the use of electronic means to communicate or record information or transactions and by amending certain acts.

Once again, Quebec is at the cutting edge, since it has had legislation protecting personal information in the private sector for four years now. Bill C-54 introduced by the federal government deals only with commerce. It does not extend to any other activity and has some serious deficiencies.

In its 1997-98 annual report, the Quebec access to information commission is unequivocal on the issue of privacy on the information highway.

The commission examined the consequences of introducing Canada-wide standards and legal principles regarding privacy on the information highway.

Under the terms of a proposal submitted to the ministers responsible for setting up this highway, this protection will be based on the voluntary code of practice developed by the Canadian Standards Association, and adopted in 1990.

It is the commission's contention that, if implemented, this proposal would represent a setback for the privacy issue in Quebec. This contention is based on a comprehensive review of the CSA code. There is good reason to be pleased with the Canadian industry adopting such a code. This marks quite a breakthrough, stemming from an interesting analysis of the OECD guidelines on protection of personal information.

However, the CSA code does not meet the objectives of the personal information protection systems established under the two Quebec laws, namely to guarantee all citizens an impartial and fair solution to any problem or dispute that may arise with regard to the protection of this increasingly important aspect of one's privacy.

Therefore, the Commission suggested to the Quebec Minister of Culture and Communications that she remind her counterparts that Quebec has such a statutory system in place. According to the Commission, the Quebec system is the only response to the challenges of the information highway that respects the rights of citizens.

Discussions of e-commerce become a little complicated. First of all, for the benefit of this House I am going to use general, easy to understand terms. We are talking about making purchases or conducting transactions with banks, with suppliers, with manufacturers, or with clients electronically.

These types of transactions have been in existence for quite some time. Telecommunications have been with us for 30 years or so. They have been relatively well structured in terms of standards for 25 years. As for electronic data interchange, it has been governed by international standards for more than 10 years.

In fact, electronic data interchange is used relatively often by many businesses. For the past 10 years or so, large businesses have been using it in their dealings with suppliers. This means that a supplier does not send a written bill to his client, but rather an electronic bill that is received on the computer of the client, who will then authorize payment after verifying that the goods or services have actually been delivered.

But what is happening in this era of communications is an acceleration of this process. Electronic data interchange is no longer restricted to large corporations or governments. It is now accessible to the average person through the Internet, among other means. The Internet is becoming increasingly popular at home.

I want to discuss into greater detail how this government is once again getting involved in issues that are under Quebec's jurisdiction. The bill introduced by the Minister of Industry to protect personal information was of course anxiously awaited. It is, as the federal privacy commissioner pointed out, the most significant step taken to protect personal information since 1983.

However, instead of introducing a real bill to protect privacy in the private sector, in a technological world that challenges this fundamental right, the government, through its Minister of Industry, is proposing this weak legislation, whose fundamental part is found in a schedule to the bill, and in which the commissioner does not have real powers. The wording lends itself to a broad interpretation.

As we know, when this government wants to get involved in areas of provincial jurisdiction, it always goes for a broad interpretation, so that it can justify its actions to the people.

In this context, there is a risk that Bill C-54 may infringe on the privacy rights of Quebeckers. This bill may not meet the expectations of Canadian and Quebec consumers.

Moreover, the Minister of Industry is introducing a bill which, on the face of it, seems to provide less protection than in the federal public sector. Whereas, at the moment, harmonization of legislation on the subject across the country seems to be an important criterion in ensuring constant protection of personal information, it might be reasonable to expect the government to draw on the experiences of Quebec in protecting personal information. It has had a law for four years. Not so.

The Bloc Quebecois regrets that the government has chosen not to give the privacy commission power to issue orders. This lack of power, which currently prevents him from fulfilling his responsibilities in the public sector, should have been remedied in proper form in the bill before us. This shortcoming will affect the bill's credibility.

The Bloc Quebecois fears that these weaknesses in the bill will make the Prime Minister's objective of promoting consumer confidence in order to develop electronic trade unattainable.

This is no surprise. The Bloc Quebecois is sure the government will not give the privacy commissioner the resources he needs to do the additional work given him in the bill. The copyright board, a body making quasi-judicial decisions, had no increase in its resources following the passage of Bill C-32, which doubled its workload. Today, the Minister of Industry is obliging it to examine the cost recovery formula.

This is another method frequently used by our friends opposite. The government hands out responsibilities, but not the resources or the money to fulfil them.

Furthermore, this means, very clearly, that the Bloc Quebecois does not support Bill C-54 as drafted. The minister should go back to the drawing board and look much more carefully at the importance of personal information.