Werner Schmidt

[Points Of Order, November 25th, 1998]

Mr. Speaker, the Minister of Public Works and Government Services referred to an RCMP report about the shredding of documents by Golden West Document Shredding Inc. Could we ask the minister to table the report so that we could have a look at it, please?

[Golden West Document Shredding, November 25th, 1998]

Mr. Speaker, it is very fortunate that the minister got a report from the RCMP and believed it this time.

The shredding of documents is a very simple issue. We would think the Liberals have had a lot of experience with this, with APEC and the Somalia affair. It is a very simple but important issue.

This company sold the material for profit. In spite of the action he has taken, how can the minister be 100% sure that those files did not end up in the hands of people who could abuse them?

[Golden West Document Shredding, November 25th, 1998]

Mr. Speaker, the minister of public works hired the Golden West Document Shredding company in Burnaby to shred 22,000 boxes of confidential information. This included very personal information on Canadian families, including tax files and secret RCMP police files. Golden West Document Shredding did not shred the documents. In fact, it sold them to a private company for profit.

Can the minister tell this House how many Canadian families had their private files sold to the highest bidder?

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

Mr. Speaker, I am thrilled that the hon. member knows so much about financial institutions.

I will ask him a very simple question about the office of the superintendent of financial institutions. Is he convinced there is a sufficient number of personnel in the office of the superintendent of financial institution? Is the superintendent exercising the kind of monitoring and control he ought to in cases of coercive tied selling? Can they be reversed? Is there the clout in the office of the superintendent of financial institutions?

[Canada Small Business Financing Act, November 17th, 1998]

Mr. Speaker, this amendment is very positive. I would like to refer, in particular, to the hon. member's comments just now about “related”.

We need to be very careful about “related” and how we define it. It is all very well to argue that we are going to have this very carefully defined through regulation and things of that sort. I agree that has to be done. However, there are times when “related” needs to be defined very clearly in the legislation itself. Perhaps even this definition may fall slightly short of what is needed.

I want to refer to a practice which has happened. I do not know how often it has happened, but I know of at least several instances. A company, which was not such a small business, needed capital of about a million dollars. It discovered that, yes, there was a small business loan that it could get. However, the maximum it could get was $250,000 and it needed $1 million.

With their ingenuity—and a lot of these small business people are characterized by their ingenuity—they said “How can we do this?” They divided the company into four subsidiaries. Each of those subsidiaries qualified for a small business loan. Subsequently, each of those four businesses borrowed to the maximum of $250,000. Lo and behold, the full $1 million was available to the company.

There was common ownership among the four subsidiaries. Obviously, what was happening was that they met all of the technical requirements of the regulations and the provisions of the act; however, they definitely did not meet the spirit or the intent of the legislation. I believe that is really what is behind this motion.

I believe that the hon. parliamentary secretary who spoke a moment ago recognizes full well that that is precisely what is involved here and I hope this amendment makes that very clear.

The other point we need to recognize, which I want to reinforce, is the point that was made earlier by my colleague for Calgary—Nose Hill, which had to do with payroll taxes and the impact those taxes have on the effectiveness and profitability of small businesses and their ability to hire people.

She referred to the Canada pension plan. The point that needs to be added is that over the next four years Canada pension plan premiums will increase by about 71%. There will be no corresponding increase in the benefits received by the individual who subscribes to the pension plan. The difficulty for the businessman who has an employee is that it will cost him an additional $700 a year to have that person on the payroll, and yet the individual does not receive additional benefits. We need to recognize that this is what is happening.

The other point has to do with EI premiums and the hon. member covered that point very well. But we need to recognize that when the two are added together it means that each new employee costs the small businessman roughly $1,200 a year. That is a very significant amount of money. That reduces the bottom line by that amount of money.

I want to draw the House's attention to something I find rather unique. I discovered it in the November 14 weekend edition of the Globe and Mail . What struck me was the logo. The BDC has a new logo. It says “We are a different kind of bank. We are the small business bank”. The ad reads:

Buy Japan without risking principal. The Business Development Bank of Canada, Japanese Stock Index Linked Notes, Series 2, due November 24, 2006. Interest based on 100% of any increase in the Nikkei 225, Japan's major stock market index. If held until maturity, principal is fully protected and paid. Direct obligation of Business Development Bank of Canada, an agent of Her Majesty and right of Canada. No direct foreign currency exposure. RRSP eligible as Canadian contact.

For further information, please call CIBC Wood Gundy Securities Inc. 1-800-563-3193.

In very small print it says:

CIBC Wood Gundy Securities Inc. is a member of the Canadian Investor Protection Fund and a subsidiary of Canadian Imperial Bank of Commerce. The Nikkei 225 Index is intellectual property of Nihon Keizai Shimbun, Inc. (“NKS”) and is compiled and calculated solely by NKS. “Nikkei 225” is a service mark of NKS, which licenses the use of the index and the mark to the issuer of the Notes but does not sponsor or endorse the Notes.

I have a couple of observations. First, in this ad the Business Development Bank of Canada is offering to sell or make available to investors and individuals notes that have guaranteed principal if held to maturity. If we invested $1,000 and we left it until November 24, 2006, we would be guaranteed the full principal on the maturity date.

Preliminary investigations suggest that the notes themselves are backed by a basket of stocks on the Nikkei Stock Exchange, the Japanese stock market. This suggests that the interest is based 100% on any increase in the Nikkei 225. So if there was no increase, then only the principal would come back. If there was a substantial increase, then the value of those notes presumably would increase by the value of that basket of stocks.

This is interesting. It looks to me that these are Japanese stocks that are being talked about, yet it says clearly that there is no direct foreign currency exposure nor is there foreign content. It is RRSP eligible as Canadian content. This is an interesting ad. It requires a lot more study before we get into the detail of what is going on.

I would also refer to the CIBC Wood Gundy Securities Inc., which is a subsidiary of the Canadian Imperial Bank of Commerce. We know that last week the CIBC advised the world and all of its shareholders that in the previous quarter its profit had dropped by 70%, largely as a result of its unsuccessful operation within the investment market.

I am not suggesting that there will necessarily be bad performance. However, the BDC is acting as an agent of the crown, an agent of the Government of Canada, which means that if the stock market goes down, as it did recently, in November 2006, the Canadian people will be responsible for the full principal that has been invested.

If this is a different kind of bank, a bank for small business, I would like to know what in the world is going on. It is incumbent upon the Minister of Industry and the Minister of Finance and even the Prime Minister to look at this and ask “What are we doing with this kind of a corporation in Canada?”

[Canada Small Business Financing Act, November 17th, 1998]

Mr. Speaker, it is a privilege to follow an as erudite and eloquent speaker as the member for Calgary Centre. Was that not a thrill to listen to him advocate on behalf of our young people, small businesses and to encourage the entrepreneurship of those who are aspiring to become big businesses? That is tremendous. I congratulate my hon. colleague who presented a very balanced view of what is happening in Canada.

I will talk about the entrepreneurship that is so characteristic of small business people. The people who start small business are entrepreneurs in the absolute and best sense of the word because the entrepreneur is someone who takes his own initiative, motivation, ideas, learning, skills and abilities and applies them in a way that will make him some money, that will allow him to express himself, to get that self-actualization to the fore so that he can become that respected member of the community.

Entrepreneurs are the very people who are the most charitable in giving their time, money and skills to the community. Recently we had a fundraising dinner for the cancer clinic in Kelowna. The fundraiser was populated by primarily small business people.

What did they do? Ninety of these small business people raised $90,000 in one evening for the Kelowna clinic cancer centre. Is that not something to be proud of? I think that is wonderful and we should congratulate them. Those are the very same people who stand behind the United Way and have helped build the social conscience among the members of the community. Those are the kinds of people who have that have the spirit and drive that says I want to help myself and I want to show the aggressiveness and the way in which I can build a better community. That is what those entrepreneurs and small business people do.

That is not all they do. They are the source of most new jobs, with 85% created by small business people. Is that not something we should reward?

If that is the case perhaps this is a really good amendment because it is supposed to help small businesses. The interesting thing is that it says the purpose of the act is to increase the availability of financing of small business which would not otherwise have access to financing.

If that is the purpose then I want to ask what has the experience been. There was a Small Business Loans Act which had a purpose very similar to this one but how did it actually work its way out? In many instances the financial institutions recognized that if they would grant a loan under the provisions of the Small Business Loans Act they would be able to collect a better interest rate and besides that they were absolutely assured that the loan would be repaid regardless of what happened to the business.

If that does not sound, smell, taste or look like a subsidy to the financial institutions I would like to know what it is. I think we had better really look at this carefully and say what are we really doing here. Are we subsidizing those big banks that had profits last year of $1.5 billion for one bank? They do not need the subsidy. But the small businessman needs a break. He does not want a subsidy. I have not heard a single small businessman say to me they want me to get them a subsidy.

What they say is “Give me a fair break so that I can compete fairly, that I can compete honestly and so that I can apply my skills in the best way possible. Reduce my taxes. Reduce the intrusion of government in my work and do not give me subsidies. If you give me a subsidy you are probably going to give my neighbour a subsidy. But worse than that, you are probably not going to give a subsidy to me and give it to somebody else and that person is going to compete with me”.

I will give a specific case of a business that was doing very well. It wanted to expand and did. It borrowed $250,000 to expand the business, put a new product line in place and to make it more efficient. What did the business discover? It discovered that in another community that had the same market area as it did, the government came in with a subsidy for exactly the same business. Here we have an honest entrepreneur trying to compete with this big mammoth, giant government which gave this person an interest free loan. Is it any wonder that both those business had problems? That is the kind of thing we want to avoid.

Small business is also the centre of most new ideas and innovation. If we look back on the communication industry and how it has flourished, where did it start? We can look all the way back to Alexander Graham Bell. Where did he start? In big business? He started as a tiny little business. We can go back to the computer industry, back to the chips, back to virtually any of these things that are happening today. Where did they start? They started as small businesses. They did not start with the Small Business Loans Act. They started not with a special subsidy. They started because they had a good idea, they had a few dollars and they put their enterprise to work. That is how it works.

Does this mean I am opposed to small business? It is the exact opposite of that. It gives small businesses the courage, the enthusiasm, the support, the level playing field so that they can compete fairly and squarely with other businesses so that the best person can win. Let us face it, that is what we want.

It is government's responsibility to create a playing field that is level, an environment that encourages distribution and advancement, that builds on the talents and skills of the people. That builds a nation. The strength of a nation does not rest primarily on its natural resources. It rests on the motivation, on the skills, the abilities and the knowledge of the people. Because that is where it rests, it finds its greatest application in small business. That is where we need to look.

This government should be ashamed that it gets in the way of small business with its bureaucracy, gets in the way of small business by not giving it the opportunity it should.

Let us encourage this government. It has done wonderful things but there are some things it is doing that are wrong. That is what has to be taken care of.

The GST should go. The government said once it was going to go. There are all kinds of members over there who said it should go. Did it go? No. It harmonized the GST, which costs even more money. That is a disgrace.

What is it that we now need to look at with regard to small business? New jobs. If there is one thing that would encourage our young people, the graduates, more than anything else it is to recognize that their skills, their abilities, their training will result if a job.

Last summer I met with two university students, bright young people. They came up with a truck and a trailer. On the truck they had wheelbarrows, rakes and other tools. On the trailer they had some lawnmowers and other gardening equipment. I asked them what they were doing. They said they got a little loan and bought this equipment and were in business. Guess what happened. At the end of the summer they had paid off the loan, paid for the equipment and saved enough money to pay for their next year's tuition. They were so proud of being able to build the business. They were so happy and they are now putting that equipment to work during the winter, getting ready for the winter clearing of snow and things of that sort.

This started because these young people had some skills and ability and could not find another kind of a job and so decided they could help themselves. That is what this government should be doing. It should encourage our young people.

It is a great world. Canada is a great country and that is what we need to build on.

[Nunavut Act, October 28th, 1998]

Mr. Speaker, I thank my hon. colleague for the erudite and learned manner in which he exposed what happened in Nunavut, in the establishment of Nunavut, and with the legislation that came from the south. He exposed some of the errors and shortsighted thinking that went into the initial legislation and recognized the contribution of these people.

I pay tribute to my colleague from Yukon who compassionately indicated how necessary it was to provide justice for the people of that part of Canada. My hon. colleague said that we all want justice, and I think we all want it.

Would my colleague subscribe to the notion that if there is to be justice it should be equal justice for all people in Canada? One element of an equal justice system is a system that is more or less parallel. We have a situation where apparently justice is the issue. Equality of citizens before and under the law is another issue and the object of a thorough and fair justice system.

How will there be equality of justice in establishing a totally different kind of conceptually directed justice system in one part of Canada, in this case in Nunavut, as compared to the other provinces? Why should there be a separate system in this part of Canada?

[Nunavut Act, October 28th, 1998]

Why should they do that? That is the question.

[Nunavut Act, October 28th, 1998]

But that is not what we are talking about. We are taking about a single level of courts here.

[Nunavut Act, October 28th, 1998]

Mr. Speaker, I found that statement extremely interesting. It had a lot of compassion. I certainly support it. The need for justice to be delivered in Canada or anywhere else is very important. I appreciate very much the hon. member's plea to have justice given to these people. I could not agree more. There should be just sentencing that should take into account all of the things that matter. It should be as close to the people as possible. It should be swift. Those are all extremely useful kinds of situations.

I also share the member's reservations about the appointment of judges.

However, why would we support a different kind of justice structure? I support the principles the hon. member supports, but why would we have a different system? Why would she support a different system for one part of Canada, a system that does not exist in other parts of Canada? Is there a particular reason that justice in the Nunavut territory should be administered differently than it is administered in other parts of Canada? I fail to see it. It seems that by definition justice has some kind of standard component. Justice, after all, is justice. We want to be treated fairly and equally before the law. Why should we have a different system in one part of Canada than we have in another?