Gurmant Grewal

[Iraq, February 23rd, 1998]

Mr. Speaker, media reports indicate that yesterday the secretary-general of the United Nations brokered a deal with Saddam Hussein.

Will the Minister of Foreign Affairs tell Canadians whether or not the Canadian government finds the deal acceptable?

[The Senate, February 20th, 1998]

Mr. Speaker, the Prime Minister is denying his commitment to an elected Senate. He is not making it happen.

In 1990 the Prime Minister said: “The Liberal government in two years will make the Senate elected. As Prime Minister I will make that happen”. But it did not happen.

Twenty-three times he has used Senate seats as political patronage prizes to pay off Liberal political hacks. He allows senators to live in Mexico. Will he refuse to recognize an elected senator?

British Columbia is the most under-represented province in the Senate. It needs to be addressed. The Prime Minister is not making it happen.

In 1991 the Prime Minister said: “To those who live in the west and the Atlantic, a reformed Senate is essential”. So we know that he knows Senate reform has to happen. The Prime Minister promised Canadians it would happen. When will it happen?

[The Senate, February 19th, 1998]

Mr. Speaker, this year there will be at least eight seats vacant in the Senate. Canadians want an equal, effective and elected Senate.

The Liberal government has kept up the Tory tradition of using vacant Senate seats as a patronage appoint reward system to pay off Liberal political hacks. The Prime Minister has set a new pork barrel record by appointing 23 Liberal senators.

British Columbia is the most under represented province in the Senate, at least by five seats. B.C. has over 600,000 citizens per senator as compared to around 78,000 in New Brunswick, which has four more senators than B.C. The lack of equality in the Senate is outrageous.

The Calgary declaration calls for treating all citizens and provinces equally. The Liberals are denying the need for equality in the Senate. The Liberals are not allowing Canadians the right to choose their Senate representatives even though in 1990 the Prime Minister said the Liberal government—

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

Mr. Speaker, we are very reasonable people. We looked at the issues. We will support the bill under one condition, that whatever we invested in the past does not go to waste and if there is an amendment to the act $1 billion will not be added to the liability.

We will let the system operate for one more year, if we are promised that there will be a comprehensive review and that the observations and recommendations of the auditor general will be seriously considered so that we help small businessmen. We will support the bill if another $1 billion is not added to the liability.

We are very co-operative. We are effective. We want to make the system very productive. The other side of the House should also consider the interest of small businesses.

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

Mr. Speaker, we know there are so many ineffective government programs that are not productive. This is one of them. How can we waste another $1 billion of hard earned taxpayer money on this program? Are the members opposite saying that we should waste another $1 billion? I cannot do that. I cannot betray the trust of the Canadians who have sent me here.

This program does not only waste money, but government interference in the marketplace discourages the development of alternative and innovative financing solutions for small business. This program has proven to be detrimental to small business.

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

Mr. Speaker, the hon. member seems to want me and my colleagues to support a program that is not working. That is appalling. We need to improve the system instead of asking for support for a program that is not working. It has proven ineffective for more than 36 years.

Let the government review the program carefully. Let us make the system effective and efficient for small business. We want to encourage small business and create jobs in Canada in an effective and efficient manner.

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

Mr. Speaker, I appreciate the concern from my colleague and other members who look at issues not through political stripes.

I strongly believe that when the government sits on the operation switch, the system operates with inefficiencies and ineffectiveness. We need to make the system efficient and effective so that it can work. It is up to the government to operate this switch.

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

Mr. Speaker, this is not political rhetoric that I put in front of the House. These are solid facts and figures. According to the auditor general's report, this is the crux of the matter which was discussed and recommended by the auditor general.

In 1994 the industry committee of the House asked for cost benefit analysis and a complete review of the system because the system was not achieving its objectives. It was not doing what it was supposed to do. Going through the details of this act, as well as going through the auditor general's report, I am convinced that this act does more harm than good under present circumstances.

This act was introduced in 1961 to help small businesses, not big financial institutions or banks. This act was introduced so that small businesses, which are creating the jobs and are the backbone of this country, could be promoted. Unfortunately this act has failed small businesses because it was not properly designed. There are many things that need to be improved in this act.

Based on the facts, there is room for improvement and modifications to the act. The act should be changed so that it meets the requirements of small businesses and not create hindrances and obstacles to small businesses.

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

Mr. Speaker, this morning I am very proud, honoured and privileged to rise in the House to represent my constituents and the people of our great country, just as my hon. colleagues who rise in this House from time to time are honoured and privileged to participate in the debates and to represent Canadians.

However, sometimes it is important to note that the members who debate in the House are looking through the lens of their political stripes rather through the lens of issues. In this Chamber it is our moral responsibility to debate the issues conscientiously. I look forward to hearing all members debate the facts in this House, looking through the lens of issues.

Bill C-21 affects the lending practices for small business. With the little experience I have, and after having done some research on this issue, it is very hard for me to support this bill.

I am pro small business as are my other Reform colleagues who have previously addressed this issue. However in its present form the Small Business Loans Act does not meet its objectives. It is an inefficient and ineffective program. After thoroughly examining the program and reading the auditor general's report, I would like to make the following observations.

The small business loans program was established in 1961 to increase the availability of loans on reasonable terms and conditions for the establishment, expansion, modernization and improvement of small businesses in this country. In the last four years 177,000 new loans have been granted totalling approximately $11.2 billion.

The objective is to increase the availability of loans. It is a very broad objective. The act should supplement the services provided by the private sector incrementally and not merely replace them. The loans under this program should be made in addition to the loans made by other financial institutions.

In a study it was found that half of the borrowers involved in the SBLA, 46% to be precise, would have received the loans anyway. They had met the criteria and were qualified to get the loans. Therefore in real terms the system has been working at 50% capacity.

Through this program the government is not successfully helping entrepreneurs or small businesses. The government guarantees the financial institutions for the bad decisions which they might make, up to 85% of the amount, in the event the borrower defaults.

Under this program loans are made up to a maximum of $250,000 for fixed assets like land, buildings and equipment. The program does not provide loans for capital leasing or working capital.

Many times it does not meet the requirements of the small business person and this condition has not changed since 1961 but we know the business environment has been changing ever since.

Although there is more growth in the economy and employment in the service and knowledge-based industry, the purpose of business is not fully served to cater to the needs of small business in this country.

There have been instances where related parties have obtained many loans totalling much more than the maximum limit of each loan by creating artificially more than one corporation for the purpose of loans. Therefore those businesses have abused the system by millions of dollars.

Financial institutions have been charging interest up to prime plus 3%. There cannot be any other charges according to the act but the application fees or opening fees, or opening file fees, et cetera are being charged by some financial institutions and that goes undetected.

There have been many instances when some financial institutions have been charging an extra amount illegally. The department has not been checking it. There is no system in place to check it, unless the case files have been opened.

There are many other observations. Income tax implications are very complicated under this act. They have not been addressed. They are not simplified to help the small businessman.

The job creation record is not good either. There is potential for an active displacement effect. The job creation figures under SBLA have been inflated by as much as five times.

The quality and quantity of information provided to parliamentarians on the result of this program is very inadequate. Surprisingly, the department is not reviewing risk analysis and there is no provision for the losses that may be incurred.

Industry Canada has emphasized that the program should recover full costs but it looks quite unlikely that this objective can ever be achieved.

The small business loan program management and delivery mechanisms are very weak. Industry Canada has no yardstick. There are no indicators in place. There are no procedures in place to measure the performance results of this program.

We know the performance evaluation framework is very important for the success of a program like this one. The department operates the accounting system on a cash basis and not on an accrual basis. It creates further implications in the program.

The department lacks adequate forecasting techniques. Basically the department needs better tools to operate effectively and efficiently which will cost billions of dollars.

Having said all that, the purpose of Bill C-21 is to extend the SBLA to March 31, 1999 and raise the government's total liability to $15 billion, an increase of $1 billion.

In 1994 the industry committee of the House of Commons called for a review to be done on SBLA. Up to now, a complete cost based analysis has never been done.

This program is not only inefficient and ineffective but it also discourages the development of alternative and innovative financial solutions for small businesses.

If Industry Canada of this government has been asleep at the switch with respect to the operations of SBLA, how can I and my colleagues from the Reform Party betray the trust of Canadians and support this bill?

In fact, any member from any political party who is looking through the lens of issues and facts and not through the lens of political stripes will never support this bill until a full review is done.

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

Mr. Speaker, Bill C-21 deals with loans being given to small businessmen. During most of the member's speech she was talking about women entrepreneurs, which I appreciate. But did she mean women as a group would be the same as small businessmen or just women as a special group in the community to deal with business?