Mr. Speaker, I join with other members of this House in congratulating you on your election as Speaker. I also extend my congratulations to the government and to all other members who were successfully elected in this 1993 election.
I would also like to publicly thank the voters of North Vancouver for placing their trust in me as their representative in Ottawa.
Prior to and during the election campaign I distributed more than 20,000 pieces of survey cards to North Vancouver residents so that I could find out what their concerns were on a wide range of national issues. The number one concern by at least 10 to 1 was a desire for the government to eliminate the deficit. The people of North Vancouver clearly understand the relationship between government deficits and high taxes and they understand the relationship between high taxes and the lack of job creation by the small business sector.
There are a significant number of home based businesses in North Vancouver in addition to the established base of light industry, shipbuilding and wheat, lumber and coal export facilities. The owners and workers of these North Vancouver businesses will be searching the throne speech looking for signs of fiscal responsibility and future tax relief. The small and home based business sector in particular will be looking for signs that this government will facilitate the availability of capital that is needed in order to establish new businesses and to foster growth and employment.
The hon. member for Broadview-Greenwood mentioned this earlier today and I am pleased to offer some additional suggestions for capital for small business in my speech. The Red book accurately points out on page 48 that a major problem facing small and medium sized businesses is that they cannot find capital or that the capital they find is too expensive. I applaud the recognition by this government that capital availability is a problem for the small business sector and I commend it for its efforts to try to find a solution.
However, one of the solutions proposed in the red book on page 49 would place taxpayers' dollars at risk by eliminating personal guarantees for loans under the Small Businesses Loans Act. Instead of encouraging bona fide business ventures and viable businesses this policy could encourage the funding of poorly researched projects and even scams. We will have difficulty convincing our constituents that we are responsible guardians of the public purse if we approve such a measure.
The second proposal, on page 49 of the Red book, confirmed in the speech from the throne is to use $100 million of our tax dollars to help establish a Canada investment fund to "seek out projects and technologies in which to invest".
This approach has all the trappings of yet another government agency which would concentrate on spending as much of our money as possible in the shortest possible time.
If this project goes ahead I would urge the government to first, advertise openly across Canada for experienced private sector fund managers and not make political appointments and second, make sure the managers are held accountable for the performance of the fund and that they will be expected to deliver a profit back to the public purse.
There are those who would say that it is easy to criticize without offering alternatives and for that reason I offer a number of distinct alternatives for considerations by the government.
First, the single most important action that could be taken by this government is to gain control of its expenditures and eliminate the deficit. This would bring the promise of future tax relief and future tax reductions for both companies and individuals in Canada. The result of tax deductions would be the freeing up of billions of dollars each year for use as investment capital by the business sector. There would be no need for government funds or the elimination of personal guarantees on loans. It is quite likely that $100 million in tax cuts would yield more wealth producing economic activity than $100 million of taxpayers' money targeted for a Canada investment fund.
Second, the government could support changes to the RRSP investment rules which would permit individuals to invest their RRSP contributions into private financing and investment companies which specialize in funding for small and home based businesses. Such companies are already familiar with the market and could act as a vehicle for the encouragement and development of new business. The government would of course be involved in the setting of maximum interest rate levels and could require that a set percentage of the funds be committed to research and development. This would help deliver on other promises in the red book regarding research and development. No taxpayers' money would be required for this alternative.
Third, the government could permit the establishment and licensing of RRSP qualifying mutual funds which would lend part or all of their capital in leases and loans to home based and small businesses. Since banks appear to be reluctant to become involved in the provision of venture capital this area of new business financing should be opened up to investment. The banks would probably quickly follow suit and establish their own mutual funds when they saw the response to competition for RRSP and other investment funds.
Fourth, the government should actively seek and act upon input from the Canadian Chamber of Commerce, Canadian Federation of Independent Business and other coalitions of small business which have already brought together banks and business people to discuss concerns over the supply of capital. These organizations should be encouraged in their initiatives to help small business become aware of sources of financing other than banks.
Finally each member of this House could seek input from the home based and small business community as to the best ways for government to facilitate the availability of venture capital. A simple advertisement in our local newspapers in each riding requesting input could produce a wide range of practical ideas. The government could then base its final decision on feedback from business groups and individual members representing their ridings. There would be no need for expensive commissions to tour the country and yet all interested in Canadians could have an input into the process.
There is ample evidence that voters want a say in the way they are governed. They should be encouraged to become involved. We should take more direction from their input and we should properly represent their position on issues before this House.
I urge the members of this House to support freer votes so that a legislative direction more in keeping with the wishes of the constituents can be possible and I urge them to support more creative ways of improving capital availability to small business. These two measures together would contribute toward finding solutions to the great problems which face us as legislators in Canada today.