John Herron

[Agriculture, March 13th, 1998]

Mr. Speaker, my question is for the minister of agriculture.

For 21 months Canadian dairy farmers have been asking the government to subject butteroil-sugar blends to appropriate tariff lines. On Wednesday the parliamentary secretary stated that the CITT might not solve the problem but at the end of the day it would take political will.

Two times trade tribunals have upheld the Canadian dairy industry's right to establish tariff lines. Why will the minister not show leadership on this issue instead of sending this matter to lawyers? Will he commit today to subject these blends to appropriate tariffs while dairy farmers wait for the CITT ruling? If not, why not?

[Small Business Loans Act, March 13th, 1998]

Mr. Speaker, I take this opportunity today to speak to the report stage of Bill C-21 with respect to the continuation of the Small Business Loans Act.

The Small Business Loans Act was established in 1961. The initial premise was to ensure that small and medium enterprises would have access to capital for further development.

By that, the intent of the act was to provide incremental financing in situations where traditional financing would no longer be available.

It has been pointed out by the auditor general that 30% to 40% of the loans approved under the Small Business Loans Act would actually be approved anyway so that at the end of the day, on reviewing this act, we would have a loan guarantee program for banks as opposed to a loan guarantee for small business.

Our party will be supporting Bill C-21, only because without it the Small Business Loans Act will not continue and a very valuable piece of legislation would not be there for the small business sector.

That said, we have some concerns with respect to the act. Over the years the ceiling of the act has gone from only a few billion dollars to $15 billion worth of loans guaranteed.

The reason for that is that the original intent of the legislation, incremental financing, has now gone to a situation where we are guaranteeing loans on a continuous basis of nearly a quarter of a million dollars. That is not the access to capital these individuals want.

The initial intent of the Small Business Loans Act was to ensure that there would be financing for slightly riskier loans where the small business sector would be willing to actually pay a higher rate of interest and be willing to pay a fee to have this access to capital. The intent of the legislation has gone to the wayside.

My colleague from the New Democratic Party pointed out that this is a piece of legislation that is highly regarded by small business. All areas of this country, whether Nova Scotia, my home province of New Brunswick or British Columbia, rely on the Small Business Loans Act.

We support both these amendments. The legislation has to continue.

I know my colleagues with the Reform Party have a lot of small business ventures in their areas as well. Those individuals who do have a lot of small and medium enterprises in their neck of the woods rely on this piece of legislation. It would not be a very prudent step for them to recommend that we do not have this loan guarantee program for small business, given the fact that their small business sector relies on this piece of legislation.

I would recommend them to reconsider their current position and actually support this legislation when it comes time to be improved later on. The small business sector needs a small business loans act. It needs a loan guarantee program for incremental loans. It does not need a loan guarantee program for large scale loans.

This is not just me saying this. The Canadian Federation of Independent Business has 88,000 members. Its members categorically point out that one-third of their membership actually believes that the number one issue affecting small business is still access to capital. Look at it from the point that we have a loan program that was only a few billion dollars only a few years ago. It is now a huge amount of money. We are heading toward $15 billion in loan guarantees. One would almost think that with that increase small business financing would be that much more accessible.

In 1997 the acceptance rate for loans has actually gone down 2% from 1987. The reason for that is the type of loans that are now being guaranteed under this program are not in its original intent.

We will be supporting the amendments to this legislation. We will be supporting Bill C-21 this time only, but we do recommend that the government take very seriously the recommendations of the auditor general. The minister pointed out that during his presentation earlier it would be a valuable tool on review of this bill. We recommend that the government act on the recommendations and the observations by the auditor general. Above all is that we move toward the original intent of the Small Business Loans Act, incremental financing.

[The Economy, March 10th, 1998]

Mr. Speaker, it is with pleasure that I have this opportunity to speak on the 1998 budget.

This budget represents a lost opportunity for Canadians. It is a lost opportunity for us to actually change course in the direction we have had within our economy.

I will be speaking over the next 10 minutes about our plan for growth and what we should have seen in the budget. It is the plan presented by the member for Sherbrooke, the leader of the Progressive Conservative Party of Canada. He is someone who will be the best prime minister we will ever see in this country in a few years from now.

We need a plan for growth in this economy. A plan for growth based on less tax and less debt will ultimately mean more jobs and more money back into the pockets of Canadians.

Budgets are supposed to be a reflection of our values and our priorities. I find it very difficult to understand that this budget has not provided tax relief to the middle and lower income Canadians. By that I mean as a society, within this budget we are saying it is acceptable to tax someone who makes $7,000 per year, $14,000 less than the poverty line. We are saying as Canadians that it is acceptable to tax those individuals.

We need a plan to grow our economy so that more individuals, middle and lower income earners, can actually participate in the economy to the degree they are capable of doing it.

It is not just the Progressive Conservative Party that actually understands that we need a plan for growth in our economy. I would like to make reference to a press release sent out by the Canadian Chamber of Commerce on February 24, shortly after the budget. The Canadian Chamber of Commerce challenged the government to draw up a detailed fiscal framework for the new millennium based on clear criteria for growth, competitiveness and opportunity rather than arbitrary commitments to allocate half the surplus to spending and half to debt reduction and tax relief. We need to deal with it more strategically.

I am speaking on behalf of the citizens of Fundy—Royal. Actually the chairman of the board of the Canadian Chamber of Commerce, Gerry Pond, happens to be a Fundy—Royal resident. What he is saying can actually be incorporated with the initiatives we have put forth in this budget.

Before we actually start talking about a surplus or perceived fiscal dividend, I think it is very healthy for us to actually examine whether we have a surplus in the first place.

Members probably know as they may have heard when we were out campaigning back in the month of May leading up to the election on June 2 that there is a $14 billion accumulated surplus in the employment insurance fund, $14 billion. I know the member from Kings—Hants and the member from Chicoutimi understand that that money belongs in the pockets of Canadian taxpayers. The chief actuary for the EI fund maintains that the EI fund is sustainable at $2 per $100 of insurable earnings as opposed to $2.70 where it certainly lies.

There has been a lot of debate on whether lowering job killing payroll taxes will actually have a jolt in terms of job creation. One does not have to take it as my word. In this very same press release the Canadian Chamber of Commerce stated that if the premium were a $1.95, which is even lower than the $2 I mentioned, instead of the present $2.70 per $100 of insurable earnings, every medium size company across Canada would be able to hire at least one more person. Those are not my words but those of the Canadian Chamber of Commerce.

We need to put more disposable income into Canadian taxpayers' pockets. I would like to quote the member for Sherbrooke who understands this initiative. He stated that the message the Prime Minister and his government seemed to be sending to Canadian taxpayers was that he knew how to spend their money better than they did. The truth is that less taxes and less debt means more growth and more jobs for Canadians and more money in the Canadian taxpayers' pockets.

The government actually maintains that there is tax relief within the budget. The average amount of tax relief for a low or middle income earner in Canada is about $80. That represents a cup of coffee a week. As the hon. member for Kings—Hants pointed out it would represent one a month if you go to Starbucks.

We are actually pledging as one of our primary first initiatives to raise the personal exemption on the income tax form from $6,500 to $10,000. That one initiative alone would take two million off the tax rolls overnight, two million Canadians who should not have been there in the first place.

We are also calling for an initiative that actually kills the 3% surtax, the deficit elimination surtax, as the budget is now perceived to be balanced. We can actually put more money back into Canadians' pockets.

Before I go further I want to point out that we have a balanced budget. We should say bravo, that is good for all Canadians. It ensures that we are headed in a better direction and that we will not continue to mortgage the future of younger generations any further. We have a debt of $600 billion. The younger you are, the higher proportion of the debt you have to repay. It is fiscally immoral to pay for today's programs with tomorrow's moneys.

We need to ensure that we never go into the spiral of deficit spending again. I challenge the government to bring in a balanced budget legislation with teeth. One of our proposals within our plan for growth, which the member from Kings—Hants was instrumental in developing, was to ensure that if we do not balance the budget we would cut the salary of the Prime Minister and the salaries of the cabinet ministers if they failed to reach their actual targets. That is the minimum we owe Canadians.

The balanced budget initiative has been a result of almost 15 years. As pointed out in the Economist magazine's year end review, Canada's balanced budget is largely due to structural changes in the Canadian economy implemented in the late 1980s and early 1990s. It pointed to tax reforms, privatization and making our economy that much more cost effective, or free trade as the member of Kings—Hants pointed out.

Meanwhile the Liberal government has balanced the budget on the backs of Canadian taxpayers by only having the courage in leadership to cut Ottawa bureaucratic spending by a mere 9% while cutting transfer to the provinces for health care and education. These are the priorities of the Liberal government. Yet it actually maintains that its priorities are health care and education. It gutted health care and education by over 35%.

Over the past five years the government has taxed and cut indiscriminately. The advent of a balanced budget does not give the authority to tax and spend indiscriminately. Canadians have made their priorities clear: increased job creation, the protection of health care service and investing in young people's future through education.

Canada needs a plan for growth. In the budget the government had an opportunity to outline some positive measures to make our economy grow, and that starts with real, meaningful, across the board tax relief.

I apologize to the 410,000 unemployed young Canadians that I am leaving youth to the end of my speech. In terms of our economic spending we almost forget about our youth. When it comes to student debt, I understand that back in 1993 in Atlantic Canada there were nine students who actually had a student debt of over $30,000. Today there are 904 students who have a debt of over $30,000.

If we do not actually provide the funding that today's younger generation requires to ensure that they have access to post-secondary education, and we do not have a lower tax regime so that once they graduate from university they actually have a chance to seek a job and have some opportunity, the brain drain we talk about will turn into a brain train.

I challenge the government to actually provide Canada with a plan for growth through less tax. Less debt means more jobs and more opportunity for young Canadians.

[Supply, February 23rd, 1998]

Mr. Speaker, I rise on a point of order. My apologies to the hon. minister for interrupting him, but I would like to make a point that he might share with me.

If my hon. colleagues in the Reform Party are so concerned about the MAI on their supply day, do you not think they would have enough energy to have a quorum?

[Poverty, February 18th, 1998]

Madam Speaker, it is with pleasure that I speak this evening to Motion No. 133 as put forward by the New Democrats.

I must compliment the New Democratic Party for submitting this motion which reads:

That, in the opinion of this House, the government should set targets for the elimination of poverty and unemployment—.

From 1993 to 1997 this House lost some of its social consciousness which was provided to a large degree by the New Democratic Party. I think we have a stronger and healthier Parliament since the return of the NDP which can now speak to these issues. I do not think there is a member in the House who thinks child poverty is funny. Individuals in this country are unemployed.

Statistics can describe the unemployment rate and the child poverty rate in Canada, but the big issue for many families in this country, whether they be from Atlantic Canada, British Columbia, the north or elsewhere, may not necessarily be the political philosophy they follow. It may actually come down to the issue of whether they have milk in their fridge or whether they actually have bread in their cupboard. Those are the greater issues for which we are here. It is a higher calling than actual political rhetoric.

There is an adage in business that is used quite often. It is what gets measured gets done. What the New Democratic Party wants to do with this motion is challenge the government to set benchmarks with respect to unemployment, challenge the government with respect to child poverty.

It was brought up by one of the hon. members of the NDP earlier that the poverty rate in Norway, a country I have been too as well, is such that it essentially has no child poverty and it is directly connected to its unemployment rate which is quite low as well.

I would advocate that children are not poor necessarily, it is their parents who are poor. Children are poor because their parents are poor. They do not have a job. They do not necessarily have the economic means to provide for their families, provide for their children to seek post-secondary education. It is those very issues which are our duty and responsibility as legislators to address.

We believe for too long, for over a decade, Canadians have not had any increase in disposable income. In fact, Canadians now earn 6% less after taxes than they did in 1990. Canadians are poorer than they have been in a decade.

I cannot fathom, and I know my colleagues in the NDP as well cannot fathom, why we tax individuals who only make $9,000 a year. What we believe is our economy needs a plan for growth. We need to ensure that we have more individuals participating in the economy to have a better standard of living than they are experiencing now. We need to create more growth in the economy so that more individuals can participate and have a decent standard of living.

That is why earlier today the leader of the Conservative Party and our finance critic, the hon. member for Kings—Hants, tabled a plan for growth. Within that plan for growth there are initiatives that will help those individuals most in need. One of the things we want to do is raise the personal exemption on an individual's income tax form from $6,500 to $10,000. It would take two million Canadians off the tax rolls overnight. Those are two million Canadians who simply should not have been there in the first place. Because we have not indexed the personal exemption on income tax forms, today we have 500,000 Canadians paying tax who did not in 1990.

Another initiative we want to put forward in order to stimulate the economy and to help those in need is tax relief with respect to payroll taxes. It has been proven time and time again by economists that if there is one kind of tax that has a most negative effect on creating jobs it is that of payroll taxes. The reason we are having this debate about a fiscal surplus or a fiscal dividend is this government takes in nearly $6 billion more in the EI fund than that program actually consumes. That is what is responsible for the surplus.

We have balanced the budget on the backs of Canadians and unfortunately on the poorest Canadians in that regard. We want to make sure the EI fund is sustainable. The chief actuary for the government points out that although the EI payment is $2.70 per $100 of insurable earnings, it is sustainable at $2. I know the hon. member for Compton—Stanstead understands that as well.

Two dollars for every one hundred of insurable earnings would put $6 billion back into the economy. The other thing it would do is stop taxing every new job that we create.

Another thing we put forward earlier today in our plan for growth, and I think my hon. colleagues in the NDP will be receptive to this, was with respect to the child tax credit. For too long it has not been indexed to inflation. What happens is we take money away from the poor families that need the money.

We have to challenge ourselves. The intent of this motion is to measure our success. The NDP should be applauded for bringing forth such a motion.

What this government is not willing to accept at the moment is that we have had unemployment above 9% for well over 80 months. That is the longest single stretch of high unemployment since the depression. What the economy needs is a plan for growth through less debt, less tax and more jobs.

In conclusion, we need to ensure that we challenge the government to raise the personal exemption from $6,500 to $10,000 and take those 2 million people off the tax rolls overnight.

There is another social cost here which has a very negative effect on our economy overall. I said during my campaign in Fundy—Royal that for too long Atlantic Canada's best export has been our best and brightest young people.

Unfortunately it is not only an Atlantic Canadian phenomenon. Some of our best and brightest are now seeking opportunities in the United States. Why? There are those who have been successful enough to get a university degree who are now seeking opportunities in areas where they do not necessarily have a chance for employment. They end up going to the United States. They do not have to pay for the last 30 years of overspending, mom and dad's spending binge. They will be taxed less and they will have more opportunity.

What we need to do is ensure that more individuals have a chance to participate in the economy by growing the economy through less debt, less tax, more jobs and more opportunities. Above all we need to help those most in need, those in the margins of society. That is why we want to take 2 million people off the tax rolls overnight.

[Canadian Wheat Board Act, February 17th, 1998]

I rise on a point of order, Mr. Speaker. I think we can probably receive unanimous consent of the House for the hon. member to actually address the question that was put forth in terms of the number of responses he actually received.

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

Mr. Speaker, with reference to the comment made by the hon. member, I want to help clarify my earlier comment which arises from the fact that 30% to 40% of the loans that are actually approved under the Small Business Loans Act, as pointed out by the auditor general, would have been approved in the first place without the public guarantee under the small business loans act.

The point is that for the most part those sorts of loans are usually loans of the higher magnitude. They are not the average loans required by the small business sector.

I referenced this quote during my remarks earlier in the day. My point is that there should be a loan guarantee for small business, not a loan guarantee for banks.

Essentially the Small Business Loans Act has become a vehicle for actually reducing the risk of private institutions and not actually for fulfilling the original intent of the Small Business Loans Act.

The greatest concern we have today is that the original intent of the program was to provide access to capital to start-up ventures or small firms that would not otherwise have been granted a loan from a lender.

The relative size of a loan, which is becoming very commonplace, is large but the relative size of the loan was intended to be small so that borrowers could have handled a higher rate or fee in exchange for a loan that did not leverage their personal guarantee.

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

Mr. Speaker, I have a couple of comments with respect to the remarks made by the hon. member.

As we stated earlier, the Progressive Conservative Party will be supporting this legislation. However, we believe it is incumbent on the government to react to a number of the initiatives put forth in the auditor general's report, as I outlined earlier.

I am very pleased that the Minister of Industry stated: “I am pleased that the auditor general noted that we have made considerable progress toward increasing productivity and reducing the overall cost of the program. The auditor general's report will be a very useful tool as we review the SBLA”.

However, there is one principal issue which has to be addressed and that is the issue of incrementality. The hon. member mentioned different criteria in terms of where the access to capital would be provided to certain types of small businesses. Then he went on to another aspect of it and said that loans would also be given to companies and ventures where loans would not otherwise be given.

Is it the member's understanding of the legislation that its original intent was to provide incremental loans of a smaller nature, not to compete with the larger amounts of money?

As the auditor general pointed out in his report, 30% to 40% of the loans approved by the SBLA would have been approved anyway.

I think it is incumbent on this government to actually ensure the incrementality type loans, loans for start-up ventures or for expansions that do not tie up the small business person's personal guarantee.

That is supported by the 88,000 members of the Canadian Federation of Independent Business. Is that the intent? Do they want to approve other loans?

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

Mr. Speaker, in quick response to the hon. member with respect to qualifying our support for the bill, we believe that the bill has to be reviewed. Initiatives that were suggested in the auditor general's report should be considered and a new Small Business Loans Act should incorporate some of those initiatives.

We also said that the bill should be tightened up to the original intent of the legislation. That said, with respect to C-21 and the lending period, in order to be able to give out any additional loans, if it were not renewed for another calendar year, the potential is that some small businesses would not have the access to capital that they require.

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

Madam Speaker, as time has gone by we have seen more competition in the banking industry and more banking institutions coming into Canada. Trust companies have also become involved. The Canadian Bankers Association is trying to take a more aggressive look at the small business sector, giving it more access to capital.

However, the financial institutions are still not filling the void, which was the initial intent of the Small Business Loans Act. The initial intent was to provide loans to small businesses which would otherwise not have access to capital without tying up their personal guarantee.

If it is a shift, it is more of a shift in terms of what is happening with lending institutions than with respect to the initial intent of the SBLA.