Mr. Speaker, even before the red book came into being during the last election, the Liberal team in opposition made a commitment that if we were to be given the trust of the people after that election, the small and medium size business community would be the centrepiece of any policy development that would be part of our agenda.
We believed in opposition and we believe now that the greatest hope Canadians have for putting other Canadians back to work rests with the small business community. It is the small businessmen and women who, in many cases with very few resources, created, through their own ingenuity, creativity and sweat and toil, products and services that grew not only into businesses but became a very important and vital ingredient in the economy of this country.
When we were elected about two years ago we started immediately to deal with the number one difficulty that small businessmen and women had in trying to meet their objectives which was getting access to capital.
It is very important for me to recognize the critic for the Reform Party. One of the very unique experiences that we had in the industry committee was the fact that we worked as a team. We have many differences with the Reform Party. I for one do not feel as committed as they are to their attack on the deficit and debt. I find their approach too radical and too swift. However, one issue which we have consistently agreed on is the fact that small business is the hope of this country when it comes to putting Canadians back to work. It was because of our teamwork that we have been able to move an agenda forward on the access to capital front.
The amendments in Bill C-99 before us today, which is an act to amend the Small Business Loans Act, are from feedback we have received from the men and women in the House who have been working on this issue. They are the result of feedback we have had from industry and the banking community. They are also the result of the feedback and the success we have had with the Small Business Loans Act.
Some members will recall when we were in opposition that the then Conservative government initiated, in its last budget, amendments to the Small Business Loans Act. At that time, we supported those amendments because we believed that they were instruments for trying to break up the hardened attitude that many people in the financial community had toward taking risks with small businessmen and women.
This bill is not meant to be a cure all for the difficulties that businessmen and women are having. It is a bill where we told the financial community that we would develop an act in Parliament where 90 per cent of the risk that it takes on a small business project, up to $250,000, the Government of Canada would guarantee if that business should fail.
Since the Small Business Loans Act started, over many years, it has been used to help just under 500,000 small businesses in this country. Many people have had, through this act, the opportunity to take a shot at their dreams, create jobs and ultimately help create the economic fabric of this country.
When the Government of Canada is guaranteeing such a large amount, the number one question obviously is what is the down side for the taxpayer.
Until two years ago, on a loan float of about $3.5 billion, the loss to the crown was approximately $26 million. A loss of $26 million on a $3.5 billion float is pretty respectable. In the last year and a half, the float has increased considerably. The float right now is closer to about $8 billion. On that float, the estimated losses are approximately $100 million.
Because of that increased loan loss, that $100 million, and because of our commitment to fiscal responsibility, the government
has decided to listen to the Reform Party, to listen to the banks and others. It has decided that the act has to be redesigned in a way where those costs are recovered.
The essence of this bill deals with a new formula so that those loan losses can be covered. Essentially the three components in the bill to recover the loss on that rather large float would be the following: the major elements would be first, a reduction in the minister's liability to pay a loss on any business improvement loan from 90 per cent to 85 per cent. The second point is the establishment of an annual administration fee and a restriction on the passing on of the fee to borrowers except through interest rates, the establishment of a claim processing fee and the granting of authority to make regulations respecting the release of security taken for the repayment of any business improvement loan.
What we have done is this. Previously the guarantee was 90 per cent. It has been reduced to 85 per cent. If this is the way that the Small Business Loans Act can continue to be viable so that it is not going to be a drain for the taxpayer or a strain on the treasury or something that would generate too much nervousness with officials in the Department of Finance, then I naturally support all these amendments. These amendments are all good, solid amendments.
The most important thing that the Small Business Loans Act did was this. Because all of us worked together on the Small Business Loans Act, it led to another journey that we all went on in the last two years. That journey happened in the industry committee where the Bloc Quebecois, the Reform Party, and government members all worked together on this total review of the difficulties that small business men and women were having in accessing capital.
Members would probably recall that almost a year ago, the committee published virtually a unanimous report "Taking Care of Small Business". That report dealt with all of the various experiences men and women were having when dealing with financial institutions.
All of us in this House heard over the last few years story after story after story of the difficulties many of our constituents were having in dealing with the various banks or other financial institutions. It was through that feedback that we became united in dealing with this issue.
Some of the key recommendations in the report are now being implemented. As of the end of this month there will be a common quarterly reporting chart and statistics on the whole thrust of each individual financial institution's lending to small business by sector, by gender, by municipality and the size of the loan. That kind of accountability is going to change the whole bank culture and attitude toward small business.
That has been the biggest accomplishment of our committee. We have made a very strong impact in causing the men and women who are managing the banks to reflect and review the way they have been dealing with business. Not big business. We all know that whenever big business wants a $500,000 or a $3 billion loan the banks trip over themselves trying to lend those larger businesses the money. In the past few years some of those loans the banks were tripping over each other to give to the larger businesses ended up coming back in their faces, or part of them came back in their faces.
We were not really concerned with the larger corporations. We respect the larger corporations and the job creation contribution they make to the community, but we were concerned with the small business community and the fact that the small business community represents virtually all of the new job creation that is happening in this country. I believe and I know many members opposite believe that those quarterly accountability sessions are shifting the attitudes of the banks.
Ultimately, it does not matter what side of the House we sit on, we are here for one reason. We are here to get the economy of this country going again. The economy is only going to start going again when collectively we can work at creating an environment where business can flourish and give men and women the dignity of a job. That is the most important thing we can be working on today.
It is no secret that there are just under three million men and women who do not have work. I cannot imagine getting up in the morning and not having a job to go to. Many of us here have been blessed with the fact that not only do we have a terrific opportunity to serve our country right now, but we have also had the opportunity to work throughout our careers. Very few of us have felt the pain or the assault on our dignity of not having a job. That assault on dignity is the toughest thing a man or a woman can face. Our number one responsibility is to assist in creating an environment where business can take those risks and chances to get the economy going. That is why we on this side of the House, supported by members opposite as well, believe that whenever we can pass an act of Parliament that will improve on creating more jobs, even if they are minor improvements, then we are on it right away.
It is important that a bill like this does not take a long time to go through the House. That is why it is important to work together. If we can work together and get the proper amendments in this bill, then this kind of cohesion gives confidence to the marketplace and the people who execute this bill, the banks.
This bill is not executed by the government. After it is passed by this House this bill will be implemented by the financial institutions in Canada. The bank managers make the decision as to whether or not that taxpayer guarantee should be given to a small business man or woman. The implementation of the act is totally delegated to the financial institutions. Because of this guarantee those bank managers can take a bit more risk. Ultimately that is going to assist in getting the economy going.
The small business sector represents the greatest hope we have for putting Canadians back to work. It is going to accomplish that once the proper environment is put in place. Also, the small business man or woman does not tend to create a lot of bureaucracy and therefore can be more efficient when operating a small business. They tend to have much closer relationships with the men and women who work with them. The family-like environment which happens in a small business in many cases generates the kind of activity that allows creativity to flourish, that allows productivity, which allows business to create better products at better prices.
That is ultimately the reason our exports are going to be our hope as well. In the last few months our exports have been holding the economy together. Many of those exports, for example in the automotive sector, came from small and medium sized corporations. Some of them are organized in larger institutions but many of them are small, individual plants with a maximum of 30 to 50 workers.
We have to stop thinking of small business in the traditional way it has been thought of in this Chamber. For many years in Ottawa most of the attention was given to the larger businesses. The larger businesses had the resources to come to Ottawa and lobby their MPs or they had the resources through accountants and lawyers to do the work on the basic grants and support systems that were in place. Larger businesses had the resources to get their tax credit put into the tax act because they could afford to lobby the various departments including the Department of Finance.
In the last two or three years we have discovered that a lot of these larger businesses with all the great contributions they have made in terms of job creation and research, are not creating the same kind of economic thrust. Now it is the small business community. Many of us have had to reorient ourselves, go back to basics and reacquaint ourselves to try to understand what the small business community really needs.
Even though I frequently talk about access to capital, there are a couple of other things the government is going to have to address as well. We have to take up the challenge to reduce the paper burden and red tape. How many times do we hear that small business men and women are spending more time pushing paper and government forms than on their own businesses? We have become a nation of paper pushers. We have to realize that along with access to capital we must reduce the red tape and paper burden.
The Department of Industry, the Department of National Revenue and the Department of Consumer and Corporate Affairs have been working very hard in the last few months trying to create a one-all form. They are trying to organize various forms for business. They are working on a system that will be on one form, a simplified system for business reporting on various aspects of government responsibility.
That is also another realization we have come to accept and support as a result of our continued campaign on the access to capital front. In other words, that journey on access to capital has led to the realization that reducing the paper burden is something we must also work on very diligently.
The last thing I will touch on in terms of policy is where small business is crying out for our attention, which is the whole area of tax reform. Small business is telling us that the tax system is complex and inefficient. Many of them argue it is not fair.
As a government we are committed. Our red book stated quite clearly that the whole GST regime we fought so vigorously against in opposition is something the government has to address in its mandate. There is absolutely no way any Liberal member of Parliament could ever expect to go back on the campaign trail to get re-elected unless the whole issue of the GST is dealt with.
My goodness, in opposition we fought against the GST to the point that it nearly caused a riot in the other place. We challenged the government because of the complexity, the paper burden and the inefficiency of the GST. We on this side of the House are working very hard on total tax reform. It is a very complex issue to dismantle an entire structure the previous government set up. As the Prime Minister would say, it is not a matter of saying "poof" and it is gone. It has to be done responsibly, in a way that will not create a bigger problem than already exists.
We believe that dealing with the issue of tax reform is central to the requirements of small businesses and their ability to work in an environment that allows them to maximize their potential. Bill C-99, an act to amend the Small Business Loans Act, is another example of where the government is fine tuning by working with small businesses and the financial institutions and dealing with the financial markets, the currency traders, who have control on our interest rates and our dollar.
There is an issue I wish we could one day debate in Parliament. With the various challenges we take on in the House, whether related to industry, social programs or fiscal responsibility, deficit and debt with all the cutbacks, I would say the one challenge that we as a House of Commons have yet to face is the challenge of how we work with these currency traders who are essentially running most of the central banks of the world. These unaccountable, unelected currency traders move literally a trillion dollars a day, pushing paper, playing the derivative games. I have referred to them before as the private casinos in the financial institutions of the world. These men and women who move that currency around in an unaccountable way are affecting our interest rates, which in turn affect the investment activity and the job creation activity.
I do not know how we can call ourselves a sovereign nation when we think of the fact that we have essentially lost control of our currency. We are sitting here as elected people, but every day we bow down to the currency traders, asking what the dollar is going to be, what the interest rates are going to be.
Do the men and women in this room have anything to do with what goes on with those currency traders? No. Those currency traders are controlling the agenda. No matter how fiscally responsible the government is in the House, they could say that it is not good enough. Then suddenly they give us another squeeze and drop our dollar or cause a jerk in interest rates.
I would love to have a debate in the House one day on how the currency traders of the world manage their affairs and what their accountability is-not unlike the challenge we took up two years ago when we said that we wanted to see what was going on with the financial institutions in the country and what they were doing with small business. These financial institutions were not initially receptive to our exchange, our views and our attempts to try to make their attitude and their culture more responsive to business. However, because we worked together I believe we now have a constructive relationship with the banks. I now believe those banks are actually starting to enjoy the growth and the improvement they are experiencing in their small business relationships.
I would like to put to the House that an even bigger challenge would be how we could take on the currency traders of the world so we can once again get control of our economic agenda.
In closing my remarks on the bill once again I thank members opposite, members of the Reform Party and members of the Bloc for working with us on these amendments so we can hopefully get them through the House before the end of the week.
This is probably the last time I will be on my feet before the referendum vote on Monday. I appeal to those small businessmen and women who hopefully are watching or are participating in this debate to think between now and next Monday about anything they can do to help make sure this campaign for Canada is won.
I personally believe that one of the things small entrepreneurs can do, because they have flexibility, is maybe find a bit of time to get into their vans, cars or trucks and take their families to visit our great province of Quebec this weekend.
When I was a small businessman I did a lot of business in Quebec, and I never had any difficulty doing work in that great province. I believe that one of the ways we can make sure Quebec votes for Canada on Monday is to make sure that a majority of those people, especially in the outlying regions of Quebec, feel comfortable with those of us who are outside Quebec.
I know it is a precarious moment right now. Things are very tenuous. However, I think the greatest asset we have in the country is people from one region of the country talking to another, one on one, not through television ads. I respect these rallies, but the best way to bring togetherness is when people sit down and have a constructive, warm and caring relationship.
I do not think it is too late to make a tremendous turn in those numbers we all read in the newspapers right now. I believe the best way to turn those numbers is by making sure this weekend, if one is from Ontario and maybe planning on driving north to a cottage or east down to Buffalo or Niagara Falls, to travel instead to the outlying regions of Quebec. Together, when we talk about all the assets we have as a whole nation, we will end up staying together.
Thank you very much, Mr. Speaker, for giving me the opportunity to speak on the bill. I pray God that next week everything is all there for Canada.
