Nelson Riis

[Petitions, November 26th, 1998]

Mr. Speaker, it is a privilege for me to present a huge stack of petitions, probably in the tens of thousands, from people from Kamloops and other parts of British Columbia concerned about the unfair treatment of people who carry out acts of cruelty against animals.

They have a long list of court cases where it has become clear that individuals have been very cruel to animals and have not received virtually any sentence at all, a little tap on the wrist. They feel this is unfair. They point out that the government consider directing judges to take this issue more seriously and to consider increasing the penalties for those who carry out acts of cruelty against animals.

[Motions For Papers, November 25th, 1998]

That is for tomorrow. I am a day ahead.

[Motions For Papers, November 25th, 1998]

Mr. Speaker, I rise on a point of order. I understood that there had been consultations among all parties regarding a clemency motion.

[Petitions, November 25th, 1998]

Mr. Speaker, the last petition is a small one from people from the Shuswap Lake area of British Columbia. It is about the MAI. The MAI is over but they are basically concerned that it never come back in any form.

[Petitions, November 25th, 1998]

Mr. Speaker, again there are thousands of people from Kamloops who are concerned about cruelty to animals. They are really upset that people who are cruel to animals seem to never get what they consider a decent sentence. They figure judges are too soft on people who are mean to animals. They point out a whole number of specific examples of this that are just quite pathetic. They are asking the government to take this issue more seriously.

[Petitions, November 25th, 1998]

Mr. Speaker, I have a number of petitions today. There are thousands of people from Kamloops, British Columbia, who are fed up with the tax system and are just generally angry. They have all sorts of reasons why they feel that way and I suspect those reasons are known. They are simply asking the government to undertake a fair tax reform so that people can pay their fair share as opposed to most Canadians being exploited by an unfair tax system.

[Balanced Budget Act, November 24th, 1998]

I will come to the farm issue in a second, but in terms of natural disasters, some very serious expenditures were required. That is what our country is all about, so I think this is an important qualification to place.

The other qualification is the involvement of Canada in a military conflict, consequent to its international peacekeeping commitments or when some other crisis arises. When it comes to defending peace and security and our democratic traditions, of course, money ought to play no determining factor. In terms of our peacekeeping commitments, I do not expect that there is a single Canadian who would not say that this would be a legitimate expenditure in order to promote and keep global harmony and peace.

My concern lies with clause 6(b), “a major deterioration in economic conditions”, such as the farm crisis in Saskatchewan. My friend from Regina—Lumsden—Lake Centre earlier today, commenting to a very important committee, outlined a whole set of concerns as to why this is in fact an economic crisis, not only for the province of Saskatchewan, but for the prairie region and the country generally.

As a matter of fact, my colleague from Regina—Lumsden—Lake Centre has spoken at least eight times formally and has held 50 or 60 meetings to discuss the issue of the crisis in the farming community.

The collapse of incomes is placing farmers at the same depths or even below the depths of the deep recession and depression of the 1930s. This is indeed a crisis.

I also want to say that I am worried about the wording. We would all agree that this is an economic crisis in the farming community. We can also make the case for the fisheries on both the east and west coasts. Many communities have been completely devastated and will require assistance. I could go on to talk about other sectors as well. In some of the major resource communities of western Canada we have seen a collapse because of the Asian markets. Over-exploitation of some resources has resulted in economic calamity in some communities.

We are also talking about social calamity. For example, with the collapse of the prairie farm industry would come a whole social web of issues that would also be in crisis. I think there would be a major deterioration in economic and social conditions.

We could make the case, as others have, of the crisis in our health care system. I do not think we could find today a single Canadian citizen who would not agree that there is a financial crisis in our health care system. I would be surprised if we could find a single person who would say “No, our health care system is fine”.

In our pre-budget consultations, whether they were in a small community or in a large community, whether they were on the east coast, the west coast, the north coast or wherever, the message was always the same: health care funding ought to be a priority.

Education and training should be a priority. The sewing together of our ripped social safety net should be a priority now that we have a surplus in excess of $10 billion.

When we talk about economic and social issues that confront the country that have to be dealt with, may I suggest that there is no bigger issue than the calamity regarding poverty, especially child poverty, in our country.

I was moved, as I know many others were, when I listened to the the Conference of Catholic Bishops which said “A government that refuses to address the issue of child poverty is participating in a form of child abuse”. I think we all agree with that. It is a form of child abuse when we sit back and allow 1.5 million children day after day to live and grow in a life of poverty in what has to be the richest country in the world. It is the ultimate in neglect.

I was chagrined last Friday when I heard reports that our Minister of Finance said that poverty in our country is a national disgrace. I suspect that if we traced the roots to many of our problems in terms of creating poverty they would go right back to the seat of the Minister of Finance. After all, his programs resulted in the massive slashing to support programs for poor families across the country.

I am getting kind of worked up over this. We put a high priority on debt repayment to foreign bankers. We do not put much priority on the pay equity issue, particularly in terms of the women who are affected. We go on year after year ignoring child poverty.

I was here in 1989 when we passed a motion in this House, moved by Mr. Broadbent of the New Democratic Party and seconded by myself, to eradicate child poverty by the year 2000. We are almost there, but the situation has simply deteriorated year after year after year.

It is a national disgrace. It is an immoral act that we continue to simply ignore this blight in our country. It is a serious issue.

I am all in favour of balanced budgets. I am in favour of having as a goal a balanced budget, particularly over the life of a parliament. But when we have these glaring problems of the crisis in the farming community, when we have obscene levels of poverty, particularly with children in our country, when we have collapsing economies in the east coast and west coast fisheries, when we have a crisis in our health care system, when there is not a person in this country who would not say we need to invest in human resources through education and training, to say that we have to have a balanced budget as a matter of law I think is pushing the envelope.

I say to my friend in the Bloc, for whom I have a great deal of respect, the principle of this bill we support, but until we get our Canadian house in order, until we can say to Canadians that we have done what is necessary, particularly in terms of providing for those who need this help today, I think we can say that we will address the issue of balancing the budget on an annual basis at some time hopefully in the near future.

[Balanced Budget Act, November 24th, 1998]

Mr. Speaker, first I want to congratulate my friend for bringing in Bill C-375. I will say from the very outset that I was pleased when I saw this bill on the order paper. I think it is indicative of the kind of debate we need to have in the House.

I have listened carefully to my colleagues. While I support the bill, I wish it was votable. I think it is an important gesture, but I do have some serious concerns. However, I support the bill in principle. I realize this is sort of an opening round of debate and I suspect that we will have this debate in the months ahead in a variety of venues.

First, in terms of the legislation itself, it talks about a balanced budget in any particular fiscal year, with some exceptions, and these exceptions are identified. I appreciate my friend in the Bloc saying that a national catastrophe having a major impact on revenues or expenses would be an exception. Unfortunately, we have seen that reality in the last while in Canada, in terms of the ice storm calamity, in terms of the floods, both in central Canada and in western Canada and—

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

Madam Speaker, I appreciate the comments by the secretary of state for finance indicating what I assume he agrees is a problem probably in all financial institutions, particularly the banks on which the small business sector depends so much in terms of access to capital.

There are two things that can be done. One is for the banks to show some sensitivity in this area. I know they are promising the creation of a small business bank and so on if the mergers are approved. This is a pretty desperate sop at this eleventh hour but we appreciate at least that they are saying the right things.

If they were serious about supporting that small business sector, which they say they are, they would be putting more resources into creating a more stable environment in terms of working with that sector, in terms of paying people adequately so that they stay in a community, that they develop the necessary expertise and understanding, that they are able to visit some of the more creative business opportunities as opposed to simply sitting in their offices and waiting for people to bring in their business plans.

I also want to acknowledge what I think is a changed mandate for the business bank of Canada. In the past this bank used to do much more in terms of advising people in terms of business opportunity, advising individuals on how to proceed in business as opposed to simply providing the traditional banking function. That is still done to a certain extent in the various branches but I think this is one area where the government can move.

Second is the area of community economic development organizations. There are all sorts of models across the country and spinoffs of what I would describe as a small business incubator centre, a place where individuals can go who are perhaps new to the business world.

Let us face it, during this period of downsizing and during these periods of massive layoffs a lot of people are entering the world of business who never had any intention of doing so. They had been a whatever in a large corporation or they had been a government employee and can no longer find employment in those sectors. They cannot find a job in the traditional economy and so they are, if you like, almost forced into being a business person. They are forced into opening up a home based business or a small business, a self-employed initiative whether it is a consultant or whatever.

Often there is a role where government can assist those people who are newly emerging entrepreneurs, who perhaps lack some of the crucial skills, certainly lack some of the critical background in terms of technology development and so on and can be assisted in a variety of ways.

I want to mention one thing about the EI surplus as mentioned by the previous speaker. If there is one thing the EI surplus could be put toward that I think most people would support it would be retraining people who presently have lost their job, retraining into areas that would enable them to open up an enterprise or enable them to be more marketable in the job market. I would like to see some of these EI funds, after the benefits have been increased, put into more training and skilling of people who need to be upgraded, as we all do, in order to play a rightful role in the knowledge based economy of the 21st century.

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

Mr. Speaker, I appreciate being recognized for this important third reading debate of Bill C-53, an act to increase the availability of financing for the establishment, expansion, modernization and improvement of small businesses.

I wish to spend a moment or two elaborating on the purpose of this legislation. This bill replaces the Small Business Loans Act in order to reform the small business loans program. The purpose of the program is to increase the availability of financing for the establishment, expansion, modernization and improvement of businesses with gross annual revenues of up to $5 million by allocating between the minister and lenders portions of eligible losses incurred by lenders in relation to loans up to $250,000 to such businesses for those purposes.

The key elements in this legislation include the following. It provides for the continuing operation of the program, subject to a comprehensive program review every five years. It limits the minister's aggregate contingent liability to $1.5 billion for each of these five year periods. It authorizes the minister to conduct compliance audits and examinations. It authorizes the establishment and operation of pilot projects to determine whether the program should be extended to include loans to the voluntary sector, and involving capital leases. Finally, it reforms the offence and punishment provisions.

That is the summary of the major thrust of this legislation, but let us acknowledge the environment in which it is introduced.

All of us in this House are well aware of the fact that if we are interested and concerned about the employment situation in the country we have to acknowledge that most of the jobs that have been developed in our country over the last number of years have been developed by the small business community. Certainly the vast number of jobs that will be developed in Canada in the foreseeable future will be developed by the small business community.

In 1996-97, a year for which we have good data, small business created more than 80% of all new jobs. If we look at the last two or three years, a significant number of new businesses and new jobs included people who we would generally refer to as self-employed; people who have been unable to find a job with a firm, a government organization or a non-profit group who have gone out and created a new enterprise.

This legislation acknowledges this reality in terms of the development of employment opportunities in our country coming largely as a result of the initiative of small and medium enterprises in Canada.

It is also acknowledged that most of the businesses that were operating in this country in 1989 were still operating in 1996. The idea of many businesses starting and then ending is a trend that is shifting greatly.

Recent surveys by the Business Development Bank of Canada have indicated that small business operators work between 50 and 70 hours a week on average. Most work evenings in one capacity or another related to their business. They inevitably work either on Saturday or Sunday, or both. Almost half said that they take less than seven days of vacation each year.

We are talking about Canadians who work very hard to make Canada work. These are the people who spend an extraordinary amount of their energy, time and talent making the Canadian economy tick, making the economy of Canada grow, and in the process providing employment opportunities not only for themselves and in many cases for members of their family on a full or part time basis, but for others as well.

One of the most successful programs that I have seen in my time as a member of parliament has revolved around the community futures program. This program is a federal initiative that provides capital for communities which is administered and managed by local individuals in terms of really offering micro credit to people who have good business plans that are brought forward. I am proud to say that in the city of Kamloops and the surrounding area hundreds and hundreds of new enterprises have started at least partly, if not largely, because of this community futures program.

Another important aspect of the program is that people who are presenting collecting employment insurance can make the case to a local board that they have a great business idea. If it is approved by the board they are able to not only start a new business, perhaps even borrowing up to $50,000 or $60,000, but they are able to continue collecting employment insurance for a period of time while the business gets started. I do not overemphasize this. This has resulted in hundreds of new jobs and hundreds of new businesses being developed in this part of Canada. It is a tremendous success. The success is due in part to the program being there and the credit that is offered, but it is also due to the people who have managed the program and who have very seriously reached out to the business community, particularly the newly emerging business community, to provide support.

I set myself aside from some of the previous speakers who said that government has no role in business. That is absolutely not true. The fact that we have the Bank Act which encourages banks to do certain things, and I think that they need to do a lot more, is obviously an indication of how government can involve itself in business. The amount of support that we have for research and development in this country, some of the most lucrative tax credits for firms that are interested in research and development, and programs like community futures are means by which governments can provide an environment for businesses to grow, to expand the economy and to create employment opportunities.

I am pleased to say that we will be supporting this legislation. We think it is a continuation of a relatively good program and it comes at a rather opportune time.

I had a lot of advice on this legislation, in a sense inadvertently. On the weekend I was invited to a Grey Cup gathering. It was a tremendous game. It was one of the best Grey Cup games I have ever seen. People were asking what was happening in the nation's capital. I explained that we were going to be discussing Bill C-53, the small business financing act. Immediately the whole room lit up. I asked people what their relationship was with business.

It was interesting because every single person in the gathering owned, operated or was a major employee of a small business. I recorded a handful of those businesses in anticipation of today's presentation. They included the following: a small insurance company, a ski resort, a snowboard-rollerblade store, a hair salon/barber shop combination, a nine hole golf course, a landscaping-snowplowing operation, a horse training and horse boarding operation, and a fur trapper. This person traps animals for eight months of the year, obviously for their fur.

One was a rather interesting entrepreneur who had started a mining development company. However, he is not mining in Canada, he is mining old Aztec mines in Central America. The Aztecs and the Spanish developed these mines hundreds of years ago. He went into the jungle and found these locations and is now re-mining the old mines. It is an interesting initiative.

One person is running a firm that is into geographic information systems and mapping. Another is running a small gift shop. Two run restaurants. One runs a pub and a grill, and one runs a tattoo parlour and suntanning salon. I could go on. These were all people very interested in small business financing. They all had very interesting stories to tell about the problems and the hurdles and the difficulties that confront young, newly emerging businesses today.

Fundamental was the access to capital. This was crucial. I think everyone indicated that they had experienced a problem in terms of accessing adequate capital, particularly working capital. They were pleased that some of these changes were being made, but they pointed out that this was certainly only a step in the right direction, that there was much more to do.

In an effort to identify what more has to be done, I think we should consider the MacKay report recommendations in terms of the future of financial institutions. I think we can say that most Canadians believe that our financial institutions could be doing more, particularly to support the small and medium size business sector.

The United States has the community reinvestment act which requires banks to provide capital support to businesses in the areas where they have branches and where people make deposits. In other words, if people are going to put their money into a bank in community x , there is an obligation on behalf of the bank to support business enterprises in that area.

We do not have that in Canada. I suspect that we would find in many cases branches where all sorts of people are depositors, but very little small business investment is taking place. I think at least the theory behind the community reinvestment act of the United States that compels banks to invest in those areas where they have branches, particularly in terms of supporting the small business sector, makes a lot of sense.

Let me share with members a number of things the MacKay report recommends. It recommends that the government should undertake a substantial program of information collection and analysis to ensure that there is adequate information relating into the financing needs of small and medium size businesses for effective public policy development.

To that end, the report suggests that Statistics Canada should collect data on the supply of debt and equity financing to small and medium size enterprises, including, in particular, coverage of knowledge based industries, aboriginal enterprises and other sectors or subsectors determined from time to time to be of particular public interest.

The data question program should cover all regulated and unregulated private and public sector financial institutions engaged in significant loan, lease, equity investment or security activity in the small business market.

Details of the information collection program, which should be comprehensive, should be determined by Statistics Canada in consultation with data providers, potential users in the community and representatives of Industry Canada.

The MacKay report says a number of things which I will get to in a moment, but I want to say something about the banks.

We have once again heard today that the profits of one of the major banks in Canada are at historic highs. There are incredible profit margins. I know the banks are complaining that times are tough and they are not doing as well as they could be, but I think that whining falls on deaf ears when people are reminded once again that profit levels are at historic highs.

Setting aside the discussion around the size of the profits, the point is that banks from day one have operated in a privileged business environment, a protected business environment. Can we think of another free market player which has been protected from any foreign competition in its sector?

Imagine if the Canadian forest industry had laws which said that no foreign companies could invest in the forest sector, or no foreign companies could invest in some other sector. That would create a privileged environment for a Canadian investor or a Canadian business.

The banks have done that since day one. They have operated under the Bank Act in a relatively privileged business environment. As a result, the banks have done incredibly well. One of the strong things we can say about the Canadian banking system is that it is recognized as a strong, stable banking system and is very profitable in terms of its shareholders and investors.

Setting that aside, I think most Canadians would say that because of the privileged business environment in which the banks have found themselves since day one there goes with that some social responsibility. It is almost like a banking utility. A protected group of businesses ought to feel some responsibility to do something more than simply make a profit in Canada. There should be some feeling that they have an obligation to assist in the development of the Canadian economy beyond the bottom line consideration.

If we think of the banks as business utilities, I think it is fair to say that they should be doing a lot more. I am pleased to say that the MacKay report seems to agree.

The MacKay task force suggests that Industry Canada should assume responsibility for co-ordinating an annual survey of the attitudes of small and medium enterprises to examine the availability of financing from the perspective of small business. This is something that Industry Canada should do.

The task force also says that Industry Canada should conduct and publish periodic benchmark surveys of small business users, including knowledge based firms, to provide a comprehensive benchmark picture of the financing they require and the source of financing upon which they rely as the various markets evolve.

The task force goes on to say that the government should urge depositing institutions, particularly the banks, to find new and creative ways to address the problem in small business financing created by the frequent turnover of business account managers, including the establishment of career paths and compensation incentives that would provide long term, meaningful careers for community based small and medium enterprise account managers.

What they are basically saying is that since so much of the financing of small business is done by the banks, the banks should be particularly sensitive in terms of their employment and career path development to ensure that when a person comes into a community to develop the small business lending portfolio, that person stays for a while and gets to know the community, the business and the changing marketplace, as opposed to simply popping in for a few months and then moving on to another position.

The report also suggests that Canadian financial institutions should be prepared to make credit available to higher risk borrowers with more innovative financing packages and appropriate pricing.

What they are getting at is a knowledge based economy. This requires a whole new mindset in approaching financing. The old asset based financing, when people were able to have all sorts of guarantees for loans, is not necessarily available for the knowledge based economy like with the young entrepreneur who walks in with a baseball cap on sideways and wearing a creative T-shirt and is the creative force in that business because of the human capital that individual brings to that business.

Imagine when that young entrepreneur walks into the bank. The banker is sitting there is his three piece suit. He sees this young guy sitting across from him in a T-shirt and with a baseball cap on backwards. He wants to get financing to start a knowledge business. This person is going to have a tough time. That is the way of the future. This is one of the major cutting edges in entrepreneurial change that is taking place in Canada. Our lending institutions need to be more supportive of that, as the MacKay report recommended.

It suggests that a medium enterprise group should be established within Industry Canada to undertake continuing research on financing this sector, particularly the knowledge based sector, and this group could oversee the key user surveys and analyse the data collected by Statistics Canada and report annually not only to the industry committee but also to the House of Commons on the state of small business financing. It is fair to say that if we talk to anyone in the small business sector they would agree that financing is a crucial issue in terms of their success. This is where the government could play a role in providing more access to capital.

The MacKay task force makes a very good point that there are a whole set of initiatives the government should take to ensure that adequate financing is available to those entrepreneurs who are moving in the direction of the emerging economies.

This legislation moves into two rather interesting areas. It moves into the area where we are going to do some pilot projects. One is to extend the program guarantees to cover capital leasing. Increasingly in the world of franchising the whole issue of leasing equipment often results with ownership of the proprietor at the end of the lease and has never been possible. Under this legislation it will be. It also includes the voluntary sector. This is critical. This pilot study will have major implications in providing a whole group of people access to capital who right now have difficult a time.

I want to identify the work done by the Digby Network which is an association of 17 organizations involved in community economic development. The community economic development organizations play a crucial role in helping small enterprises, particularly at the grassroots level, at the entry level. These are people who are new to the world of business and who are starting new enterprises. They do not have the basic knowledge of a business plan. They do not know what the funding opportunities are. Under these community economic development structures they can find this information.

This legislation is a step in the right direction. Over the next couple of years it will be interesting to watch how these the two pilot projects develop. There are many sectors yet that have to be addressed in order to provide the support and nurturing the small business sector in Canada deserves.