Yves Rocheleau

[Government Organization Act (Federal Agencies), June 21st, 1995]

moved:

Motion No. 1

That Bill C-65, in Clause 2, be amended by replacing line 14, on page 1, with the following:

"recommendation of the Minister, following consultation with the Lieutenant Governor of each province in Atlantic Canada and with the approval of the standing committee of the House of Commons that normally considers matters relating to industry, to hold of-".

[Business Development Bank Of Canada Act, June 21st, 1995]

moved:

Motion No. 12

That Bill C-91 be amended by deleting Clause 20.

Motion No. 13

That Bill C-91 be amended by deleting Clause 21.

Madam Speaker, I am pleased to speak for the last time at this stage, following the impassioned speech by the parliamentary secretary to the Minister of Industry, whom I would like to congratulate on his candour. We no longer hear from Liberals who are proud to be Canadian and proud to tell Quebecers what it means to be Canadian at this time and what Canada will become.

We have seen the passion of the member for Broadview-Greenwood in defending the Trudeau vision of post-referendum Canada. I almost feel like congratulating him, because it helps us understand the scope of the present debate, the role foreseen for the Federal Business Development Bank, the Business Development Bank of Canada, in this post-referendum Canada.

In particular, the Bank will be able to meddle, and this is the aim of clause 20, in regional development throughout Canada, and particularly in Quebec. The legislation provides that the new Bank will be able to do business with so-called "provincial" agencies, despite the fact that, in Quebec, however, there is a law that provides that provincial government agencies must deal with the Government of Quebec, which then does business with the federal government and subsequently authorizes its agencies to act as it sees fit.

Ignoring the presence and the existence of the Government of Quebec, the bill provides that the federal government will now deal with provincial agencies. This raises the whole leadership problem. Who is primarily responsible for regional development in Quebec? In our opinion, it is the Government of Quebec. The federal government could perhaps support it, but it does not have to try to duplicate it, as it is currently doing.

Quebec has established so many agencies. With the SDI, the regional development councils, the solidarity funds, the deposit fund for major matters, and so on, Quebec's regional development organization is well structured.

We refuse to permit waste of public funds and competition between officials, as we have too often seen in the past, or between two groups of officials, which compete with each other, instead of helping each other, and will be encouraged to compete more. We all know that the new Bank of Canada will back the Federal Business Development Bank, which has become merely an empty shell since its mandate changed.

And it is about to start adding its energies to those that the departments of Industry and of International Trade devote to exporters, mostly high tech companies. They are going to supply them, like an agent of federal interventionism, through the Federal Business Development Bank in total disregard for the regional development infrastructure already in place in Quebec.

I feel that this describes the mentality prevailing in this government. They use clause 21 to spread it, which I will read to you:

1. The Bank may carry out duties or functions that may be assigned to it by the Designated Minister in relation to the administration of any program supporting Canadian entrepreneurship, to the extent that it is able to recover the costs of carrying out the duties or functions.

Therefore, having changed the mandate, they are not only mobilizing to try to develop entrepreneurship in Canada by any means they feel are good means, but they also want to develop programs. We asked this question in committee. What programs? What does business administration mean?

That is a very vague catch-all term which the federal government could use to give itself any mandate or to assume any responsibility without consulting with either the provincial government in Quebec, for the time that we will remain a provincial government, or the other provincial governments.

This demonstrates the mentality behind this bill and how urgent it truly is for Quebecers to realize how serious the situation is and to realize that, in the Langevin Block, people are drawing up the Canada of tomorrow which will be centralized and unified like Pierre Elliott Trudeau always wanted it to be.

Except that the process does not allow for debate or consultation and all of the other provinces are being tricked, along with Quebec, in an anti-Quebec referendum strategy. They are pulling a fast one

on the other provinces. I personally find it dishonest to make lofty speeches on the Canada of the future instead of really debating this bill. Alas, this is a small-time short-sighted Canada, run as if it were a chip truck.

That is what we are in for. I can feel it, the measures are already in place. And if Quebec makes the catastrophic decision to vote no, this is what Canada and Quebec will have to endure. They will have to live in this Canada or Quebec, which, as it is, is not recognized as a province that is different from the others; they will have to yield to the bulldozer that they are setting in motion in order to build the Canada of the future, and I hope that this kind of measure will make Quebecers think twice.

[Business Development Bank Of Canada Act, June 21st, 1995]

We are slowly but surely getting to the heart of the matter, Madam Speaker. This important bill will significantly change the operations of a Canadian institution which has proven successful, both from a financial point of view, as well as in terms of fulfilling the federal government's role.

However, I draw your attention to the fact that the government is not only working in secret, but is also using misleading terms. The title of the bill itself is confusing and does not adequately inform the reader as to its scope.

Indeed, Bill C-91, An Act to continue the Federal Business Development Bank under the name Business Development Bank of Canada, alludes to the new name, but not to the new purpose of the bank.

This legislation changes the role of the former Federal Business Development Bank, which will soon become the Business Development Bank of Canada. The mandate is changed because, in the past, the Federal Business Development Bank was formally recognized as a bank of last resort.

Last year, when the committee looked at the role of the FBDB, it is the Bloc Quebecois which, along with the other members of the committee, in an attempt to convey the notion of last resort, proposed the term "complementary". That term was accepted by the committee. The word "complementary" therefore defined the role of last resort bank under the act.

Today-I do not know how to qualify it, and some words may be a little too strong-but there is definitely something wrong. The word `complementary" completely changes the bank's mandate and completely obliterates the concept of last resort.

The Federal Business Development Bank is switching leagues and is more or less going into direct competition with the current network of chartered banks and the network of Caisses populaires Desjardins.

Last resort implied that the whole outlook of the Federal Business Development Bank was geared to concern about regional development, expressed through ad hoc financial aid for small and medium size businesses. It assisted small and medium size businesses which had higher than usual risk factors because of their capital outlay or the economic sector in which they operated.

Therefore, the bank's mandate, under the legislation, was to look at cases which had already been rejected by at least two conventional financial institutions. That was the last resort mandate. Consequently, the whole outlook was geared to regional development.

Today, the bank will soon be competing with conventional institutions and this may perhaps fulfil needs in the rest of Canada. Although the operation seems quintessentially political, the changing of names is a perfect example-without condemning too harshly the people from the Langevin Block and the minister's office-of the government's desire to fill existing market needs in the rest of Canada.

But, this will also affect institutions in Quebec which have already carved out their niches, which have solid reputations and have been successful in filling the needs of the market. In particular, I am thinking of the Mouvement Desjardins, which is very concerned, by the way, by the federal government's approach, and of the Fonds de solidarité de la FTQ and the Société de développement industriel du Québec, which, together with the Caisse de dépôt and the Banque nationale, worked and contributed to making it possible for businesses in need in the various regions of Quebec to obtain loans.

Therefore, we had cultivated a last resort mentality, and I am personally very upset when I hear people at the Federal Business Development Bank say that it will no longer be a bank for losers. We have to see things more objectively.

Life in the business world is not always rosy. It is difficult at times. There are nuances. It is absolutely necessary to have a lending institution like the Federal Business Development Bank with a mandate to review the situation of businesses which are different from others, out of an almost socio-economic concern to ensure that businesses which otherwise would not be backed by conventional sources will find backing in the public sector.

I often heard the president of the FBDB refer to the case of Lassonde, in Quebec, a company that today is thriving and at the time had access to funds from the federal bank when traditional institutions could not, I suppose, justify approving a loan because the risk may have been too high, but the federal bank, acting in the public interest, did, and the rest is history.

There has been one obvious change. The clause on last resort financing has been eliminated, and the new Business Development Bank of Canada will, as a result, be competing directly with traditional institutions.

There are some subtle changes as well, because the Federal Business Development Bank has a new way to raise funds. So far, the bank has been operating only with public funds. From now on, it will be able to turn to private financing as well. The private sector will be able to lend money to the new Business Development Bank of Canada through what are commonly called hybrid instruments.

The bank's mandate has changed in two ways. Formerly, the bank only had to break even. Today, when it deals with the private sector, it will have to be a good investment in terms of interest yields on investments by the private sector. So it will have to pay attractive rates which, we must assume, will be based on the bank's profits. This is no longer about breaking even. The yield will be based on profits. The bank's focus on regional development will have to change. The bank will have to change its culture, its vision and gradually become a strictly commercial bank. This is a profound change in the bank's mission.

Finally, I am worried. Let me explain. As our NDP colleague said earlier, 52 per cent of the loans approved by the Federal Business Development Bank were for $100,000 or less. Once we no longer have this philosophy that the bank should promote genuine regional development by small business but instead operate on a more commercial basis so that it can offer

attractive yields to private investors, where are these loans going to come from, those 52 per cent?

Who will approve these loans worth $100,000 or less which represent 52 per cent of the FBDB's portfolio at the present time? We have every reason to be concerned about the future impact of these changes.

[Business Development Bank Of Canada Act, June 21st, 1995]

Madam Speaker, I am supposed to discuss Group No. 2 on behalf of the official opposition.

[Business Development Bank Of Canada Act, June 21st, 1995]

moved:

Motion No. 23

That Bill C-91, in Clause 36, be amended a ) by replacing line 28, on page 16, with the following:

"Tax Act;"; and b ) by replacing line 30, on page 16, with the following:

"whom the information relates; or e ) for the purposes of a committee of either House of Parliament.''

[Business Development Bank Of Canada Act, June 21st, 1995]

moved:

Motion No. 19

That Bill C-91, in Clause 28, be amended by adding after line 29, on page 13, the following:

"(1.1) The yield of hybrid capital instruments issued by the Bank shall not be fixed according to the profits of the Bank."

Motion No. 20

That Bill C-91, in Clause 31, be amended

(a) by replacing line 27, on page 14, with the following:

"parent of a director,"; and b ) by replacing line 29, on page 14, with the following:

"parent of a director, or d ) the father, the mother, the sister or the brother of the spouse of a director.''

[Business Development Bank Of Canada Act, June 21st, 1995]

moved:

Motion No. 14

That Bill C-91, in Clause 22, be amended by deleting lines 25 to 27, on page 10.

[Business Development Bank Of Canada Act, June 21st, 1995]

moved:

Motion No. 9

That Bill C-91, in Clause 14, be amended by replacing lines 2 and 3, on page 7, with the following:

"are offered to a person only if such services are not otherwise available to that person on reasonable terms and conditions."

[Business Development Bank Of Canada Act, June 21st, 1995]

moved:

Motion No. 7

That Bill C-91, in Clause 4, be amended by replacing lines 1 to 8, on page 3, with the following:

"4. (1) The objects of the Bank are to promote and assist in the establishment and development of business enterprises in Canada by providing, in the manner and to the extent authorized by this Act, financial assistance, management counselling, management training, information and advice and such other services as are ancillary or incidental to any of the foregoing.

(2) The Bank in carrying out its objects shall give particular consideration to the needs of small business enterprises."

[Business Development Bank Of Canada Act, June 21st, 1995]

Madam Speaker, I am pleased to rise for the second time. Changing the name of the Federal Business Development Bank is a substantial change indeed, especially when there has been no real expressed need. It would appear that the parliamentary secretary's memory of what happened in committee differs from mine.

I would invite you to read again the report on small and medium sized business financing, put out last year by the committee, especially recommendation 19, if my memory serves me well, which came out of left field since the committee had not debate whether the FBDB should change its name. It was our very courteous colleague from Broadview-Greenwood who, as Parliamentary Secretary to the Minister of Industry, strong armed the committee into considering the results of the reflection which had taken place in the minister's office to the effect that the Federal Business Development Bank should change its name to the Small Business Bank of Canada. Strangely enough, there is no comment regarding this recommendation in the report. I believe that everybody understood that the parliamentary secretary had no other choice than to present certain proposals.

However, it was not enthusiastically received, since everybody agreed that the Federal Business Development Bank had a very good reputation and that changing its name to the Small Business Bank of Canada would result in extra costs and a waste of efforts, all the more as it apparently narrowed unduly the federal bank's mandate.

It would appear that cabinet continued to reflect on the issue. We are told that, during the past year, they consulted many Canadians, from coast to coast I suppose, and concluded that the Canadian public wanted the Federal Business Development Bank to change name. Whereas, last year, they had a very narrow view of the issue, now they have a wider view, and want to call the bank the Business Development Bank of Canada. The decision has already been made; that is what the bill proposes.

The name was too restrictive before, but now it is too presumptuous. I think that the development of a country like Canada does not rest on the name of a bank. This would mean that the only possible kind of development is a financial one when, in fact, there is also a social and cultural development in Canada.

This name change will bring about all the disadvantages we had anticipated right from the start, that is unnecessary spending, the costs of changing all business cards, letterheads and signs and a waste of energy. We also learned from the bank's representatives, during the proceedings of the committee, that in these times of economic recession and budget crisis, the bank has decided to move most of its branches, economic austerity notwithstanding.

So we ask where is the coherence in this government if it cuts seven billion dollars in transfers to provinces for social programs and allows spending of that nature which seems entirely unnecessary and untimely. We know just how capable of deep and logical thinking those people across the street, in the Langevin Building, are.

Unless the federal government sees in this Business Development Bank of Canada-and this is how we interpret the objective of the government-some special instrument for intervening in the post-referendum Canada which is coming, where the federal government, without any mandate and without consultation with anyone and especially not with provincial governments, is establishing-and we have said it many times and we hope Quebecers will understand what is involved, what is behind all this manoeuvring, truly the dark side of the moon-a whole system of instruments which will allow it to meddle more and more in the daily lives of Canadians and Quebecers. This is the new flexible federalism which, in fact, will turn provincial governments into regional governments.

What worries us is when we hear the testimony of well-known Liberals like Claude Castonguay and Jean-Claude Rivest, now a senator, and a former special adviser to Premier Bourassa, all articulate federalists. They declared publicly on the CBC that Canada is being fundamentally restructured. Quebecers should reflect on that, on what these people say.

So, when we see how far the federal government is going in terms of the new mandate of the Business Development Bank of Canada, which will be asked, among other things, to promote entrepreneurship and support all programs developing entrepreneurship in Canada, we notice that these terms are unclear and undefined in the bill and will allow the government to intervene as it sees fit in any area that it finds interesting, as it will be able to do in another context, under Bill C-88 concerning internal trade that we will also comment on later today. Again, in clause 9, the federal government is giving itself huge powers, without any mandate, without consulting the stakeholders, even if nobody asked for this. It is again doing it on the sly.

We are also aware that there was a meeting on this issue in Calgary; no one had authorized the federal government to act as it did and the federal government did not inform its partners of its intention to pass Bill C-88 that we are going to study later on today or tomorrow.

Instead we propose that clause 1 to maintain the status quo regarding the name of the Federal Business Development Bank be dropped, for all kinds of reasons. It is a corporation which has an excellent reputation and with which Canadians and Quebecers are familiar. It has proven itself, it has played a useful role as a bank of last resort and we will come back to this concept later on.

If only to set an example and because of the costs and unnecessary efforts involved in changing the name of the Federal Business Development Bank to Business Development Bank of Canada, which furthermore we find presumptuous, we

are going to vote against the government's amendments. We are going to propose instead to cancel clause 1 which aims at changing the name of the bank.