CONTENTS
Friday, October 27, 1995
Bill C-99. Consideration resumed of motion forsecond reading 15909
Mr. Harper (Calgary West) 15918
Mr. Leroux (Shefford) 15919
Mrs. Brown (Calgary Southeast) 15927
Mrs. Ringuette-Maltais 15927
Bill C-99. Consideration resumed of motion 15928
Division on motion deferred 15938
15909
HOUSE OF COMMONS
Friday, October 27, 1995
The House met at 10 a.m.
_______________
Prayers
_______________
GOVERNMENT ORDERS
[
Translation]
The House resumed consideration from October 26, 1995, of the
motion that Bill C-99, an act to amend the Small Business Loans
Act, be read the second time and referred to a committee.
Mr. Pat O'Brien (London-Middlesex, Lib.): Mr. Speaker, it
is an honour and a privilege for me, as the member for
London-Middlesex, to address the House of Commons this
morning on a very important subject, Bill C-99.
[English]
I am very pleased to speak on Bill C-99 this morning as the
member for London-Middlesex. We like to think that London is
the unofficial capital of southwestern Ontario. Our business
community is quite diverse, with small business being an important
part of it.
With Your Honour's indulgence, I must confess that as you
called for a moment of silence this morning my thoughts then and
even now are with people from all across Canada and many people
from the London area. I know my staff worked very hard to
organize 11 buses from London and area. They are on their way to
la belle province of Quebec to tell the people there how much we
understand that they face a very crucial decision and that our
prayers and our hopes are that they will remain a part of Canada.
It is with some mixed thoughts that I stand this morning to speak
on the subject of Bill C-99 when frankly I would like to be with
friends and fellow Canadians from all parts of Canada who are on
their way to Quebec to make it clear to our fellow Canadians in
Quebec that we sincerely hope they will continue the partnership
and the great country we have built together. I did not feel that I
could launch into debate on Bill C-99 without sharing a few
personal thoughts.
Bill C-99 is very important. It continues the process of
modernization and improvement that has moved the Small
Business Loans Act program to a full cost recovery. We could ask
ourselves what is so important about the bill since we deal with so
much legislation in the House and most of it, if not all of it, is
important and significant. I believe it is particularly important
given that we are discussing it at the end of 1995 and as
parliamentarians we face the enormous challenge of trying to help
the country prepare for the 21st century. As I have already said, we
certainly hope it will be a united country that heads into the 21st
century with all members of the family intact.
We obviously need an economic recovery. We have made some
steps in the right direction toward it over the past couple of years.
Quite candidly, we have had some backward steps in that regard. It
has not been a steady progression forward as we would all like. It
has been a two steps forward one step back process. However we
must continue and we must persist in an economic recovery as we
prepare the nation for the 21st century.
There is no area of greater importance in my mind as a Canadian
and as a member of Parliament than the area of small business. In
times past we would lure a large employer to a community who
would create 1,000 jobs. It seems appropriate to use a baseball
analogy with the World Series going on. We used to look for the
grand slam home run in economic terms in wanting a major
employer. I have several in my riding such as General Motors
Diesel and 3M, to name two.
The days are gone of attracting major employers to our cities,
except for rare circumstances. We will not see situations in which
we instantly gain 500, 1,000 or more jobs. It seems evident that our
number one crisis is the job crisis. The debt and deficit are very
crucial. My colleagues opposite certainly know that, as they speak
to it all of the time. While we may differ on the pace of the deficit
reduction as part of economic recovery, I do not think we differ on
the goal.
In spite of the importance of the debt and deficit, the number one
crisis in the country we all love is the inadequate number of jobs.
The best way to solve that crisis is through encouraging small
business. It will be through new small businesses starting up and
employing three, five, ten or twenty Canadians that we will create
15910
new employment. We would love to see the large corporations
coming in and suddenly creating 1,000 jobs, but I do not think we
will see that happen too often.
The evidence is clear that Canadians can succeed in small
businesses but they need help. That is what the act is specifically
designed to do. In my riding many women, for example, have
shown great entrepreneurial spirit, have launched small businesses,
have been successful in that regard and have employed three to five
people who before were unemployed.
There is a fairly significant immigrant population in my riding.
There are many Arab Canadians and a large Polish Canadian
community, people from all parts of the world. I see evidence time
and again of how immigrant Canadians come to Canada and
successfully launch new businesses. Despite the xenophobia
Canadians are from time to time perhaps prone to engage in, I can
give many examples where new Canadians have come to Canada,
started businesses and employed three to five Canadians who were
born here in their quite successful businesses. The evidence is there
that small business will really be key to economic recovery and to
solving the jobs crisis in Canada. That is not totally new but it is
much more obvious to us now that it will be the case.
(1010)
Since 1961 more than 400,000 SBLA loans totalling close to $16
billion have been made by financial institutions to small
businesses. The SBLA helps entrepreneurs whose firms have less
than $5 million in annual sales.
I should like to speak about that number for a moment. Within
my party there has been considerable discussion about this subject.
None of the businesses that I referred to earlier do $5 million in
annual sales. Some small businesses of three, four, five or ten
employees do not do $5 million a year in business. We might have
to look at that number as we fine tune. What is a small business?
Does it need sales of up to $4.5 million to $5 million to be
considered a small business? I think not. We should have a look at
that definition.
The program success both as an economic development tool and
as an example of public and private sector co-operation has
inspired similar guaranteed programs at both the federal and
provincial levels. The program will engender new approaches to
encourage small business in Canada. That will be one of its most
important purposes.
I will share with my colleagues in the House today-we are not
as numerous as normal because many of our colleagues are on their
way to or already in Montreal to make their feelings known about
Canada-that the city of London has two important initiatives in
the area of small business worth mentioning. The first is the
advanced manufacturing technology centre that we hope will soon
come to fruition. The groundwork has been laid. It is our
government that announced it. It looks like we might have to scale
it back somewhat because of the economic times we face.
However, at the research park at the University of Western
Ontario in the city of London we are awaiting very anxiously, along
with municipal and provincial government officials, the
completion of the advance manufacturing technology centre. It will
be located in an existing research park and will be a very important
part of helping to encourage innovative technologies and business
opportunities as it combines with research opportunities available
at the university right now.
There has been quite a bit of time spent on the project. It will
come to fruition soon and is anxiously awaited in London. I have
been very pleased to spend quite a bit of time working on the
project along with my colleagues in London. It will be a big benefit
not only to London, Ontario, but to the whole region of
southwestern Ontario.
In southwestern Ontario the agri-food industry is a major
industry. We ought not to forget there are many opportunities in
urban centres and in the agri-food industry for small business. The
centre is awaited with anticipation.
The second successful venture that has been under way for
several years in the riding of London-Middlesex is a small
business centre just inside the eastern part of the city of London. It
is a converted plant that closed some years ago. It was formerly
called Prototool. I remember it well, being that it was my first
summer job. I was there recently for a ribbon cutting ceremony
because they had refurbished and expanded the centre. I made the
point that every time I went there, as much as I enjoyed it, it
seemed as if I was going back to work. In sense I was that day.
(1015)
The small business centre is located in the George Stewart
building which was named in honour of a well known Londoner
who has poured many, many years into the facility. It is a business
incubation centre. The centre helps those people who are starting
up a business with one or two employees. These people need
mentors. They certainly need start-up capital. They need the help
which is available to them largely through the voluntary efforts of
London's successful business people who are now mostly retired
and are willing to help younger people launch small businesses.
The small business centre in my riding of London-Middlesex has
been very successful. It is an example of the type of program the
SBLA meshes with very nicely.
I look forward to the visit of the industry minister to this centre
in November. He will see firsthand the success we can have with
this kind of program. It is an excellent example of why our
government must continue to consider small business as a key part
in our attempt to get the economy moving again.
15911
In recent years the SBLA program had been running at an
annual government cost of some $20 million to $30 million.
Significant changes were made in April 1993. There was a major
increase in activity from some $500 million to over $4 billion in
1994-95. In historical loss rates, this increase in lending was
projected to cost over $100 million which was obviously a threat
to the program in these economic times.
It is a very correct change to the program and a wise move by our
government to move to full cost recovery on this program. We
might say it is a bit of a user pay concept, which I think we are
seeing more of at all government levels. My previous government
experience was at the municipal level in London, Ontario for 13
years. There is certainly a call for more of a user pay concept at all
government levels.
I would never subscribe to the user pay concept for things like
health care. Certainly we on this side of the House would not
subscribe to the user pay concept in health care and in certain other
fundamental core services which as Liberals we believe must be
available to all Canadians regardless of their ability to pay. There is
however a place for the user pay concept in our society.
Moving the SBLA program to full cost recovery is employing
that concept. I applaud the effort of the government in that move.
To this end, the government initiated a review of the program
which included extensive consultations with major stakeholders
representing both borrowers and lenders. Likewise we heard from
the Standing Committee on Industry and the small business
working committee. All of these groups were unanimous in
recommending to the government that we proceed on a full cost
recovery basis which is exactly how the government has
responded.
Two major changes have been made through regulatory
amendments which came into effect on April 1. First, a new 1.25
per cent annual fee was levied on each lender's average outstanding
balance of SBLA loans made after March 31, 1995. Second, the
maximum rate a lender can charge under the SBLA has been
increased by 1.25 per cent to the prime interest rate plus 3 per cent
for floating rate loans and to the residential mortgage rate plus 3
per cent for fixed rate loans.
Bill C-99 will continue the process of renewal by putting in place
additional changes to the Small Business Loans Act. As I said at
the start of my remarks, if we are to make a serious attempt at
solving the job crisis and getting the economy moving again on a
steady basis, we will have to focus our efforts on small business.
(1020 )
I applaud the government for the changes in the bill. It clearly
indicates the intention of our government. That is what I am
hearing from Canadians. In all parts of Canada people are speaking
out with that kind of message. Certainly in my riding of
London-Middlesex new business opportunities and job creation
are happening in the smaller micro-firms with one to four
employees. The government is moving in the right direction.
We need to consider what is a small business. Five million
dollars strikes a lot of people whom I know in business as a pretty
big number to achieve. They would be thrilled with that, but they
do something like $750,000 or $1 million worth of business each
year. We have to continue to look at that number to determine
exactly what constitutes a small business.
I want to say very clearly that this bill is a major step in the right
direction. I am pleased as a member of the government to be part of
the team which recognizes that we have to make this a priority.
[Translation]
Mr. René Laurin (Joliette, BQ): Mr. Speaker, I want to start by
thanking the hon. member for London-Middlesex for expressing
these thoughts inspired by our prayers this morning. I share them. I
think the people of Quebec are focused on this crucial moment in
their lives and accept the mark of affection shown by anglophones
today.
We are sure that this demonstration of affection, friendship and
even love, as some were saying, will last more than one day. Indeed
we are confident that this demonstration of love and friendship will
last for more than one weekend and that the best way to ensure that
it does is to accept and respect the decision of the people of Quebec
and thus transform these marks of friendship into acceptance of a
rewarding and effective partnership between our two nations.
As far as the bill is concerned, I must deplore one thing. It is true
that the bill raised the maximum for small and medium size
businesses. However, one of the main problems for job creation,
especially in Quebec, is the fact that very small businesses do not
have access to these loans because the criteria have become more
restrictive.
We must not forget that nearly 90 per cent of all new jobs,
according to the figures for Quebec, are created by very small and
medium size businesses. They should be helped. These are not
businesses that require start up capital in excess of $250,000,
$500,000 or one million dollars.
Last month, I witnessed the birth of thirty or so very small
businesses in my riding, started by people who were on
unemployment insurance, people who had decided to take the
initiative and create their own jobs, set up their own business. In
the process, they created some forty new jobs, and they were able
to get started thanks to loans which, in most cases, did not exceed
$10,000.
In other words, what we need to help these small businesses is
not a higher maximum. There was nothing wrong with the
maximum. The problem is a lack of more flexible criteria that
would
15912
give these very small businesses access to more readily available
venture capital.
I do not think the bill makes any provision for this, although in
some respects it is well intentioned. I think the bill will not do
anything to promote very small businesses. I would appreciate the
hon. member's comments.
(1025)
[English]
Mr. O'Brien: Mr. Speaker, I thank my colleague for his
comments.
He addressed my remarks about the outpouring of affection-I
think that is the right word-and concern of other Canadians that
Quebec remain part of the Canadian family. He spoke about his
wish that this would continue. I fully support that. I fully and
completely support that as a francophone who for most of my life
has understood and appreciated the importance of Quebec in this
country.
Every chance I get I emphasize to people in my riding that we
need to make clear that we understand and realize the importance
of Quebec in this country. I can assure the hon. member that if the
vote is a no vote, as I hope it will be, I will continue to say that after
Monday. I applaud that sentiment.
I disagree with the hon. member when he spoke about the need to
forge a new partnership. I simply ask him and all Quebecers to
reflect on the fact that we have had a successful partnership in
Canada for a long time. Yes, we have had our problems. We have
had our quarrels as families will, but we have been able to work
through them. We have worked them out. It was not lightly or
easily that Canada was recognized as the best country in the world
in which to live.
I ask him and all Quebecers, as the Prime Minister has done
much better than I can do, to reflect very carefully on the fact that
together we have built the best country in the world. It would be a
tremendous risk and gamble to vote to break up our family. I
sincerely hope Quebecers will not do that when they vote on
Monday.
Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.):
Mr. Speaker, I listened with interest to the member for
London-Middlesex speaking on Bill C-99, an act to amend the
Small Business Loans Act.
I conducted a survey of my constituents. In my householder I
asked questions about increases in government spending. There
were some increases in the area of regional development loans,
particularly western diversification which affects my part of the
country and also FORD-Q and ACOA.
People in my riding were very opposed to these loans being
offered to regions outside of our area of the country. Even on loans
granted through western diversification which affected them, there
was about a 50-50 division on whether it was the right procedure.
I would like the member to comment on the problems loans
based on regional development are causing in the country and
perhaps some of the divisions we are dealing with in the
referendum campaign which perhaps have been caused by the
regional development approach. Maybe the better route would be
to put more of our eggs into this type of basket, a national program.
This would affect small business right across the country on the
same basis with the same rules rather than dividing the dollars into
regional development programs, often loans, particularly to
Atlantic Canada through ACOA or to western Canada through
WED.
Those programs are causing hard feelings. Western Canada has
looked at ACOA and said it has not worked. We have been
pumping regional development dollars either through grants or
loans into Atlantic Canada and unemployment is rising in Atlantic
Canada. We have been pumping dollars for regional development
into Quebec and some Quebecers want to separate. We are hoping
less than 50 per cent want to separate, but it is not creating national
unity by putting dollars through grants or loans into regional
development.
Would it not be better to put money into loan guarantees for
small business on national programs? It might make us feel as if we
are all playing on a level playing field rather than making people
angry by dumping some money into western Canada, some into
Atlantic Canada, some into Quebec and some into the north.
Mr. O'Brien: Mr. Speaker, I appreciate my colleague's
questions and comments on this program. I do not think he used the
phrase but I think he is questioning the efficacy of the whole
concept of regional economic expansion.
I come from southwestern Ontario, which is a rather successful
part of Canada when we look at the full nation, although we
certainly have some problems to solve such as unemployment. We
are doing our best in that regard.
(1030 )
My colleague opposite comes from the province of
Saskatchewan and he understands that his part of Canada is quite
successful. However there are some problem as well.
The question my colleague puts is an either/or. Should we put all
of our attention on to the small business loans approach or should
we continue with the concept of sharing economically through a
regional economic sharing of resources? Frankly, as a Canadian I
reject the choice. I do not think it is an either/or. The answer to my
colleague is that we should do both. I believe there is a place for
both.
15913
The people I represent by and large understand and appreciate
that they are economically in an advantaged part of Canada. They
are quite prepared and magnanimous enough to share with other
Canadians as part of the price to pay to have a nation from coast
to coast.
I will be candid and say that we had a little dispute recently about
the idea of some workers coming from Cape Breton. The question
was never where the people came from. We have thousands of
Atlantic Canadians and Canadians from all other provinces living
and contributing to the community. The only question was to what
degree the trip would be subsidized.
As far as the concept of sharing and being open to Canadians to
come to our city or sharing our resources with people from coast to
coast, the people I represent endorse that. They see it as an
important part of being a Canadian. It is a small price to pay to be
part of the great nation we all live in.
The Speaker: That concludes the portion of the debate of
20-minute speeches and 10 minutes of questions and answers.
What we are going into now-
[Translation]
From now on, those wishing to speak will have ten minutes, but
there will be no questions and comments.
Resuming debate.
[English]
Mr. George Proud (Hillsborough, Lib.): Mr. Speaker, it is a
pleasure for me to rise today to support Bill C-99, an act to amend
the Small Business Loans Act. This legislation is just part of the
whole Liberal approach to government.
Members may recall the current Liberal government was elected
on a jobs and growth agenda as promised in the red book. Two
years ago the government was given a mandate to revitalize
Canada's economy. All Canadians, including the people of Quebec,
are benefiting from these promises.
Our economy is still recovering from one of the worst recessions
in our history. The recession was not only just a slowdown of our
economy but a massive reorganization of how our economy
operates. It has been a painful journey.
The previous government led us down this debt ridden path but
we are getting Canada turned around and moving back toward
prosperity. The Liberal government through its jobs and growth
agenda is creating an economic atmosphere conducive to job
creation. Over the last two years we have created approximately
half a million full time jobs.
The main pillar of our approach is to reduce the deficit. By
reducing the deficit the government will break the crutches that are
slowing down our economy. The federal government, as we all
know, is under tremendous financial strain. Some people criticize
our cuts, they are not enough or they are too much. But the
government is committed to a balanced and a realistic approach. In
contrast, the third party proposes devastation through its plan to
eliminate the deficit in three years. I am no economist but I know
that such a plan is much too severe and would do more harm than
good.
(1035)
Our deficit reduction plan is based on credible analysis of our
situation. We have instituted short term goals that have been
reached. We are on the track to achieving this year's target of $32.7
billion. In next year's budget we will reach our election promise of
a budget deficit of only 3 per cent of GDP.
It will not stop there. We will continue to set short term goals and
before the end of the century we will see the light at the end of the
tunnel.
The proposed amendments to the Small Business Loans Act
follow our plan. Some may ask how. We did not call our red book
``Creating Opportunity'' for nothing. These amendments will
create more opportunities for small and medium size businesses to
access the capital they need.
More entrepreneurs will obtain loans to make their business
dreams become a reality. Through these new private sector
initiatives, made possible by the Small Business Loans Act and the
proposed amendments in Bill C-99, new jobs will continue to be
created.
As some of my colleagues have already pointed out, the Small
Business Loans Act is not new. However, earlier this year we made
regulatory changes to the act in order to make it more effective and
accountable. Only those who truly need our assistance will receive
it.
The fee structure introduced in April of this year serves to
encourage those applicants who are more financially secure to seek
capital loans directly from financial institutions without the federal
guarantee. It will also provide an incentive for borrowers to down
the road seek normal commercial financing as soon as possible.
This is consistent with the many other policies we have
introduced. Our government believes that it must carefully review
all government activities, to recognize areas where we can achieve
our objectives more effectively.
We conducted one of the most, if not the most, extensive
program reviews by any federal government. This is one of those
areas and we have made some necessary changes. Due to the
competitive environment of the financial sector, we believe that the
new fee structure, whereby the administration fee is incorporated in
the interest rate, will improve the effectiveness of the program.
15914
A further step has been taken by the amendments contained in
Bill C-99. We have already made the program more effective and
accountable on the user side of it, but now our side must be
streamlined. Bill C-99 addresses that matter. With the
implementation of this bill, the program will be a full cost
recovery program. As I mentioned earlier, we are reducing our
deficit. It is through changes like these that allow us to reach our
deficit targets.
We will also be improving the loan guarantee coverage for low
volume lenders. This is an important aspect that should not be
overlooked. Better coverage for the smaller lenders will strengthen
our financial sector. These financial institutions may be small, but
collectively they count for a significant portion of the loans
administered by this program.
Previously these lenders in relative terms were vulnerable to a
greater proportion of losses. Due to the existing regulations, these
institutions were limited in the amount of losses that could be
claimed to the federal government. The new provisions create a
more equitable arrangement for these small lenders.
On Tuesday I heard some members from across the floor state
that this bill violates the democratic process. On the contrary,
extensive consultations were held to get the views of all sides of the
issues. We reviewed the report of the Standing Committee on
Industry. What more do they want? We listened to the Canadian
Federation of Independent Business. We listened to the Canadian
Chamber of Commerce. We listened to the Canadian Bankers
Association, to name a few. Through those consultations we
obtained substantial support for proposed changes.
Furthermore, some of the provisions of this bill were a direct
result of the report from the industry committee. On going back to
the red book, we promised to regain the confidence of Canadians.
We want Canadians to be able to believe in the political process.
Over the last two years we have been reintroducing integrity into
the political process. Again, someone might ask how. It is by
holding consultations with Canadians, by listening to Canadians,
which is more than I can say for official opposition members. They
are so busy listening to themselves that they cannot hear
Canadians, including Quebecers, telling them they want Quebec to
stay in Canada.
The Small Business Loans Act plays an important role in my
province of Prince Edward Island. In the previous fiscal year loans
under this program totalled $21.8 million. This is a substantial
amount of money for a small province. Our economy is seasonal by
nature. Any initiatives to create business operations that can
counter the seasonal aspect of our economy are very welcome.
Small firms wanting to expand can do so with financing under this
program. Entrepreneurs with dreams of owning a successful
business are given a chance under this program.
(1040)
Our economy has an abundance of small and medium size firms.
The Liberal government acknowledges this reality and knows how
to address the concerns of Atlantic Canadians. When it comes to
small business, a loans program is not the only solution. This is just
part of a larger package. We have refocused our regional
development programs on small businesses, in particular I am
referring to the Atlantic Canada Opportunities Agency. ACOA has
been instrumental in assisting small businesses in Atlantic Canada
and it has done so through many varied ways.
I would like to point out a few recent activities of ACOA. Just
last week ACOA hosted a delegation of trade representatives from
the Russian federation. The delegates were here to pursue joint
ventures between Russian and Atlantic Canadian firms. Among the
topics discussed were geomatics, aquaculture, agriculture products
and current trade activities in other sectors.
This is an important step for business in Atlantic Canada. We are
becoming more aggressive in pursuing world markets and the
Russian federation, although poor economically in many standards,
is open for investment opportunities.
In September the Atlantic Canada Home Program was held in
Halifax. The program was designed to take advantage of
opportunities created by the deregulation of building standards in
Japan which permits a wider range of home construction. Prince
Edward Island was represented there by the provincial minister of
economic development and tourism.
Canada is always searching for new markets to access
throughout the world. Our economy is geared toward exports. Our
relations within the global economy are what is helping to drive the
Canadian economy.
The government is working with the private sector and the
provincial governments to open up new markets abroad, to ensure
that Canadian firms have access to markets they need to grow and
create more jobs. We need to do all we can to assist in that aspect
and Bill C-99 in part does just that. We are improving a federal
program so that it can adjust to current demands and be more
flexible to meet our future demands.
Last week, on the eve of small business week, the Association of
Atlantic Women Business Owners hosted a conference, trade show
and an Atlantic Hall of Fame for Women Entrepreneurs, a
ceremony sponsored in part by ACOA. The theme of the
conference was ``New Markets and Opportunities for Growth''.
15915
To me that sounds a lot like our jobs and growth agenda. Is it
not funny how our approach is similar to private enterprise? I
believe that would suggest that we are going about our business
in the correct fashion.
Earlier in the fall also in Halifax key stakeholders in the Atlantic
Canada economy discussed the business support system for young
entrepreneurs. This was hosted again by ACOA. It was designed to
highlight the needs and challenges facing our young entrepreneurs
and establish services to meet those needs as well as to encourage
young people interested in starting their own businesses. These
young people are the future of the country.
Mr. Speaker, I thank you for allowing me the time to speak in
support of this bill because I believe it will give to the small
business community the impetus it needs to get up and get going.
Mr. Paul Steckle (Huron-Bruce, Lib.): Mr. Speaker, it is an
honour for me to speak on Bill C-99, an act to amend the Small
Business Loans Act.
Along with my colleague from London-Middlesex this
morning, I extend my thoughts to those people who have travelled
from our various communities today to the heartland of Quebec, to
Montreal. Our thoughts are with these people. We all share the
same common sentiment that we want to have Quebec remain a
part of us and share the business climate we have in this country
come Monday of next week.
As the member of Parliament for Huron-Bruce, representing a
small yet mostly rural riding, I do not have large municipalities. I
do not have large urban centres. The largest community in my
constituency is the town of Goderich which has 8,000 people. In
Goderich there are two main plants, which employ 900 people:
Champion Road Machinery, a manufacturer of road graders and
other roadbuilding equipment, and Sifto Salt Mines, which
produces the third largest quantity of salt in North America.
(1045)
As a rural constituency, the businesses we have are largely small
in nature. Many of the businesses are agri-related. When I was
elected to be the member of Parliament for Huron-Bruce, I
believed, as do all members of the House, that we were elected to
create a climate of employment in Canada. We spoke about jobs
and growth. This bill goes a long way in helping us to achieve those
goals.
How do we create jobs? Government cannot by itself create jobs.
Government jobs are largely jobs that do not contribute to the GDP
of our country. While government cannot create jobs, government
can certainly create an environment in which business can grow
and prosper. The importance of Bill C-99 is that it becomes another
avenue for small business to access capital and operating moneys.
As I said earlier, I represent a small rural constituency. We have
many resources in our riding. Most of them are rural agricultural
resources: wheat, hogs, beef and all the other commodities we
grow so well in Huron-Bruce. The riding produces more dollar
value in agricultural products than any riding east of Winnipeg. I
therefore speak with a great deal of pride as I speak about my riding
this morning.
The greatest resources in any riding are the youth of our
communities. When we closely examine the resource of youth we
find that many of these young people upon completion of their
secondary education move on to other communities. For the most
part they leave to further their education and then go on to careers
often in large urban centres simply because job opportunities are
not as plentiful today as perhaps they were a decade ago, certainly
not in small communities.
Some of these youth are now returning to their communities of
origin simply because jobs in the urban centres are not as plentiful
as they once were. The young people are returning to their
communities, in some cases to enter into a partnership with a
family business or to enter into a partnership with an established
business. In some cases they are coming home to seek the future
they have dreamed of, a career of choice based on and related to the
training and educational background they have achieved.
This is where the banks and the lending institutions become
involved. Allow me to give a personal example. About eight years
ago our two sons had a dream. Upon completing their secondary
education they wanted to pursue a business career. One of the first
things they had to do was find the capital required to begin a
business. That was the first experience. Of course they had to visit
the bankers. They found that the bankers were not all in agreement
with their dream. In many cases they were turned away. However,
there was one banker who, because of his appreciation for young
people, sensed that there might be merit in the dream and that it
might go somewhere. He invited them in. He asked their father to
sign a few papers and these two young men began a business.
It has been eight years since they began the business. They have
realized their dream. The dream will continue. It was only six
months after they had begun the business that they asked the banker
to remove their father's name from the papers. People are realizing
their dreams in the country. This is an example of what can happen
when we take those dreams to the ultimate end. Now that they have
established their business it is the bankers who are knocking on
their door to see if they can lend them a bit of money.
(1050)
My point is that the risk in doing anything is always great but I
believe we have to take some of these risks. When I chose this
position in Parliament I accepted a risk. I was walking away from a
15916
business that had given me 21 years of fruitful employment. My
background in small business and in the agricultural sector gave me
an appreciation for and insight into the borrowing needs of small
business.
Early in my new career as a member of Parliament I quickly
became aware of the inability of entrepreneurs to gain access to
business capital. If there has been one area of frustration in my
career as a politician it has been that of my being unable to resolve
the matter of banks and small business.
A few months ago Bluewater Fibre Inc., with 150 employees in
the northern part of my riding, found itself in the very untenable
position of risking closure of its plant if a resolution of a border tax
was not found. To the credit of the Minister of Finance's
department, this issue was resolved and the jobs of 150 people were
ensured.
Another situation concerns Tackle Windpower, a manufacturer
of rotor blades for windpower electricity generation, which just
recently began manufacturing in Huron Park in the southern part of
my riding. Before this company turned one employee hour in its
plant it had $9.5 million in guaranteed orders for a product it was
about to build, but it had difficulty in obtaining a $500,000
operating loan. Through much difficulty and a great deal of effort
on the company's part and a small effort on my part, financing was
finally procured. This company started with two, three, four
employees, and has now reached 28 employees and is quickly
moving to full employment of 70.
Stories like this go on and on. How many members here would
have believed that so much of our time would be spent on helping
small business achieve funding and financing?
There are two million small businesses in Canada, and 82 per
cent of new jobs created are created by small businesses. When one
puts these numbers in perspective it puts a new importance on
entrepreneurialism. If every small business would employ just one
more person we would eliminate unemployment.
This is an important bill for two reasons: the increase in the
maximum size of the loan to more accurately reflect the realities of
doing business, and the movement of the SBLA to full cost
recovery, a measure in keeping with our promises as a government
to maintain fiscal management policies.
Given the extensive consultations with the major stakeholders, it
is imperative that we seek swift passage of this bill for the benefit
of all small businesses in Canada. I look forward to supporting this
bill at a future time in the House.
[Translation]
The Speaker: The hon. member for St. Boniface has the floor.
As you know, dear colleague, you will start your address and will
finish it after question period. Agreed?
Mr. Ronald J. Duhamel (Parliamentary Secretary to
President of the Treasury Board, Lib.): So, Mr. Speaker, I shall
have two speeches.
I am pleased to speak today on the Small Business Loans Act. I
shall address the key principles rather than its details, which some
of my colleagues with an in depth knowledge of this field have
already done.
I wish to point out that this bill is part of a total strategy for
supporting the growth of small businesses, particularly their access
to capital. This must be clearly understood. We wish to provide
more help to small business so that they may grow, have greater
access to capital and thus create additional employment. We are
very much aware that the bulk of jobs created over the past decade
have been in small and medium size businesses. The figures
indicate 85 to 90 per cent. This is very impressive.
(1055)
This bill was proposed after much consultation with lenders and
borrowers. It is not something that we just decided to impose. It is
not something where we are just going ahead without consultation,
without advice from all sides, because we believe that the way to
have an excellent bill, with a better chance of success, with a better
chance of being accepted by those targeted by it, is to ensure that
there have been consultations. This has been done country-wide
with the groups I have referred to.
Another very important aspect of this bill is self-funding. Yes,
costs will be higher, because we want it to be self-sustaining, but
this is in keeping with two government policies. The first is to
decrease, if you will, grants and subsidies to business. We realize
that, in today's reality, there is less financial flexibility and that we
must reduce the costs of government. Reducing these financial
supports, if you will, to businesses is one way of being proactive
and attaining that objective.
Another objective is reduction of the deficit and the debt. Since
this program will be self-supporting, there will be less government
money going to businesses. This will have a positive impact on the
deficit and the debt. I must add that the new program will provide a
better response to businesses needing funding. This is very
important.
We are well aware that 30 or 40 per cent of businesses receiving
assistance at this time can go to a bank or a caisse populaire and
have their needs met by those institutions. So, if 30 or 40 per cent
go elsewhere for solutions to their financial needs, more financial
assistance will be getting to the businesses that need it.
15917
I have spoken to a number of Manitoba businessmen and
businesswomen in my riding and all have indicated to me that this
was a step in the right direction. This is an example of a federal
government initiative which is country-wide, an example of what
we can do together. I will close on this and pick up where I left off
later on.
The Speaker: Thank you, dear colleague. It being 11 a.m., we
will now proceed to statements by members.
[English]
I know this is a very special time for all of us but with all respect,
should you be tempted to use what I call props I would prefer that
you did not.
_____________________________________________
15917
STATEMENTS BY MEMBERS
[
English]
Mrs. Carolyn Parrish (Mississauga West, Lib.): Mr. Speaker,
through a project called ``Cher ami'', 5,000 children in my riding
of Mississauga West have written in French to the children of the
province of Quebec in a gesture of friendship. They want to show
that French is spoken all over Canada and that there is no such
thing as ``English Canada''.
I will read today a few excerpts from the children's letters. From
six-year-old Diane:
[Translation]
``Hello, my name is Diane. I am six years old. I like speaking
French. I love Canada and Quebec."
[English]
From a grade eight student at St. Rose de Lima School:
[Translation]
``Dear friend, I love Canada, because I love the winter and the
summer. I love Canada, because it is a multicultural country. It is
important to have friends in Quebec, because that gives us a chance
to learn about another culture''.
[English]
If children can understand that fundamentally we belong
together, so should we. Several hundred thousand people
demonstrating in Montreal today also agree.
Mr. Speaker, I will respect your wishes and not lift this box of a
thousand letters on to my desk.
The Speaker: I do thank you for that.
Mr. Jack Ramsay (Crowfoot, Ref.): Mr. Speaker, yesterday
constitutional lawyer Peter Hogg and former deputy minister of
justice Ian Binnie appeared before the Senate justice committee on
the gun control bill. These two respected lawyers stated
unequivocally that the government has not consulted with the
aboriginal people, as required by section 35 of the Constitution.
According to this testimony the constitutional rights of the
aboriginal people have been abrogated by the government. Bill
C-68 will directly affect aboriginal treaty rights and therefore they
should have been consulted.
(1100)
Mr. Binni went on to say that Bill C-68 indicates that the
government did not consider how the legislation would affect
aboriginal people and called it an abdication of their responsibility.
The justice minister states that Bill C-68 is a done deal. I suggest
nothing could be further from the truth.
* * *
Mr. Walt Lastewka (St. Catharines, Lib.): Mr. Speaker, I
speak on behalf of my colleague from Peterborough who lost his
voice and on behalf of the people of St. Catharines.
Four buses, two from each city, two cities which normally
compete with each other, today drive together to join people from
all over Canada at the no rally in Montreal.
Today Canadians are voicing their opinion. They are in Montreal
to say to Quebecers that they want to stay together, they want to
stay united. They are also reminding Quebecers of the seriousness
of the vote.
Canadians are asking Quebecers to say no to destroying our
political union, to say no to destroying our economic union, to say
no to destroying Canada as we know it and as it has existed for
many years.
Keep the family together. On Monday vote no. As proud
Canadians we say let us keep the country together. We join in spirit
with our constituents in Montreal in saying our Canada includes
Quebec.
* * *
Mr. Russell MacLellan (Cape Breton-The Sydneys, Lib.):
Mr. Speaker, it is with pleasure that I rise today to offer birthday
wishes to a great Canadian.
On October 30, Mr. Johnny Miles will be celebrating his 90th
birthday. Mr. Miles is a two-time winner and the oldest surviving
winner of the Boston Marathon.
15918
As a native of Sydney Mines, Nova Scotia, and a current
resident of Hamilton, Ontario, Mr. Miles has been a role model
for generations of young athletes all across Canada.
He is a distinguished ambassador of Canadian amateur sport who
has been honoured with the Order of Canada and inducted into the
Nova Scotia and Canadian Sports Halls of Fame.
As a proud Canadian, Mr. Miles has said that nothing gives him
greater pleasure than to do something for his country. We should all
take pride in what this fine Canadian has achieved. I am sure my
colleagues will want to join me in wishing him a very happy 90th
birthday.
* * *
Mr. John Finlay (Oxford, Lib.): Mr. Speaker, I believe
passionately in this country and its citizens. Whether we belong to
one of the three founding realities in Canada, the aboriginal people,
the French or the English, or whether we hail from a group that
chose to come to Canada to find a nation that provided hope and
opportunity, we love our country.
This summer I visited communities in the Gaspe region of
Quebec. I did not meet wild eyed separatists with an animosity
toward Canada. Instead I met people who deeply respected Canada
but were also proud of their distinct culture and traditions.
I will not raise the letter I have on my desk, but I have a letter
signed by 65 seniors in my riding asking me to tell Quebecers to
stay in Canada so that we may continue to be together in the
world's best country.
The only way to do this is to vote no on Monday.
* * *
[
Translation]
Mr. Maurice Godin (Châteauguay, BQ): Mr. Speaker, Bob
White, the most powerful union leader in Canada, warned
Canadian political leaders against being vengeful following a
victorious yes vote in the referendum on Monday. He called on
them to act responsibly and to negotiate with Quebecers, saying
that millions of Quebecers want a different relationship and
different recognition by Canada, and so serious discussions will
have to be undertaken.
Mr. White acknowledged that it was in Canadians' and
Quebecers' interest to establish an economic and political
partnership. Given the size of the stakes involved, it would
probably not be hard to find support among business people to
defend and promote a partnership with Quebec.
Quebecers will vote yes on Monday, confident in their ability to
finally negotiate with their Canadian partners as one people with
another.
* * *
(1105)
Mr. Stephen Harper (Calgary West, Ref.): Mr. Speaker, today,
we should express our true sentiments. People know where I stand,
I support a no vote on Monday. I am for a French Quebec in a
united Canada.
During this referendum campaign and since my election here, I
have had the opportunity to improve my ability to speak the
beautiful French language. I am very grateful indeed for the
patience, tolerance and friendship of federalist and sovereignist
Quebecers.
I think people are fortunate to be Quebecers. They are part of a
large family. In my view, this family has long been divided by this
national question. I hope that, whatever the outcome, the family
will be reunited Monday evening after the vote.
* * *
Mr. Ronald J. Duhamel (St. Boniface, Lib.): Mr. Speaker, the
Parti Quebecois claims it will save $3 billion in an independent
Quebec through the elimination of the overlap and duplication of
the federal system.
How does Premier Parizeau expect to achieve this objective
when he is promising to hire the thousands of federal public
servants living in Quebec? Premier Parizeau said in August of this
year that an independent Quebec could not hire all the federal
public servants working for the departments of agriculture and of
the environment, for example, because Quebec's departments in
these areas are already fully staffed.
The so-called promise the Government of Quebec is making to
hire federal public servants living in Quebec reminds me of the
generous collective agreements the Parti Quebecois accorded
Quebec public servants prior to the 1980 referendum. Following
the rejection of the referendum question, the Parti Quebecois
government then cut provincial public servants' salaries by some
20 per cent. Federal public servants have therefore every reason to
mistrust the Parti Quebecois promises.
* * *
Mr. Roger Pomerleau (Anjou-Rivière-des-Prairies, BQ):
Mr. Speaker, today, the federal government and the Canadian
establishment are putting all their power at the service of the No
cause: a paid holiday for employees who want to attend the rally in
15919
Montreal, transportation services subsidized by the major
Canadian carriers, and I could go on. Even Ottawa high school
teachers are using school buses to send their students to the rally in
Montreal.
As the director general of elections in Quebec reminded us, all
these referendum related expenses by the federal government and
private enterprise violate Quebec's referendum act, since any
service that promotes a referendum option constitutes a regulated
expense. The Liberal Party of Canada and the federal government
are supporting these illegal referendum expenses.
This rally in Montreal was meant as a demonstration of love. Is it
becoming a giant intimidation manoeuvre paid for with taxpayers'
money, in defiance of the referendum act and of all Quebecers' idea
of democracy?
* * *
Ms. Albina Guarnieri (Mississauga East, Lib.): Mr. Speaker,
at this very moment, thousands upon thousands of Canadians from
coast to coast are gathering at Place du Canada to join the most
popular Prime Minister ever to lead the best country in the world.
In this great Canadian pilgrimage, hundreds of constituents from
my riding of Mississauga East are opening their hearts to their
friends and relatives in Quebec, going even further for a strong and
united Canada.
Today's rally will show the rest of the world that the Canadian
people are a great people whose warmth transcends any division in
this united nation they love with all their heart.
Canadians are together and want to stay together because
Quebec and Quebecers are at the heart of the Canadian dream.
* * *
[
English]
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr. Speaker, I
have listened to members across the way cry out with
self-righteous and sanctimonious indignation about the need for a
code to govern freedom of speech in the Chamber. Perhaps they
should start with their own party.
Recent remarks made yesterday by the minister of fisheries and
by the Deputy Prime Minister about members of the Reform Party
have reached an all-time low. The Deputy Prime Minister stated
publicly that the Reform Party wanted Quebec out of
Confederation. This is not only totally untrue but it is so untrue that
it is offensive. We are communicating in the newspapers with one
million Quebecers this week on our proposals for decentralization
which will contribute to national unity.
(1110)
If the Deputy Prime Minister wishes to do something positive for
national unity, she should stop misrepresenting the views of loyal
Canadians.
* * *
[
Translation]
Mrs. Anna Terrana (Vancouver East, Lib.): Mr. Speaker, the
members of the Bloc Quebecois keep focusing on the past, and only
on the negative aspects of the past. They do not remember the
positive aspects, like what we have built together, what we have
become collectively and the efforts made by many Canadians to
give Quebecers opportunities and rights that no other province has.
I would like to inform this House that the constituents of my
riding of Vancouver East and of every riding in this country, from
Tofino to Signal Hill, including a large number of Quebecers, are
saddened by the actions of those whose goal is to destroy Canada.
On the other hand, you have people like the Prime Minister, who
have been fighting for many years to make sure that all Canadians
have equal rights.
Today, Canada is doing as well as any country with a huge
territory, a small population and diverse needs can expect.
Canadians are fond of their country. They do not say it too often,
but they are proud of the maple leaf, their passport, the freedom
they enjoy and the respect they are shown everywhere else in the
world by people who cannot understand-
The Speaker: I am sorry for interrupting. The hon. member for
Shefford.
* * *
Mr. Jean H. Leroux (Shefford, BQ): Mr. Speaker, just four
days before the vote is held, the Prime Minister of Canada is still
beating around the bush about recognizing the referendum results.
If 51 per cent of the population vote no, that is a good result, but
if 51 per cent vote yes, that is a different story. The Prime Minister
of Canada is out full time on the referendum campaign trail, and he
will be voting on Monday. He is taking part in the referendum, yet
he still refuses to commit to recognizing a yes victory.
There is nothing more democratic than a referendum in our
society, and Quebecers will not tolerate having their choice put
down.
15920
On Monday, the majority of Quebecers will vote yes. This
strong yes will show that they are united and stand as one. It will
ensure that, as a sovereign people, their laws and values will be
respected.
* * *
[
English]
Mrs. Marlene Cowling (Dauphin-Swan River, Lib.): Mr.
Speaker, I stand today to add my voice to the chorus of voices
ringing from coast to coast to coast calling for a united Canada.
Yesterday three 16-year old high school students from Russell,
Manitoba landed in my office en route to Montreal for the no rally,
hungry and tired. They had driven all night to get to Winnipeg to
catch a plane to Montreal. They were spending their hard earned
money to demonstrate how important their country is to them, how
their country Canada includes Quebec.
The courage and commitment of these young people is a shining
example of the belief western Canada has that a strong Canada is a
united Canada. They represent the sentiments of thousands of
Manitobans who could not make the journey but whose hearts are
in Montreal today for their love of the greatest country in the
world. Vive le Canada.
* * *
[
Translation]
Mr. Lee Morrison (Swift Current-Maple
Creek-Assiniboia, Ref.): Mr. Speaker, separatists and traditional
federalists say that it will be either black or white with the
referendum, that is independence or status quo.
By contrast, the Reform Party pledged to renovate the Canadian
home. You do not burn down a nice house just to get rid of a few
cockroaches. You simply clean it.
Millions of Canadians, including many outside Quebec, have felt
frustrated and threatened by the centralizing governments which
have dominated our confederation by taking advantage of regional
splits and claim that they were acting in the national interest.
(1115)
A no vote in the referendum will open the door to a new
decentralized Canada, patterned on the model proposed by the
Reform Party, which is designed to give greater autonomy to the
provinces.
Hon. Charles Caccia (Davenport, Lib.): Mr. Speaker, at this
important time in our history, we must remember that
environmental issues know no political boundaries.
Federal initiatives such as the Fisheries Act and the Canadian
Environmental Protection Act protect public health and all
Canadians. For example, those who live close to the St. Lawrence
River benefit a great deal from these laws. Indeed, since 1990, the
federal government has spent millions of dollars to clean up the St.
Lawrence River.
Moreover, the international agreements negotiated by Ottawa on
acid rain have benefited all Quebecers. Consequently, those who
take the environment seriously should reflect on the positive
aspects of Canadian federalism, before casting their vote on
October 30. Let us not forget these major federal initiatives.
_____________________________________________
15920
ORAL QUESTION PERIOD
[
Translation]
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, the
president of the Canadian Labour Congress, Mr. Bob White, said
that Canadian workers should continue to maintain close ties with
workers in Quebec the day after a yes vote and that negotiations
with Quebec should start without delay.
Politicians in the rest of Canada should do likewise to ensure the
stability of Canada and Quebec the day after a yes vote. Yesterday,
the Prime Minister said that 50 per cent plus one was enough if it
was a no but not if it was a yes.
My question is directed to the Minister of Intergovernmental
Affairs. How can the Prime Minister of Canada question the
validity and outcome of this democratic exercise and go so far as to
say that 50 per cent plus one is all right for a no but not for a yes?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, we should recall that a few months ago, the Leader of the
Opposition said clearly: ``If it is yes, it is sovereignty; if it is no, we
will do it again''.
The Official Opposition should not be surprised if we say: ``We
expect it to be no''. That would be the right answer, for Canadians
who are now in Montreal to show their solidarity to Quebecers and
for Quebecers who have gained so much from Confederation.
15921
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, on this
last sitting day of the House of Commons before the referendum,
I think it would be appropriate for the minister to be accurate and
direct in his answers to my questions.
He knows perfectly well that the Leader of the Opposition and
all the people on the yes side have always said, on every occasion,
that they would respect the verdict of the people, the outcome of
this democratic process.
My question, and I would appreciate a straight answer, is this:
Why, when it is about their side, does the Prime Minister seem
unwilling to commit himself to respecting the democratic process,
going so far as to say: ``If those are the results for the no side, we
agree, but if the same figures turn up for the yes side, we do not''?
Let him explain that instead of trying to skirt the issue.
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, the hon. member for Roberval implies he has the right to
make preambles in which he says things that are inaccurate, makes
statements that do not correspond with the facts and indulges in
innuendo directed at those involved in the campaign, as he just did
in my case.
He seems to think we will be less than democratic as we explain
our position. He should know better, considering his experience in
the House.
(1120)
We made it quite clear that we believe the no side will win and
that Monday Quebecers will realize that separation is not the way
to go, and that is why we are clearly indicating that with a no, we
will be able to continue to implement reforms in Canada.
Mr. Michel Gauthier (Roberval, BQ): Mr. Speaker, I am sorry
but the minister will not get off that easily. I am entitled to three
questions, and so for the third time I will ask him to make his
position clear to Quebecers, to set aside his customary arrogance
we have seen enough of and give a clear answer to Quebecers.
Can the Minister of Intergovernmental Affairs, who is speaking
on behalf of the government today, explain clearly, honestly and
frankly how the Prime Minister of Canada can say: ``Fifty per cent
plus one for the no is fine. I can go along with that. Fifty per cent
plus one for the yes, I am not sure''. What explanation does he have
for an attitude that is so obviously unacceptable? I would like an
answer.
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, this day and the next few days are too important for us to
waste our time responding to invective from the opposition. Their
attitude is not very parliamentary.
On the fundamental issue, we have always said that we recognize
the democratic right of Quebecers to vote in a referendum, but we
have also clearly indicated our position and the fact that we believe
the no side will win.
The Leader of the Opposition has indicated that if it is a no, he
would not accept the outcome, so why does the hon. member for
Roberval not talk to his own leader and tell him that his answer is
not democratic because he does not accept the answer given by the
people, while we believe our position is democratic, especially
considering that 32 per cent of Quebecers have indicated that a yes
vote means they very properly want the province of Quebec to
remain a part of Canada.
The Speaker: Dear colleagues, I am sure that today, like all
other days, we will always show respect in speaking to each other
here in the House of Commons.
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, let us make things perfectly clear. The Leader of the
Opposition has said that he would respect the decision of the men
and women of Quebec, which does not prevent our continuing to
battle for our ideals as in 1980. René Lévesque kept his word,
which the Prime Minister of Canada did not, and once again will
not. If the minister cannot see the difference between continuing to
fight for one's ideals and implementing a legal decision, he has a
big problem, and it is not from the neck down.
The Prime Minister, who is seeing the choice of Quebecers being
increasingly confirmed, has been quick to abandon the attitude of
openmindedness and understanding adopted in his message to the
nation, an attitude that is unusual for him, and has reverted to his
true nature, menacing and vengeful toward Quebec.
My question is for the Minister of Intergovernmental Affairs.
Does the Prime Minister's attitude augur well for the day after the
referendum, when we already see him threatening not to respect the
result, the referendum verdict, showing his true colours as a
non-respecter of democracy, allowing the Quebec referendum act
to be violated with impunity, non-respecter of democracy that he
is?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, I believe that history speaks for itself and that our Prime
Minster has shown over his thirty years in politics that he is a
democrat. He has expressed his opinions clearly, expressed his
options clearly, and has never backtracked; he has never changed
political affiliations during his career; he continues to believe in the
values in which he believed in the past; he has always defended
both Quebec and Canada, and continues to do so.
15922
The arguments of the Bloc and the PQ will not do anything to
change reality. The reality is that our Prime Minister has defended
both Quebec and Canada well, and will continue to do so. A no
is a no, one which will again work in favour of Quebecers, and
Quebecers will come to see that it is in their interests to continue
to make the reforms and changes they want within the federation,
as they did during the first quiet revolution.
(1125)
Mr. Gilles Duceppe (Laurier-Sainte-Marie, BQ): Mr.
Speaker, the minister has said two things that are true. First, the
Prime Minister has not changed his opinion; he continues to mock
Quebecers and to do things behind their backs. He has not changed.
Second, when the minister tells us there will be a second quiet
revolution, he is right and that revolution will start with a yes on
Monday.
I am asking the minister how Quebecers can trust the Prime
Minister when he engages in doubts and threats to force them to
choose Canada, rather than admitting that the days following the
yes vote have already been anticipated by the government, which
will have to adopt a responsible attitude toward the international
financial market for once, as Quebec certainly will?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Once
again, Mr. Speaker, I think that no one will accuse our Prime
Minister of not having made his thoughts clear, and of not having
changed his way of thinking as he went along.
But I have a quote to offer to you, Mr. Speaker, and it is as
follows:
[English]
``I am a Canadian. Who will doubt that? I was born a Canadian
and we have been Canadians since 1636 in Quebec. I am very
proud to be a Canadian.''
[Translation]
In English, the quote is: ``I am a Canadian. Who will doubt that?
I was born a Canadian and we have been Canadians since 1636 in
Quebec. I am very proud to be a Canadian''. Who said this? Lucien
Bouchard.
[English]
The Speaker: Once again I ask you not to refer to hon. members
by their names but by their titles in the House. I know you will
respect that.
* * *
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, throughout the Quebec referendum campaign Reformers
have made every effort to show Quebecers that Canada is open to
real change, change that is not founded in the exaggerated
promises of the separatists and change that is not found in symbolic
constitutional amendments.
We want a no vote on Monday to mean a mandate for a new
Confederation, a decentralization of power and the reform of
federal institutions. Reformers and provincial governments are
going to work for those changes. The tens of thousands of
Canadians who are going to Montreal will work for those changes.
On the eve of the Quebec vote, does the federal government have
anything more substantive and constructive to say on its agenda for
change, something that would persuade a soft sovereignist or a
discontented federalist to vote no on October 30?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, I think the Prime Minister has indicated on a number of
occasions this week that he is ready to continue to implement
change and to consider further change.
(1130 )
What he has said about the distinct society and the right of veto
are important announcements in terms of constitutional change.
What is as important is that a number of provinces, including
Newfoundland, have now passed resolutions on distinct society to
indicate their respect for the province of Quebec and their desire
that they continue to work in a strong and united Canada.
In terms of non-constitutional change, which is as important, we
have indicated in the budget that we are ready to revise programs
and jurisdictions in order to let the level of government which is
most efficient do the work. We intend to continue in that direction.
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, I thought the minister might have said that one of the most
important changes the government could initiate the morning after
a no vote would be to start real reform of this institution, the House
of Commons.
Canadians inside and outside Quebec want their priorities and
their concerns to be better represented in the Chamber. That can be
achieved through a simple government commitment to freer voting
in the House and the exercise of less party discipline by the
governing party. Are these the sort of practical and positive
changes the government would be willing to vigorously pursue
after a no vote on October 30?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, I agree with the leader of the third party that we have to
increase the amount of change we are making in this country.
15923
I remind him again that we did program review and the budget
downsized the government by 20 per cent. We started to reform
the various programs in order to make the federal government
more efficient. We indicated very clearly that we want to change
and we want to listen to what Canadians tell us.
In terms of the House, I only have to indicate the reforms which
have taken place to reduce its costs and increase its efficiency. We
hope to continue in that direction.
Mr. Preston Manning (Calgary Southwest, Ref.): Mr.
Speaker, the most compelling reason for making changes in the
Chamber have been provided by the Quebec referendum debate
itself.
Here we have a debate on the future of federalism and the
country itself, but where has it occurred? Not directly, not
forcefully, not thoroughly on the floor of the Chamber, but
everywhere else. While the number one priority of the agenda of
the people has been the future of their country, formal debate in the
Chamber has focused on manganese as an additive to gasoline and
the national horse act. That is why the House must change if the
federal government is ever to lead change in the country.
Is the government open to changes in this institution so that the
agenda of the people and the country becomes the agenda of the
House?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, the debate about the referendum has taken place mostly in
Quebec because it is a Quebec referendum.
I certainly agree with the leader of the third party that all
Canadians feel personally involved. I am especially happy to see
that desire for involvement has finally been met by the huge rally
which is presently taking place in Montreal. It shows that all
Canadians from every part of the country consider that the choice
being made in Quebec is the choice of their own country. That
choice affects them personally and is one in which they want to
have a voice.
I am proud so many people have found it possible to go to
Montreal. They are expressing not only their love for Quebec and
their desire to stay together but also their view that Quebecers and
the rest of the Canadian population will be able to go through
problems in the future much better if they stand together, which is
what we hope will happen, than if they divide.
[Translation]
Mr. René Laurin (Joliette, BQ): Mr. Speaker, the Minister of
Intergovernmental Affairs earlier quoted Lucien Bouchard as
saying he was proud to be a Canadian. He neglected, however, to
add that this statement was made before Meech Lake, that is,
before the hon. Jean Chrétien's fancy tactics to sabotage the accord.
Some hon. members: Oh, oh.
Mr. Laurin: The hon. Prime Minister's, pardon me, Mr.
Speaker.
(1135)
The Speaker: Thank you, my dear colleague. You will address
our colleagues by their proper and acceptable title here in the
House.
Mr. Laurin: Mr. Speaker, I am sorry.
The director general of elections for Quebec, Pierre F. Côté,
criticized those offering paid holidays or lower priced tickets for
demonstrations in connection with the referendum debate.
According to him, it is making a mockery of the Referendum Act,
it is a real expression of contempt. He went on to say that this sort
of behaviour encourages civil disobedience.
How could the federal government itself contravene the Quebec
Referendum Act by allowing subtle arrangements to be made for
its employees to be away from work in order to go to a
demonstration in Montreal without loss of salary?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, first, I will deal with part of the hon. member's opening
remarks, when he talked about the statement by the Leader of the
Opposition, which was made in 1988, that is, well after the start of
the Meech Lake accord debate.
Here is a quote that indicates the transparency of his statements
now. When Mr. Bouchard, when the Leader of the Opposition,
pardon me, spoke on Wednesday, he spoke in French and English.
In French, he said: ``Alliances-thanks but no thanks''. A total
refusal. In English, he said: ``I am deeply committed to this
partnership''. So, once again, when opening remarks are used to
deliver messages, they should not be based on the misleading
appearances created.
As regards the rally currently going on in Montreal, we must
remember that Canadians and Quebecers are equally proud of
demonstrating their patriotism in Montreal and are doing so on
their own initiative. The federal government did not organize the
gathering. It was born of a desire by Canadians, inside and outside
Quebec, to express their pride in Canada, and the federal govern-
15924
ment is not paying their way. On the contrary, a Treasury Board
directive provides that, if they go, they must take leave to do so.
Mr. René Laurin (Joliette, BQ): Mr. Speaker, the alliances the
hon. Leader of the Opposition was talking about were the alliances
René Lévesque had had with the other provincial ministers before
the night of the long knives. This is the sort of alliance the Leader
of the Opposition was alluding to.
How does the minister explain that federal government
managers were informed by telephone that they should allow their
employees to go to Montreal after they signed an insurance form.
Even this leave is paid by the government.
[English]
Hon. Arthur C. Eggleton (President of the Treasury Board
and Minister responsible for Infrastructure, Lib.): Mr. Speaker,
the federal government is operating today. Offices are open from
coast to coast. In accordance with common practice which has
existed for time and is in the collective agreements, if employees
want a day off, they can ask for a day off.
Mr. Duceppe: All together, all at the same time?
Mr. Eggleton: Yes, they can take it as a vacation day. They can
take a vacation day if they want. They can do it today, on Monday,
or any other time of the year, providing they get the permission of
their manager. In each case it is a personal choice. Nobody is being
forced to do anything.
A lot of people who work in the public service feel strongly
about the country and want to be part of today's rally in Montreal.
They are doing it all in accordance with the rules, practices and
collective agreements of the federal government.
* * *
Mrs. Sharon Hayes (Port Moody-Coquitlam, Ref.): Mr.
Speaker, my question is for the Minister of Health.
Improving our medicare system is on the agenda of all
Canadians. Reformers have proposed a series of constructive
alternatives to solve the problems with our health care system for
all Canadians. What changes are the minister and the government
considering in the field of health care to make Canadians, including
Quebecers, feel more at home in this Confederation?
(1140)
Hon. Diane Marleau (Minister of Health, Lib.): Mr. Speaker,
a lot of work is ongoing with the federal government in
co-operation with the provincial ministers of health and their
officials.
One which is ongoing is the work on the vision for the future of
the health care system in Canada. Many actions are being
contemplated. We are very optimistic that we can continue to
deliver first class health care in Canada and that we can make that
health care equally accessible to all residents.
Even people who live in Quebec appreciate our medicare
system. They too are concerned that rapid changes would decrease
their ability to access equitably a health care system when they
need it. The government is committed to ensuring equitable access
for everyone.
Mrs. Sharon Hayes (Port Moody-Coquitlam, Ref.): Mr.
Speaker, like Reformers, Canadians affirm the value of medicare.
We desire medicare to be a core set of national standards. We desire
a system that is publicly funded and universally accessible,
regardless of one's ability to pay, but that system must make room
for choice to be sustainable. Is the minister open to this kind of
change?
Hon. Diane Marleau (Minister of Health, Lib.): Mr. Speaker,
we are open to any kind of change that will make our health care
system better.
We are committed to equitable access, access based on the need
of the individual person and not on his or her ability to pay. That is
one of the essential cornerstones of medicare in Canada. We
believe it is that particular form of medicare which makes Canada
the very best country in which to live.
* * *
[
Translation]
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, my
question is for the Minister of Intergovernmental Affairs.
The Minister of Fisheries and Oceans has launched an operation
to bring thousands of federalists from across Canada to Montreal.
The government is even urging its employees to go there to put
pressure on Quebecers under the pretence that they suddenly love
them.
Does the minister not feel that the best way to show Quebecers
they are loved would be above all to respect their laws, starting
with the referendum act?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, once again, we did not organize the rally being held in
Montreal. This spontaneous rally shows that Canadians from every
region in the country are concerned about what is happening in
Quebec and want to show their solidarity.
I am proud to belong to a country where all parties are so
concerned by the situation in Quebec that they are willing to make
an effort to travel to Montreal and to clearly express their feelings
15925
toward Canada and Quebecers. Quebecers who, like us, are
federalists and want to remain part of this country feel that other
Canadians are expressing clearly the feelings we have always
believed in, that is to say, they are supportive of Quebec, they are
with us, and they want the No side to win on Monday so that our
nation can continue to help and support its citizens.
Mrs. Pierrette Venne (Saint-Hubert, BQ): Mr. Speaker, what
better way is there for the federal government and the rest of
Canada to show their commitment to Quebecers than to respect the
democratic process, thus allowing Quebecers to make a decision on
their future without any interference?
(1145)
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, since the only people the official opposition believes are
those who share their views, I will point out that, in an interview he
gave at Magnan tavern this week, the Leader of the Official
Opposition stated very clearly that he agreed that people from the
rest of Canada could come to Montreal because, as he said, they
will be affected by the referendum result.
For once, the leader of the Bloc Quebecois is right, and he
expressed this pride in being Canadian he had asserted so clearly in
1988. We are proud to belong to a country, a nation that is willing
to give its more vulnerable parts a helping hand as a sign of
friendship and solidarity.
* * *
[
English]
Mr. Paul E. Forseth (New Westminster-Burnaby, Ref.): Mr.
Speaker, my question is for the Minister of the Environment.
On Monday and Tuesday the minister met with provincial
counterparts in Whitehorse. The Canadian Council of Ministers of
Environment has created a framework agreement to harmonize the
provinces' respective roles. Canadians have a deep desire to see
real co-operation.
Following the Whitehorse discussions, can the government tell
the House what we can expect to see in respect of the
environmental harmonization process being put into place with the
provinces?
Hon. Diane Marleau (Minister of Health, Lib.): Mr. Speaker, I
am pleased to report that my colleague, the Minister of the
Environment, together with provincial and territorial
environmental ministers, agreed to release a draft environmental
framework. This framework has been released for public
discussion.
Hearing the views of Canadians on whether this draft
accomplishes our shared objective is very important in terms of a
consistent high level of environmental protection.
Mr. Paul E. Forseth (New Westminster-Burnaby, Ref.): Mr.
Speaker, clearly there is a need for a new confederation, a balanced
federation of provinces in Canada that the Minister of Environment
should no longer resist.
The process of environmental harmonization has been going on
for two years. Can the minister tell the House what the spectrum of
changes the government is prepared to make to produce a genuine
harmonious front to protect the environment?
Hon. Diane Marleau (Minister of Health, Lib.): Mr. Speaker,
while there are often points of discussion, the environment
ministers, for example, agreed unanimously to look at automobile
emissions and regulations for cleaner gasoline. The federal
government is committed to acting on these initiatives.
Meanwhile, the provincial ministers of the environment are also
free to look at taking the actions necessary to protect the air that the
people in their provinces breathe.
* * *
[
Translation]
Mr. André Caron (Jonquière, BQ): Mr. Speaker, my question
is for the Minister of Human Resources Development. Yesterday,
the CNTU revealed that the HRD minister's bill on UI reform does
exist. And its provisions are identical to what has been leaked from
various sources since June. The draft bill is dated October 10, 1995.
Will the minister admit that the bill on UI cuts is indeed ready, as
evidenced by the existence of this document, and that its tabling is
being delayed by the government to hide these cuts from Quebecers
until after the referendum?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, we have been working on reforming the UI program, and
in fact the social security system as a whole, for the past two years.
We never hid the fact that we were putting our fiscal house in order
and reviewing various social policies.
Regarding unemployment insurance, we announced in the last
budget exactly what our plans were, and the Prime Minister stated
in this House that a bill would be produced by the end of the year.
Cabinet has not approved, passed or even seen the bill, and the
document referred to may well be one of the many versions of the
bill that could eventually be submitted to cabinet. This is a normal
15926
process, one that does not involve cabinet for the time being and
that must follow its course.
(1150)
Mr. André Caron (Jonquière, BQ): Mr. Speaker, we are
pleased to hear the minister admit that the bill does exist.
Will the minister try to deny the obvious or will he admit that his
bill will reduce UI benefits, exclude thousands of young people and
women from the system, and put in place a two tiered system for
seasonal workers? What is keeping the minister from admitting the
truth? The imminence of the Quebec referendum?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, once again, the opposition is twisting my words. I said
``may well be'' because I do not know if the bill the hon. member is
referring to even exists. However, I do know that it is only natural
for us, after promising to overhaul social programs, including
unemployment insurance, to be working on it.
No decision has been made so far. There is therefore nothing to
say on this issue. It is clear that, as announced in the budget, a
reform will take place to make the system more efficient and
reduce the burden of government on Canadian taxpayers, including
Quebec taxpayers. We urge the Parti Quebecois to put its fiscal
house in order as we did with ours in the budget we tabled in
February.
* * *
[
English]
Mr. Sarkis Assadourian (Don Valley North, Lib.): Mr.
Speaker, my question is for the Minister of Foreign Affairs.
On Wednesday President Bill Clinton stated that a strong and a
united Canada has been a powerful and loyal ally to the United
States and a model for the world on how people from different
cultures can live in peace and harmony.
Would the Minister of Foreign Affairs elaborate on the
president's statement? Also, would he address the comment made
in the Wall Street Journal regarding the negative effect that a
possible yes vote in Monday's Quebec referendum might have on
NAFTA and our bilateral relationship with the U.S.?
Hon. David M. Collenette (Minister of National Defence and
Minister of Veterans Affairs, Lib.): Mr. Speaker, I welcome the
question.
[Translation]
President Clinton clearly said that Monday's vote is a domestic
issue. It is for Canadians to decide. However, the president also
said that his country hopes to maintain relations with a strong and
united Canada. I have no doubt that, after Monday's vote, Canada
will remain united and strong.
As for the other part of the question, I fully agree with the
opinion expressed by the hon. member.
[English]
The question of trading arrangements in the context of
sovereignty will be the one described by the hon. member.
* * *
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr. Speaker,
earlier this week government lawyers were chastened by Justice
Létourneau of the Somalia inquiry. He was concerned that a letter
from crown counsel would put a chill over the inquiry.
The government has tried to gag members of the forces before.
Now it is trying to filter both the information and the sources of
information.
Why are both the justice department and the Department of
National Defence working to intimidate soldiers and keep them
from testifying before this important commission? Why?
Hon. David M. Collenette (Minister of National Defence and
Minister of Veterans Affairs, Lib.): Mr. Speaker, the hon.
member knows full well there is no truth to that assertion.
The government has nothing to hide with respect to the
engagement of Canadian forces personnel to Somalia. It was this
government in opposition that had asked the former government to
set up a board of inquiry. That was long before the election. We did
that once the court martials were dealt with.
However, what happened this week is rather unfortunate since
the tone of a letter sent by a Department of Justice official has
given the wrong impression to the various counsel. The chairman
of the commission has called for the various counsel to discuss this
matter and to make sure the impression the hon. member has
reached that somehow we want people not to come forward is
dispelled.
The lawyers for the respective individuals before the
commission and the commission lawyers themselves are working
this matter out.
Mr. Bob Ringma (Nanaimo-Cowichan, Ref.): Mr. Speaker,
indeed I would really love to see that impression dispelled. In a
hierarchical society such as the military, even subtle signals from
the top permeate down and can cause an undesired effect below. In
15927
this case it is telling the troops to keep quiet. The commissioners
are doing their best to send the soldiers the signal that the inquiry is
open, but the assurances must come from the very top. The very top
in this case is the Minister of National Defence.
(1155)
Will the minister put himself in the position of our uniformed
troops and recognize that he has a responsibility to reassure the
military personally that all is fine, they can speak as they will.
Hon. David M. Collenette (Minister of National Defence and
Minister of Veterans Affairs, Lib.): Mr. Speaker, no one has ever
accused me of being unduly subtle. Every member of the Canadian
Armed Forces has an obligation to come forward to that
commission. The government will not tolerate any intimidation
toward any of those people.
I hope the hon. member understands the message. Certainly the
members of the armed forces understand it.
* * *
[
Translation]
Mrs. Pauline Picard (Drummond, BQ): Mr. Speaker, my
question is for the Minister of Human Resources Development.
Yesterday, the minister refused to admit that a document from
his department entitled ``Serving Canada's Seniors'' does indeed
show the direction his government intends to follow in
restructuring old age security programs.
The government has been saying since its budget of February
1994 that it would table a document unveiling its new approach.
How can the government justify that, after reviewing Canada's
old age security program for over 18 months, the human resources
minister still claims that he has not yet made a decision on the new
direction to be taken? Mr. Speaker, it has been 18 months.
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, I believe the answer sought by the hon. member is
included in a statement made last night by the Prime Minister to
Mr. Mongrain, regarding the issue of pensions. The Prime Minister
said: ``What I do know is that, if people vote no on Monday, all
those who receive pension cheques will still get the same cheque.
Some tried to make me say that I was going to cut pension cheques.
I clearly said in the House of Commons that there will be no
statement in November to the effect that the government is cutting
pensions, and that the February budget will include no changes to
old age pensions. I cannot not be any clearer than that''.
This quote shows that we looked at the issue of old age pensions
and that we arrived-as the Prime Minister clearly said-at a
conclusion which is valid now and for next February.
* * *
Mrs. Jan Brown (Calgary Southeast, Ref.): Mr. Speaker, as
both Reform members and Canadians, we sincerely believe in a
strong and united country now and in the future. I am confident that
the Liberal government shares our vision of decentralized powers.
My question is for the Minister of Human Resources
Development. What changes in the powers and responsibilities
attached to social programs will he offer the provinces to show
them that a no vote is not a vote for the status quo?
Hon. Marcel Massé (President of the Queen's Privy Council
for Canada, Minister of Intergovernmental Affairs and
Minister responsible for Public Service Renewal, Lib.): Mr.
Speaker, I think that, in the past two years, our government has
indicated very clearly that it is upholding the Liberal tradition of
supporting the most vulnerable members of our society. We are
forced to do so in a context of financial and economic constraint. I
feel that we have assumed our responsibilities within a responsible
fiscal framework by stating in the February 1995 budget that we
would continue to help the neediest in our society.
There is no question that, in order to help the most vulnerable in
our society, we must overhaul our social programs to make them
more effective, efficient and productive, and that is what we are
doing. The changes under way to improve government will also
help us convince Canadians, including Quebecers, that the
Government of Canada looks after the interests of all its citizens,
including Quebecers, and that it is in their interest to vote No on
Monday.
* * *
(1200)
Mrs. Pierrette Ringuette-Maltais (Madawaska-Victoria,
Lib.): Mr. Speaker, could the Minister of Industry briefly mention
the main initiatives he has undertaken, since the announcement,
last February, of the establishment of the Canadian tourism
commission, and could he also give us some details on the impact
that these initiatives have, and will have, on the tourism industry
and on the Canadian economy?
15928
Hon. Jon Gerrard (Secretary of State (Science, Research and
Development), Lib.): Mr. Speaker, the Canadian tourism
commission has already spent $50 million, while its partners have
invested $35 million.
This year, revenues related to tourism increased by 18 per cent in
our country. Clearly, a united Canada, in which the provinces and
the federal government co-operate, is the best thing for Canadian
tourism. It is definitely an argument in favour of a no vote on
Monday, so that we can indeed have a united country and the best
possible environment for tourism.
_____________________________________________
15928
ROUTINE PROCEEDINGS
[
Translation]
Hon. Alfonso Gagliano (Secretary of State (Parliamentary
Affairs) and Deputy Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, pursuant to Standing Order 36(8), I
have the honour to table, in both official languages, the
government's response to six petitions.
* * *
Hon. Charles Caccia (Davenport, Lib.): Mr. Speaker, I have
the honour to present the report of the Canadian delegation to the
Committee on economic affairs and development of the Council of
Europe, regarding the activities of the organization for economic
co-operation and development, and of the European bank for
reconstruction and development, which held meetings in Paris and
in Strasbourg, in June 1995.
I also have a report of the Canadian delegation to the
Parliamentary assembly of the Council of Europe, regarding the
expanded debate on the activities of the organization for economic
co-operation and development, held in Strasbourg, on September
27 and 28, 1995.
[English]
Mr. George Proud (Hillsborough, Lib.): Mr. Speaker, pursuant
to Standing Order 34(1), I have the honour to present to the House
the ninth report of the Canadian delegation of the Canadian NATO
Parliamentary Association from the seminar of the working group
on northern security issues of the North Atlantic Assembly held in
Copenhagen, Denmark, on September 25, 26 and 27, 1995.
Mr. Ron Fewchuk (Selkirk-Red River, Lib.): Mr. Speaker, I
have the honour to present, in both official languages, the 21st
report of the Standing Committee on Finance on Bill C-102, an act
to amend the Customs Act and the customs tariff and to make
related and constitutional amendments to other acts.
* * *
[
Translation]
Hon. Alfonso Gagliano (Secretary of State (Parliamentary
Affairs) and Deputy Leader of the Government in the House of
Commons, Lib.): Mr. Speaker, I ask that all questions be allowed
to stand.
The Deputy Speaker: Is that agreed?
Some hon. members: Agreed.
_____________________________________________
15928
GOVERNMENT ORDERS
[
Translation]
The House resumed consideration of the motion.
The Deputy Speaker: The Parliamentary Secretary to the
President of the Treasury Board has the floor. He has six minutes
remaining.
Mr. Ronald J. Duhamel (Parliamentary Secretary to
President of the Treasury Board, Lib.): Mr. Speaker, I will repeat
the key points I made earlier and continue my speech. I said that the
Small Business Loans Act was part of a global strategy by the
government to boost the growth of such business, and more
particularly its access to financing and capital. I also said we did a
lot of consulting, before we went ahead. I said, as well, that this
project would be self-supporting, and that the government's action
was in keeping with two of its policies: to reduce subsidies to
business and to reduce the deficit and the debt.
(1205)
I also indicated that the new program would better suit
businesses with a greater need for access to capital, because,
according to our research, 30 per cent to 40 per cent of businesses
are getting from the existing program capital which could be used
elsewhere. I added that I had talked to many business men and
women in my riding of St. Boniface, who told me this was a step
forward.
15929
I concluded the first part of my speech by saying that this was
the sort of government initiative that reached across the entire
country-an example of what we can accomplish together.
Now for the second part. Speaking of what we can accomplish
together, let us have a look at what we have already done in
Canada. We all know that Canadians are respected around the
world, for a number of reasons. We all know that we are the best
country on the whole planet, and we are not the ones to say so.
Organizations are saying so. We all know that people in many
countries, in the vast majority of countries, would like to join us.
We are a pretty formidable economic power, since we rank
seventh based on our gross domestic product. We know that the
government is evolving, and even when people do not have the
same philosophy of government, I think they should realize that
governments and government institutions evolve and change. And
that is exactly what this government has done for the past two
years. To put it another way, it has embarked on a review of the
federal government's mandate and that of other levels of
government in order to eliminate duplication and overlap.
It has done so while respecting the authority of other levels of
government and at the same time reducing government
expenditures. it has taken steps to ensure that this initiative will be
able to continue, because we still have some way to go.
Consider what we have done together so far. If we look at the
past two years, we see that more than 600,000 jobs have been
created. That is a lot, but it is not enough. We must create more
jobs. We need a climate that is conducive to job creation. Our
objective with respect to the debt and the deficit is a case in point.
We wanted to ensure that the deficit would not be in excess of 3 per
cent of the gross domestic product. We think we can achieve that.
Interest rates are among the lowest we have seen for a long time.
The inflation rate is much lower than it was. Consider our growth
figures. Economic growth has increased by 33 per cent. Exports
have gone up by 5.2 per cent; investment in materiel and
equipment, for instance, has increased 11.6 per cent; deliveries in
the manufacturing sector have gone up 10.9 per cent.
Quite frankly, we have done remarkably well in a pretty difficult
situation. Our concern, and this includes both government
members and the members of the opposition, should be the results
of the vote on October 30. Because we must continue to do well.
(1210)
These successes improve Canadians' quality of life. These
successes can assure us of growth, of keeping our number one
status, if you will, as the best country in the world. I have a few
quotations here I wanted to share on the successes we have
enjoyed, the successes others have applauded us for.
[English]
For example, Sherry Cooper, chief economist at Nesbitt Burns,
responded to the drop in September's unemployment rate to 9.2 per
cent by saying:
Today's buoyant job report is yet another arrow in the quiver of economic
recovery.
That was on the CP wire on October 6.
Andrew Pyle, Path International senior economist, responding to
the drop in September's unemployment rate to 9.2 per cent said:
One would expect in October barring any surprises we should see even better job
growth.
Robert Fairholm, chief economist with DRI/McGraw-Hill, in
reacting to the Statistics Canada report showing that the country's
GDP increased by 0.1 per cent in July, said:
Pull out a microscope and you'll see growth in July. But it's an improvement and
that's encouraging for the markets.
Gordon Thiessen, Governor of the Bank of Canada, said:
I know the economy is not booming along, but it is performing in such a sound
way, such a basically sturdy way.
I could go on. I have another dozen quotes from influential,
knowledgeable, insightful people that show the country is working.
As has been said by the Prime Minister on many occasions and by
many colleagues, it is not perfect but it is the best country in the
world. The commitment of all of us, whatever our political
preferences, political values or political ideologies, ought to be to
make this country, which is the best, better still.
[Translation]
For this reason I hope from the bottom of my heart that the
Quebecers who see all of those Canadians rallied together in
Montreal will listen to their heartbeats, listen to what they have to
say. Some would like to have us believe this is not real, not
spontaneous. It is real, it is spontaneous.
There is a deep affection for Quebec, for Quebec men, and for
Quebec women, and that affection is being manifested today in
Montreal. If on October 30 we can have a no vote to separation, to
the breakup of this country, we are going to continue to improve the
quality of life of all Canadians, whether they live in Quebec or in
other parts of the country. This is why I want a no vote, and I hope
from the bottom of my heart that is exactly what the answer will be.
No to separation, no to breakup, so that we can continue to
progress.
[English]
Mrs. Beryl Gaffney (Nepean, Lib.): Mr. Speaker, I am very
pleased to speak to Bill C-99.
15930
Since taking office two years ago the government has created
an economy of employment that has grown. Good fiscal
management is the foundation of the government's jobs in a
growth agenda. The 1995 budget marks a decisive turning point,
making $7 in cuts to government spending for every new $1 of
tax revenue raised. The deficit is being reduced, as planned, and
the red book target of 3 per cent of GDP by 1996-97 will be met.
Small business has been the engine of job creation in Canada in
the last decade. To fulfil its promise to help them compete, the
government has cut red tape and has increased access to
government services, financing new technologies and export
markets.
Our trade missions to China and Latin American led by the
Prime Minister brought home $10 billion in trade deals for
Canadian businesses and positive jobs for Canadians. Barriers to
trade within Canada are dropping, thanks to the agreement on
interprovincial trade. These efforts help Canadian businesses find
markets for their products and services at home and abroad.
Changes to the Small Business Loans Act is one of the most
significant efforts of the government toward a strong economy and
creating opportunity for growth. The changes made by Bill C-99
will enable the completion of the process of modernization and
improvement that has brought the SBLA program to full cost
recovery. This renewal will relieve the financial burden of the
program on Canadian taxpayers while enabling the SBLA to
continue to provide its benefits to small business.
(1215 )
Over the years the program carried out under the Small Business
Loans Act has been very successful. The SBLA was passed in
1961, and since then more than 420,000 SBLA loans, totalling over
$15.5 billion, have been made to small business.
The benefits of SBLA are widely recognized. It provides needed
help to small businesses, which are so important to the Canadian
economy. The program is open and simple to administer. It is
delivered by private sector lenders who have great expertise in the
granting of credit and the monitoring of loans.
The program's success both as an economic development tool
and as an example of public sector and private sector co-operation
has inspired similar guarantee programs at both the federal and
provincial levels in Canada.
In recent years the SBLA program has been running on an annual
government cost of $20 million to $30 million. However, following
a significant program change effective April 1, 1993 the annual
activity increased from $500 million to $2.5 billion in 1993-94 and
to over $4 billion in 1994-95. Assuming a continuation of the
historical loss rate, this meant that the annual program costs would
increase by over $100 million. Clearly this was a threat to the
sustainability of the program.
Both the potential costs of the program and the government's
overall need for deficit control required that the program be
brought to full cost recovery. Consequently the government
initiated a review of the program. Extensive consultations with
major stakeholders representing both borrowers and lenders were
held in October and November 1994. Recommendations were also
provided by the industry committee and the small business working
committee of the House of Commons. The views of the federal
Liberal caucus task force on small business were taken into account
as well.
The major recommendation of all those consulted was
unanimous: the government should act quickly to put the SBLA
program on a full cost recovery basis. We have responded.
Two major changes were made through regulatory amendments
that came into effect on April 1, 1995. First, a new 1.25 per cent
annual fee was levied on each lender's average outstanding balance
of SBLA loans made after March 31, 1995. Second, the maximum
rate a lender can charge under the SBLA was increased by 1.25 per
cent to the prime interest rate plus 3 per cent for floating rate loans
and to the residential mortgage rate plus 3 per cent for fixed rate
loans.
These changes have put the SBLA program on a sustainable cost
recovery basis for all loans made after March 31, 1995. Now Bill
C-99 will continue the process of renewal by putting in place
additional changes to the SBLA. It will grant an authority
respecting the release of security, including personal guarantees
taken by lenders for the repayment of SBLA loans. It will grant an
authority to make regulations for the establishment of a claims
processing fee.
Bill C-99 will improve government guaranteed coverage for low
volume lenders. It will enable the SBLA program to respond more
quickly in future to changing economic and program circumstances
by allowing the guaranteed percentage to be adjusted by regulation,
and it will potentially accelerate an already legislated decrease in
the percentage of an SBLA loan that is guaranteed by the
government from 90 per cent to 85 per cent.
The changes that will be brought about by Bill C-99 will
complete the transformation process that has made the SBLA
program sustainable. Putting the program on a full cost recovery
basis has caused the cost of loans made under the SBLA to increase
slightly. However, the federal government's consultations with all
parties recognize the need for the program to be self-sustaining.
The changes we are making are entirely in keeping with the need
to reduce subsidies to business and the overall need to get the
deficit under control. These changes actually mean the SBLA will
15931
be better positioned to target its loans toward those small
businesses that really need its help.
(1220)
At present, an estimated 30 per cent to 40 per cent of SBLA
loans go to enterprises that are able to take advantage of normal
business financing. Without the subsidy implicit in the present
interest rate, the higher cost of SBLA loans will mean that these
financially strong businesses will probably now switch to lower
cost commercial financing.
Even the most successful programs must be kept relevant and
responsive and must be run in an effective manner, especially in
these days of deficit fighting and limited government resources.
The increase in government costs resulting from the surge increase
in SBLA activity was a challenge that had to be met if the SBLA
was to continue to serve the needs of small business. That
challenge was met, and now the changes we are proposing will
further enhance the administration of the SBLA program.
I bring to the attention of the businesses and people in Quebec
who have been part of this program and who have participated in it
in an effort to better not only the economy of Quebec but also the
economy of Canada that this is very beneficial to the province of
Quebec. Obviously we hope that all those businesses, when it
comes to voting on Monday in the referendum, will recognize the
importance of staying within Canada and vote with the rest of
Canadians with a resounding no.
Mr. Walt Lastewka (St. Catharines, Lib.): Mr. Speaker, it is
appropriate that we discuss Bill C-99, an act to amend the Small
Business Loans Act, at this time because this week is small
business week.
We know that small business is the lifeblood of our economy.
Statistics tell us that 99 per cent of businesses in Canada have
fewer than 100 employees. Because of their numbers in small
businesses they tend to drive the economy. Growth in small
business means economic growth, but the bottom line is that the
government does not create jobs, businesses create jobs. Small
businesses create almost 80 per cent of new jobs in Canada.
Government plays a very key role. It creates the climate and
builds the framework for economic growth. The Liberal
government has taken important steps to create the right climate.
We have reduced regulation. We have eliminated 250 regulations
already and amended another 300-plus. The process continues to
eliminate paperwork and regulations and streamline the cost of
doing business.
We have improved the access for small businesses to technology
through programs like the technology partnership program.
We have reduced the paper burden and red tape that small
businesses struggle with. Ten business service centres have been
opened up across Canada from coast to coast, which provide
24-hour a day services.
We have just announced the business networks initiative, which
brings businesses together. Networks and working together with
people makes things happen and makes business grow. We have
introduced a single window business number at Revenue Canada so
businesses can make one call instead of four.
We have introduced new legislation like Bill C-102, which
creates the equivalent of free trade zones in Canada and allows
Canadian businesses like those close to the U.S. border in my
riding to compete against the U.S. companies head on. This bill
will also assist businesses throughout Canada, wherever they may
be.
We have the team Canada trade strategy aimed at helping
businesses export. SMEs produce only 10 per cent of our exports,
and only about 4 per cent of the small business sector exports. We
need to improve this record. We need to make continuous
improvements in assisting small and medium size entrepreneurs to
export. This is where government can play a key role.
As a member of Parliament I have been able to work with a
committee in the St. Catharines-Niagara area to help small
business understand what it takes to export and how really easy it is
if you know the system. By teaching this system the committee is
trying to assist some 350 small exporting companies in my area.
(1225)
This leads us to a problem, because we know it takes money for
small business to expand. Business needs access to capital. One of
the largest problems facing small business people and
entrepreneurs is financing. Here too government has played a
major role. The industry committee of the House has studied this
issue extensively. It was very interesting to see the participation of
all parties, the Bloc, Reform and the government members,
working together on improving the system within the industry
committee, such that we could make more improvements for all
businesses no matter where they are located in Canada.
Banks have responded to introduce codes of conduct and an
alternate dispute resolution system and some have ombudsmen.
Maybe there has been some picking on the banks and maybe it was
required, but they are also working with many of the small
businesses and many of the community committees to really get at
making things happen.
Government also plays a direct role in lending to small
businesses. We do this through the Business Development Bank
and the Business Development Corporation. We lend through the
Small Business Loans Act.
15932
The Small Business Loans Act creates an economic
development tool for the government. The act was first passed in
1961. Since that time more than 420,000 loans have been made,
totalling over $15.5 billion.
Recently the SBLA has been running at a cost of $20 million to
$30 million per year. This is a cost the government incurs; in other
words, it is a cost to taxpayers. As lending has increased over the
last couple of years, we are now looking at a loss of over $100
million annually. Over five years the program will be tripled, from
$4 billion to $12 billion, and then we are looking at a potential
liability of $12 billion plus. That represents a problem for the
government and for the taxpayer. That is why the government
initiated a review last year and consulted with borrowers and
lenders from across the country and the various agencies and
institutions involved.
For a government that is tackling the deficit and the debt, we
know that we cannot sustain this SBLA program on taxpayers'
backs forever. The government has had to reduce its spending. We
have cut overall expenditures by 19 per cent, the public service by
14 per cent, transportation subsidies across this land by some 97
per cent, business subsidies by 60 per cent. This is only a small
sample of our cuts to reduce the deficit.
The important item I would like to bring forward to the House is
that while we have been doing this cutting, we have done it in a
progressive manner. We have done it by getting input from all the
people involved and understanding the facts that are required as we
go through these cuts.
Yes, we are making changes, and for the last number of weeks
changes seem to have really hit the House. We have been making
those changes a little at a time, not going from one extreme to the
other but making those continuous improvements that are so
important to industry.
The reason we have Bill C-99 before us today is to make the
small business loans program revenue neutral for the government
over time. When this legislation is implemented, we will be able to
recover the cost of the program and the burden will not be placed
only on taxpayers.
As has been mentioned, several actions have already been taken
as of April 1, 1995. There is a new 1.25 per cent annual fee levied
on lenders' average outstanding balance of loans made after March
31, 1995. The maximum rate a lender can charge increased by 1.25
per cent, the prime interest rate plus 3 per cent for floating rate
loans and for residential mortgages it is rate plus 3 per cent for
fixed rate loans. This means the program has been put on a cost
recovery basis for all loans made after March 31.
(1230)
Bill C-99 makes further changes to the Small Business Loans
Act. The amended act will grant authority respecting the release of
security, including personal guarantees taken by lenders for the
repayment of the SBLA loans. It will grant authority to make
regulations for the establishment of a claims processing fee. The
bill will also improve government guaranteed coverage for low
volume lenders.
The bill will enable the SBLA program to respond more quickly
in the future to changing economic and program circumstances by
allowing the guaranteed percentage to be adjusted by regulation, to
be adjusted as mentioned as the future unfolds. As things change
around the world, we are in the global economy and we will be able
to adjust and make those changes on an ongoing basis. As has been
said over and over, in this world nothing stands still; everything
changes slowly and continuously.
The amended act will potentially accelerate an already legislated
decrease in the percentage of an SBLA loan which is guaranteed by
the government from 90 per cent to 85 per cent.
The theme for small business week this year is: New Markets-Opportunities for Growth. The government wants to help small
businesses grow and expand. I have outlined the many ways in
which we are doing that. However, we are not doing a favour to
businesses if we hand them money while increasing the deficit
which thus reduces the strength and growth of our economy.
We are working to get the basics in place. We are providing
several sources of income to small businesses which have difficulty
attaining access to capital through other sources. We are improving
and refocusing these programs so they will better target those who
really need them.
Without the subsidy in the SBLA program's present interest rate
the higher cost of these loans will mean financially strong
businesses will switch to lower cost commercial financing. More
funding will be available to small businesses that really need the
programs. We will be doing this in a revenue neutral manner which
will not cost taxpayers extra dollars they do not have.
This is important legislation which builds on the government
agenda to help businesses succeed. We want a strong and vital
growing economy and we need businesses to grow to accomplish
that. This bill means financing will be available to help the small
business person and it will be provided without an additional cost
to taxpayers.
The government has put forward many programs to assist small
business. Community groups, of which I have one in my
community called the FMP group, are excited about the changes
this government is bringing forward to help small business.
15933
I urge all members in the House to join me in support of Bill
C-99, an act to amend the Small Business Loans Act, so that we
can work together across the country. We have shared across this
country and have made improvements across this country.
Likewise, I hope that when the people of Quebec, including
Quebec's business people, come forward on Monday they will
vote no in order to continue to share and make improvements in
this great country of ours.
Mrs. Jean Payne (St. John's West, Lib.): Mr. Speaker, I am
very pleased to add my voice to those of my colleagues today in
speaking on Bill C-99, an act to amend the Small Business Loans
Act.
As parliamentarians we are frequently called upon by our
constituents to assist in the creation of employment in order to
boost the economies of our ridings and subsequently the economy
of our country.
Often two very significant areas, increased employment and
minimal debt, are found to be in contrast with one another. Bill
C-99 will provide a vehicle whereby businesses have greater access
to capital which of course in turn creates more employment
resulting in a healthier economy.
(1235 )
In my riding of St. John's West, the community of Argentia was
struck about a year ago by the closure of the U.S. naval base. The
closure of that base caused the residents of the area a great deal of
distress. However, they did not roll over and die at the thought of
losing their jobs. Instead they decided to build on what had been
left on the base by the Americans.
With the very generous assistance of this government, they are
now slowly beginning to open a few new businesses. One of the
greatest setbacks to many of those new businesses is the inability to
obtain financing in order to keep the businesses going. They seem
to be having difficulties obtaining the required financing because
of the size of their businesses. This new act will be a major asset to
them.
Bill C-99 is a vehicle those people will be able to use hopefully
in the very near future so they can continue to keep their businesses
operating. This loans act is a part of the government's overall
strategy to provide a positive environment for the growth of small
business, especially with regard to accessing financial capital.
The SBLA came into effect in 1961. Its purpose was to continue
to increase the availability of loans for the establishment and
improvement of small business enterprises. Since then more than
420,000 loans totalling over $15 billion have been made to
businesses. For over 30 years the SBLA has been helping such
businesses obtain capital for improvements and expansion. This
government is committed to maintaining the basic nature of this
successful program.
The goal of the program is to assist small businesses in obtaining
fixed asset financing which is otherwise unobtainable because
businesses lack sufficient collateral, they are too new, or they are
not located in large growth areas such as central Canada. Of all
SBLA loans, 35 per cent go to start-ups and a further 20 per cent go
to businesses under three years old.
As I stated earlier, the SBLA is particularly significant in my
riding of St. John's West because it does provide funding for the
formation and stabilization of an economic foundation based on
small enterprise. The benefits are widely recognized. It helps small
businesses which are so important to the economy right across the
country. They are the foundation for economic strength and
stability. The future economy of our country has been built on
small business and it will continue to depend on them.
The cod fishery off the coast of Newfoundland has suffered a
destruction and now there is a moratorium. Alternate measures
must be found to promote the economy of that area. The SBLA
mandate provides for funding to be targeted toward small
businesses which are lacking collateral, which are not new and
which are not located in the large centralized or industrial areas of
Canada.
Newfoundland is a province with an abundance of culture, an
educated populace and an international accessibility through trade
due to its coastal location. Throughout my riding of St. John's
West, industry based resources are abundant. There are natural
harbours, forestry, and watershed management, to name a few.
Since April 1993 activity under the program has increased
dramatically. A potential program deficit of over $100 million
annually based on the 1994-95 activity levels was threatening the
sustainability of the SBLA. The proposed changes would decrease
the costs and increase the efficiency of the SBLA. The resulting
strengthening of the program will enable it to continue to provide
benefits to small businesses.
The proposed legislation was developed after extensive
consultation with lenders and borrowers alike. Recommendations
of the Standing Committee on Industry and the small business
working committee have also been addressed. The major
recommendation of all those consulted was unanimous: the
government should act quickly to put the SBLA program on a full
cost recovery basis, a move initiated by a regulatory change
effective April 1, 1995.
(1240 )
Bill C-99 moves to initiate full cost recovery. The regulatory
amendments of April 1 include a new 1.25 per cent annual fee
which is levied on each lender's average outstanding balance on
loans made after March 31, 1995. The second amendment states
that the maximum rate a lender can charge under the SBLA is
increased by 1.25 per cent to the prime interest rate plus 3 per cent
for floating rate loans, and to the residential mortgage rate plus 3
per cent for fixed rate loans. These changes have put the SBLA
15934
program on a sustainable cost recovery basis for all loans made
after March 31, 1995.
In addition to full cost recovery incentives, Bill C-99 provides
for improvements relating to borrowers and low volume lenders.
These changes are secondary to the major regulatory changes of
April 1, 1995 which introduced a new annual fee on lenders and an
increased maximum interest rate.
Bill C-99 will continue the process of renewal by putting in place
additional changes to the SBLA. It will permit the release of
security, including personal guarantees, taken by lenders for
repayment of the loans. It will also permit the establishment of a
claims processing fee by regulation. It will improve government
guarantees for coverage for low volume lenders, to improve
competition among lenders particularly in the smaller
communities, such as those in my riding.
Bill C-99 will permit the SBLA program in the future to respond
more quickly to changing economic and program circumstances by
allowing the guarantee percentage to be adjusted by regulation. It
will accelerate a previously legislated decrease in the percentage of
an SBLA loan which is guaranteed by the government from 90 per
cent to 85 per cent.
These changes are of particular importance to my riding of St.
John's West because of the emphasis on smaller communities.
In addition, new resiliency clauses which will be implemented
into the SBLA are tailored to help small business respond more
quickly to changing economic circumstances.
In summary, the changes incorporated into Bill C-99 will ensure
that the program will continue to be successful in assisting small
businesses in obtaining the financing which they so badly need for
expansion and the creation of jobs throughout the country.
Mr. Roger Gallaway (Sarnia-Lambton, Lib.): Mr. Speaker,
it is a pleasure to speak in support of Bill C-99, an act to amend the
Small Business Loans Act.
I could start out by stating the obvious, that we are reminded
daily that the future of jobs in Canada is to come from small
business. We are reminded daily that it is the fastest growing sector
with respect to job creation. In fact, it is that sector of our economy
where there is opportunity for work. I have been reminded three
times in the last six days of the importance of the small business
sector.
Last Saturday I met with the chamber of commerce in my riding.
In a brief which was submitted to me it was stated that there is
nothing that can replace a job created by a small enterprise. We all
agree with that.
On Wednesday night I was in the city of North York and had the
opportunity to attend a small business fair which took place at the
city hall. There was a large display by support agencies. There were
all types of computer consultants and business consultants. It is
important to note that the banks were also there in large numbers.
There are groups within the communities which are willing to
facilitate ongoing small business and are willing to work with
people who want to create small businesses.
Last evening in my riding of Sarnia-Lambton the board of
directors of Lambton College agreed to proceed with an innovative
international trade centre. I am quite pleased to say I have been
actively involved in this project. I started it with the college in
conjunction with my neighbour across the river in the United
States, Congressman David Bonior from the 10th congressional
district of the state of Michigan.
We are working together on both sides of the border to facilitate
small businesses in order that they can find markets on both sides
of the border. We want to work in partnership so we have linked
these two centres located at community colleges in Canada and in
the United States by modem. Now a Canadian small business
person can find a partner and can obtain the kind of information he
or she needs to enter the American marketplace.
(1245)
There are 40 million people living within an hour's drive of my
riding. That is 40 million. There are 80 million people within an
eight-hour drive. The marketplace is not just within Canada for
small business. Indeed, for many of us it is in the United States. I
am pleased to say that small businesses are awakening to this
marketplace.
I know of one small business operator in my riding who employs
17 people. He was able to increase his business by some 35 per cent
by working actively in the city of Port Huron in the state of
Michigan, 400 yards away from Canada.
The marketplace out there is huge. I know of another gentleman
who employs two other people making ice boats. His market is in
the area surrounding the city of Detroit on Lake St. Clair. He is able
to do that from Canada.
There is a huge marketplace out there for small business but
there are two areas of specific need that must be addressed to assist
small business people. First, small business needs access to capital.
That is stating the obvious. We must remember that job creation in
the private sector requires an investment. It can vary.
I am talking only about the private sector. In the high tech
business, the cost of creating a job, if I can put it in such blunt
terms, is $750,000. In other words, that corporation must, to add a
person to it, often invest up to $750,000.
15935
In manufacturing in a general sense that number is somewhere
between $750,000 and $1 million. That means a corporation must
have several million dollars of capital invested to employ people.
For those that are specialized the numbers increase even more.
I can speak firsthand of the petrochemical and refining industries
where the investment required of the corporation can be anywhere
from $1 million to $1.5 million.
Changes in the way large industry works are in fact changing that
ratio. Across North America we are undergoing a phenomenon
known as restructuring. Large corporations examine their
workforces and they tend to remove those who are not tied directly
to production so that the ratio of job to investment is increasing all
the time.
It is because of this that we have to look to small business where
we know jobs can be created when an entrepreneur invests
anywhere from $3,000 to $25,000. It is because of numbers like
those that tells us the future of the job market is in the small
business sector.
We all know also that access to funds is the number one obstacle
encountered by small business. The Small Business Loans Act is
there to support lenders and in turn help small business obtain debt
financing often otherwise inaccessible to them.
I state the obvious when I say that if one reads any number of
newspapers one will note there is, across this country, often
complaints of the lack of access to funds. Although this will not
remove every obstacle, it is working toward it.
It is important to realize that the Small Business Loans Act
program is delivered not by government agencies but by private
sector lenders. We know the Small Business Loans Act has been
around for some 34 years now and this bill simply reflects what the
realities of today are from a fiscal perspective.
Organizations such as the Canadian Federation of Independent
Business, which I should point out is a group which never is
hesitant to express its opinion, have supported this bill. That is an
important factor to point out. There is support for this bill not just
in the House but where it really counts, within the business
community and especially within the small business community, a
great number of whose representatives are members of the
Canadian Federation of Independent Business.
(1250)
As a result it is important that the House support Bill C-99. It
has, since 1961, resulted in a program which I suggest has been
successful. We are told that there have been some $16 billion lent
by banks under the Small Business Loans Act since 1961. In many
people's opinions it is not enough when one considers that in other
economies around the world much greater numbers are spent on an
annual basis on small business expansion. However, it is important
that this tool be there. It is there as an economic tool and it is there
as an example of public sector and private sector co-operation and
partnership. That is becoming in government at all levels more and
more important.
It is also important to remember that government costs
associated with this program have escalated quite dramatically in
recent years to the point where its sustainability has been called
into question. This, quite frankly, is the reality of government
today.
As a result, the government has initiated a review of the program
and extensive consultations were held over a year ago involving all
concerned parties. It is not a unilateral consultation. It is a bilateral
consultation involving the public and the private sectors. We are
certainly aware of the valuable input that the industry committee
provided on this subject.
It is safe to say that the overwhelming consensus from all the
major stakeholders is that the government must act swiftly to
transform the Small Business Loans Act program into a full cost
recovery situation. It must be operated on a full cost recovery basis.
The bill accomplishes this objective and will grant authority
respecting the release of security, as many other speakers before
me have laid out the technical details of it. I believe that the
changes contained in Bill C-99 will complete a transformation
process to make the Small Business Loans Act sustainable and
realistic and a program that has the support of small business and
business associations across the country.
Mrs. Rose-Marie Ur (Lambton-Middlesex, Lib.): Mr.
Speaker, I want to add my support to everyone in Montreal today
for the walk for unity. Canadians have come from all parts of
Canada and I truly wish the best for everyone in Montreal
especially today. This is truly a reflection of our great Canadian
spirit and our great Canadian family.
I am pleased to speak on Bill C-99, an act to amend the Small
Business Loans Act. For almost 35 years now, the Small Business
Loans Act program has provided a valuable means of assisting
Canadian small businesses to obtain the financing they need for
capital, improvements and expansion.
The government is firmly committed to maintaining the basic
nature of this successful program. This act is truly important for the
riding of Lambton-Middlesex. I represent a rural riding with the
largest urban centre being Strathroy with a population of about
11,000. My riding depends on the small business for economic
growth and success. Businesses vary from the manufacturing of
clothing and footwear to food processing and auto parts, to name a
few.
The Small Business Loans Act encourages financing for small
businesses which typically have difficulty in securing fixed asset
loans financing for the establishment, expansion and/or
modernization.
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Under the SBLA, the federal government guarantees loans up
to $250,000 which are made to small businesses by private sector
financial institutions. New and existing businesses which are not
farms or religious or charitable enterprises are eligible for Small
Business Loans Act loans as long as their annual gross revenues
do not exceed $5 million annually. It is safe to say that the SBLA
has been to some degree responsible for the dramatic success of
the small business sector in helping keep the Canadian economy
vibrant.
(1255)
Job creation is one of the most important economic contributions
made by the small business sector. Since the late 1970s, smaller
firms have been the key contributors to net job creation. Between
1979 and 1989 alone, businesses with fewer than 100 employees
created over 2.3 million net new jobs in the Canadian economy, 87
per cent of all growth in private sector employment during that
period. The self-employed added a further 400,000 new jobs to this
total.
The role that the SBLA plays in nurturing small businesses,
particularly start-up businesses, is significant. The objective of the
act is to assist in the establishment of small businesses and the stats
indicate that this objective is being met. From 1990 to 1994, 40 per
cent of SBLA loans were made to start-up companies, which
together with other very young businesses, those three years old or
less, have been obtaining about 50 per cent of all SBLA loans.
The SBLA is meeting its goals and objectives in other ways as
well. As is intended, the average size of loans made is modest.
From 1989 to 1993, the average size SBLA loan was $38,000 and
38 per cent of the loans were $20,000 or less, 63 per cent were
$40,000 or less. In 1994 the average loan size increased to $58,000,
mainly because of an increase in the permissible maximum loan
limit.
While these stats confirm that the program is serving start-ups in
young business and providing loans of smaller amounts, there is
other evidence to show that the SBLA is promoting the
establishment and expansion of businesses in other ways. In a
review carried out by independent consultants in 1992, some 60 per
cent of the borrowers surveyed indicated that they would not have
been able to obtain a bank loan without the assistance of the
program. The review cross-checked and confirmed this finding
when lenders surveyed reported that 50 per cent of the loans would
not have been granted in the absence of this program.
Another study of the SBLA was undertaken in 1994 by a team of
analysts under Dr. Allan Riding of Carleton University. Dr. Riding
surveyed SBLA loan files and also worked with the Canadian
Federation of Independent Business survey data. Dr. Riding found
that the SBLA borrowers tend to be those targeted by the act and, as
intended, their businesses tend to be smaller, more risky and with
fewer resources than the non-SBLA borrowers.
Dr. Riding concluded that some 50 per cent to 70 per cent of the
SBLA loans are truly incremental; that is, the lender and the federal
government as guarantor are demonstrating confidence in the
borrowers because of the risky nature of his or her business.
The SBLA program is an important one for small businesses and
a popular one. A fivefold increase in the use of the program has
resulted in a potential annual program deficit of $100 million or
more. Clearly this would have been an intolerable burden on the
taxpayer, one which would have made the SBLA program
unsustainable.
The importance of the program to small businesses required that
it be updated and modernized so that it can continue to provide its
benefits. In particular, the program needed to be truly sustainable
through a move to a full cost recovery. Full cost recovery was
supported by all those who made their opinions known, both
borrowers and lenders, during the extensive consultations that
preceded both the changes before you today, as well as the changes
of April 1, 1995.
Significant action has already been taken by the government to
achieve cost recovery. Effective April 1, 1995, a new annual fee of
1.25 per cent was introduced on lenders' outstanding balance of
SBLA loans made after March 31, 1995. The maximum interest
rate charged by lenders was increased by 1.25 per cent to the prime
rate plus 3 per cent for floating rate loans and to the residential
mortgage rate, plus 3 per cent for fixed rate loans.
(1300 )
Bill C-99 will institute a second set of changes, some of which
relate to program improvement and others to the recovery of the
program cost. These changes include accelerating already
scheduled decreases in the government loan guarantee from 90 per
cent to 85 per cent. They will grant authority to make regulations
for the establishment of claims processing fees and regarding the
release of security, including personal guarantees taken by lenders
in repayment of SBLA loans. They will improve the government
guarantee coverage for low volume lenders.
Furthermore, they will enable future changes to the level of
government guarantees to be made through the regulatory rather
than the legislative process. This will add flexibility to the program
and permit easier fine tuning in the future.
The move to cost recovery for the SBLA and the introduction of
a new fee structure were announced in December 1994 when the
Minister of Industry presented the paper ``Building a more
innovative economy'' to the House of Commons. After
consultations with all stakeholders the annual 1.25 per cent fee was
deemed necessary
15937
to achieve immediate cost recovery on all new loans made after
March 31, 1995.
The losses being incurred annually under the SBLA program
were threatening to spiral out of control. They were in excess of
$100 million a year. The SBLA shortfall was also adding
considerably to the overall deficit the government is determined to
reduce. The program is a good one. The SBLA performs a valuable
service, one that should be continued.
With the changes being brought about by Bill C-99 the move to
bring the SBLA to full cost recovery will be completed. Efficiency
in making future changes to the SBLA will be improved.
Unnecessary subsidies to businesses will be ended and a significant
advance will be made in the government's fight to control the
deficit.
I urge all members of the House of Commons to work for swift
passage of the bill.
Mr. Reg Alcock (Winnipeg South, Lib.): Mr. Speaker, it gives
me pleasure to speak to the debate today. I have been involved in
the question of how we provide financing to small business for
some time and it is my feeling that the act in some way is
somewhat misnamed.
If we reflect on it for a moment, perhaps we should call it the
Canadian banking system failures act, because it is the failure of
our banking system to adequately provide support to small
businesses that makes the act necessary.
In the late 1980s and early 1990s I had the privilege of
co-chairing a task force on the Manitoba economy which travelled
the length and breadth of the province. It held meetings with
chambers of commerce, town councils, small business people and
large business people from all over the province of Manitoba. The
one thing we heard over and over again was that for small, remote
centres access to financing was extremely difficult.
We must ask ourselves why that is. We have a comprehensive
system that the government has supported since the creation of the
country. Banks throughout the country function in an oligopoly and
have incredible protection from competition. They have the ability
to fall back on the government and the taxpayers to bail them out
whenever they make a mistake in a foreign country.
Why cannot banks, which as a result of that protection have
become incredibly profitable, adequately meet the needs of small
business? That is an important question we must ask ourselves and
must keep asking the banks until we get an answer. We are
correcting a flaw that should be corrected by the banking system.
(1305 )
We are talking about raising the loans, capital or equity available
to small business to an average level of about $4 billion a year. We
say that will cost us, if it spirals the way it has been, about $100
million a year. I ask members to reflect on what percentage of last
year's bank profits is $100 million. If they do the mathematics they
will find that it is something less than 1 per cent. Is it too much to
ask the Canadian banking system to invest 1 per cent of its profits
in Canadian small businesses? Why is it incapable of meeting this
challenge?
An example that comes to mind is a small business in south
central Manitoba in the riding of the member for
Lisgar-Marquette. It had 12 employees and made electrical
equipment. It designed a yard light. The principal of the business
was something of an amateur inventor. He developed a number of
successful products that are now being marketed throughout the
world and can certainly be found in almost every farmyard in
western Canada.
Through ingenuity and hard work he managed to convince a
giant company, Quebec Hydro, of the efficiency of one of his
products. Quebec Hydro gave him an order. It is a huge company
that is certainly capable of paying its bills. The first order in the
series was something like $9 million. However there was a catch.
He had to meet the just in time requirements that are quite common
in today's business world. He had to run up his inventory to a level
that would meet the demand requirements of the order from
Quebec Hydro.
Despite the fact he walked into the bank he had been doing
business with for 20 years with the signed contract in hand, he
could not get the bank to lend him the money. It could not happen
because it was larger than the bank's policy for that area or because
the bank did not understand that a business capable of doing that
amount of business could exist in a small rural town in Manitoba.
Whatever its rationale the bank did not respond to his need.
The banking system that we protect, that we bail out when it gets
into trouble, that we protect because we want to have secure access
to capital available for the economy, could not respond to his need.
It is a tragedy.
If we look at whom we are talking about here and we look at the
Carleton study we see the average business which received funding
under the legislation had 7.5 employees. They have annual sales of
roughly three-quarters of a million dollars and before tax profits of
just under $50,000. These are the small businesses of the country.
On average 88 per cent of the businesses that received funding
under the act created 5.3 new jobs. They did what we have claimed
small business would do. If we give them access to capital they will
create the jobs and they will create per dollar more jobs than will
large corporations. That is one of the reasons we agreed to increase
the total lending available under the legislation.
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Nearly 30 per cent of small businesses reported that as a result
of the loans they were able to obtain they became more efficient
and decreased their costs, and 41.7 per cent reported their loans
helped their firms to survive.
I support the legislation. It is a necessary and important change
that makes it possible for small businesses in Canada to continue to
fulfil a role in our community that is important to all Canadians,
the creation of jobs, allowing people to obtain work and live in
dignity. This is the foundation of the economy. Why cannot large
banks, the banks with the billion dollar profits, find it within their
operations to fill this niche? Why cannot they find resources within
their huge operations to meet the needs of small businesses?
(1310)
We have a real problem. I was disappointed today to hear the
question of the member of the Reform Party from Lloydminster
who spoke strongly against regional economic development and
against the provision of capital to businesses in western Canada. It
showed a profound misunderstanding of some of the problems
businesses face.
Another example I will use that came across my desk recently is
of a company in Winnipeg, not a small town but a relatively large
centre with some financial strength. It is extremely profitable and
doing very well in the construction sector. It has lots of work and
has never been at risk. All of a sudden its credit lines were changed.
It had not defaulted on anything. Its business was still strong. It was
doing well. It inquired into why there was a change in the payment
of certain bills from 90 days to 30 days.
The answer had nothing to do with western Canada. It had
nothing to do with that business. The answer was that losses had
been sustained in southern Ontario.
There is a real problem. If we talk to people with medium size
businesses in western Canada we find there is a serious problem.
They can grow to a certain size but to get above that the capital is
not there. Or, if it is there, they have to work harder and pay more
for it than a similar business in Toronto. That is not right. That is a
failure of the market in the same way that the legislation represents
a failure in our banking system.
Those are the places where government can play a role. Those
are the places where government can act to ensure that the
necessary resources are available so small businesses continue to
produce the jobs members of Parliament and our constituents want
them to produce.
I support the legislation I am sure all members of our caucus
support it. We will be voting for the legislation when it comes
forward. We are saddened by the fact that the banking system has
been unable to respond to this need. We feel it is such a vitally
important area that the government must continue to be involved
and strengthen its involvement in support of small business.
The Deputy Speaker: Is the House ready for the question?
Some hon. members: Question.
The Deputy Speaker: Is it the pleasure of the House to adopt the
motion?
Some hon. members: Agreed.
Some hon. members: No.
The Deputy Speaker: All those in favour of the motion will
please say yea.
Some hon. members: Yea.
The Deputy Speaker: All those opposed will please say nay.
Some hon. members: Nay.
The Deputy Speaker: In my opinion the yeas have it.
And more than five members having risen:
The Deputy Speaker: Pursuant to the standing orders the
division stands deferred until Monday at the ordinary hour of daily
adjournment.
Mrs. Cowling: I rise on a point of order, Mr. Speaker. I believe
you would find unanimous consent to further defer the vote on
second reading of Bill C-99 to Tuesday, October 31, at 5.00 p.m.
[Translation]
The Deputy Speaker: Do I have the unanimous consent of the
House to defer the vote until Tuesday, October 31, at 5.30 p.m.?
Some hon. members: Agreed.
[English]
Mrs. Cowling: Mr. Speaker, on another point of order, I believe
you would find unanimous consent to call it 2.30 p.m.
The Deputy Speaker: Is there unanimous consent?
Some hon. members: Agreed.
The Deputy Speaker: Accordingly, the House stands adjourned
until Monday at 11 a.m.
(The House adjourned at 1.16 p.m.)