February 25, 1985

GOVERNMENT ORDERS

SMALL BUSINESSES LOANS ACT


The House resumed from Friday, February 15, consideration of the motion of Mr. Bissonnette that Bill C-23, an Act to amend the Small Businesses Loans Act, be read the second time and referred to the Standing Committee on Regional Development.


LIB

George Baker

Liberal

Mr. George Baker (Gander-Twillingate):

Mr. Speaker, I have a few words to contribute to this debate regarding the Small Businesses Loans Act. I want to indicate the negative impact that this Bill will have as it relates to high unemployment areas in Canada.

In order to facilitate loans to businesses, whether it be a Government program or strictly a bank program, one must realize that various areas of Canada have different needs. When considering the Federal Business Development Bank or the Small Businesses Loans Act, one must realize that there are certain areas of Canada that need that legislation in place in order for them to deal with the banks or with the federal bank itself. While it may be feasible to discontinue the operation of the Federal Business Development Bank in certain parts of Canada-there appears to be an opinion in the Chamber that the bank may have outlived its usefulness in certain parts of this country-I can assure the House that that is not the case in the high unemployment areas of this country. Due to the attitude prevalent among the banks and private lending institutions in those areas, it is very difficult for a businessman to obtain loans at various times for various businesses.

The same is true of the Small Businesses Loans Act. I believe it is a step backward for the House to pass legislation that imposes restrictions on the granting of those loans and the cost of those loans to a small businessman. I refer specifically to the provisions of this Bill which will impose a fee on the bank to pay the federal Government for issuing the loan.

The representations made to the standing committee by both associations that represent small business in this country have suggested that that mechanism be transferred to the lender. I believe this suggestion goes back to associations that

look at business on a national scale, that average it out across the country, whether or not the area is rich or poor, whether or not business opportunities exist, and more importantly, what the attitude of the lending institutions is in that particular area of the country.

According to this Bill, the Government will no longer allow a 100 per cent guarantee on the loan issued by the bank. Instead, there will be a retraction to 90 per cent of the total value of the loan. Again, this presents a flaw for the business community in eastern Canada, specifically in Atlantic Canada.

We should remember that when a businessman obtains a loan under the Small Businesses Loans Act or from the Federal Business Development Bank, it is only for a portion of the total amount needed for that business. I am not aware of any loan program that is guaranteed 90 per cent, 100 per cent or even 75 per cent by any Government agency in this country. In other words, even under the Small Businesses Loans Act the businessman must contribute a portion of the total cost depending on the type of business he is expanding or setting up. It can vary from 10 per cent to 20 per cent according to the Small Businesses Loans Act.

The small businessman has an investment that he must protect. It is not, as the two organizations representing small business in this country have improperly stated, a give-away to the businessman at all because he is taking the risk and if he does not pay up he will lose his investment and perhaps his entire life savings to that business expansion or creation. We should remember that when dealing with this legislation.

The two main aspects of this Bill include the fee which is imposed on the bank in order to utilize the Small Businesses Loans Act and the reduction of the Government guarantee from 100 per cent to 90 per cent. There is a third factor to this Bill that I do not believe has been referred to by parliamentarians so far. It is that the regulations under this Act as they relate to the fee and to the very mechanism of the Small Businesses Loans Act can now be changed by the Minister through Order in Council, through regulations. That should be a primary consideration for Members of the House when this Bill goes to committee in attempting to determine whether or not it is beneficial for the Minister to have ultimate power with respect to future changes to this legislation.

[DOT] (U10)

When you look at a Bill such as this one before the House of Commons, Mr. Speaker, you tend to think that perhaps the Government is doing something for business in all areas of this country. That brings to mind the fact that there are regions that are different. There are businesses present in certain areas and in certain provinces that are not present in other areas. I

February 25, 1985

Small Businesses Loans Act

give as an example the Atlantic Provinces. Sometimes the presence and encouragement of small business is not paramount in the minds of Governments when they make decisions, and it should be. For instance, I was very pleased recently to see an agreement signed between the federal Government and the Government of Newfoundland regarding offshore resources. I was pleased to see that because it brought to an end years of wrangling, years of political argument-and I say political because it was more politics than anything else. I did not really become involved in this political argument up until now because I did not really believe it would have any great impact on my district on the northeast coast of Newfoundland. I believed it to be more politics than anything else.

When I looked at the Atlantic Accord-and it is interesting that it is called the Atlantic Accord and not the Newfoundland Accord-which was signed by the two Governments, I noticed that the one grave error in the agreement was that it neglected to recognize the importance of business being established in the Province of Newfoundland as a result of the utilization of that natural resource. That is a tragic error, Mr. Speaker. It is an error which I believe in 20 years' time will probably be seen to be the greatest error in Newfoundland's history.

I have a reason for saying that. Section 54 of that Agreement says that that natural resource, offshore oil, will be treated as if the natural resource were on land. But then Section 54 says that that resource must go first to existing industries in eastern Canada that utilize oil. Then it says that in excess of that a new industry will be allowed to be established in the Province of Newfoundland. It goes on to say in the agreement that Newfoundland will receive x number of dollars into the provincial treasury, which is a good thing for the operations of the Newfoundland Government and in providing services to the people of Newfoundland. That is what all the hoopla was about. That is what all the press conferences were about. That is why the Prime Minister (Mr. Mulroney), the Minister of Energy Mines and Resources (Miss Carney), the Premier of Newfoundland and the Government of Newfoundland were so happy.

But hidden in that Accord was that one clause that discriminated against business. It discriminated against business and it discriminated against future small business that could be established in the Province of Newfoundland. I say it is an error because no matter how much money you give to a Government it all boils down to how much money is in circulation with business in that province; because that is what determines the prosperity of that province in jobs. I say that because when I look at the Province of Alberta, the Province of Saskatchewan or the Province of Ontario, one can see how a natural resource then leads to the establishment of small and big business relating to that resource if it is utilized in the proper way. I am referring specifically to the petrochemical industry and to the chemical industries which are primarily offshoots of oil refineries in the country. This is where we see the jobs. This is where we see small businesses and big businesses setting up.

[DOT] 0115)

The Minister of Energy says that after eastern Canada is taken care of we will have businesses operating in the Province of Newfoundland and utilizing that offshore resource. Then I read in the statement that there was perhaps a billion barrels of oil in eastern Canada off the coast of Newfoundland. That sounds like a lot. That sounds like businesses could establish in Newfoundland. However, a billion barrels of oil is only a thousand million barrels of oil; that is all it is. When we look at the production in Alberta and at Canadian production, which runs over 300,000 cubic metres per day, and we multiply that by 365 days, and when we look at approximately 1.3 million barrels per day being consumed in the country, we quickly realize that at best, so experts claim, with the one billion barrels of oil we can take care of Canadian needs for about 2.2 years or 2.4 years, no matter how we look at it.

Then if we examine eastern Canadian consumption in the refineries in the petrochemical industry in the Province of Quebec-and I am thinking about Petromont which is in the area represented by the Hon. Speaker who is in the chair today-somehow we believe that under this agreement we were more concerned as a national Government about the future of Petromont than we were about the establishment of new business in Newfoundland.

There is a reason for saying this. I should like to deal with capacity in eastern Canada because that is the only thing to which Hon. Members can relate as far as refineries are concerned. When we look at the capacity, it works out to about a third of the total capacity for all Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Paul Wyatt Dick (Parliamentary Secretary to the Minister of State (Government House Leader))

Progressive Conservative

Mr. Dick:

Small Businesses Loans Act!

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

George Baker

Liberal

Mr. Baker:

I hear the Hon. Member. I am developing an argument here that the Government should pay more attention to the establishment of business than to its own coffers and the collection of money from the Small Businesses Loans Act.

When we look at the total consumption, a third of Canadian production, we see that Hibernia will last for about six years if we use the total consumption. That is not counting the petrochemical industries to which I referred earlier in the Speaker's riding. That is not referring to the 16 petrochemical plants in the Province of Quebec. That is not referring to the refineries which have been moth-balled in Montreal and in Point Tupper, Nova Scotia. At a very conservative estimate, for six to eight years we would just maintain the consumption capacity of refineries in eastern Canada. If we suppose they operated at 50 per cent capacity, then we would be looking at 12 or 14 years to support eastern Canadian oil refineries. As I said, that does not take into account Petromont or the other 16 petrochemical plants in Quebec. It does not take into account their consumption or the consumption of moth-balled refineries in eastern Canada. When we add it all up, it comes to a bad deal.

[DOT] (1120)

Perhaps I am the only politician from Newfoundland who would say that it is a bad deal. In fact, in discussing the Small Businesses Loans Act, I would have to say that it is probably

February 25, 1985

the biggest rip-off in the history of Newfoundland. In dealing with the Newfoundland offshore resources, you cannot lay down in the Accord to be passed in legislation in this Chamber and in the Newfoundland legislature that for all time you are not allowed by law to have a business operate in the Province of Newfoundland utilizing the resource from offshore Newfoundland. That is Section 54 of that Agreement, in case the Minister of Energy, Mines and Resources is listening or is at all interested in what I am talking about.

Section 54 of that Accord has to be changed. If the Government of Canada is really interested in business, that section will be changed. I do not believe it will be though, because the Accord has received general support in the Province of Newfoundland and from the Newfoundland Government. When you look at actions of Government that support and encourage the establishment of a small business, perhaps you should look at the actual impact of large decisions made by this Government concerning agreements reached with provincial governments.

Supposing a law were passed in this Parliament forbidding the Province of Alberta from developing any more oil refineries or petro-chemical industries using its own oil. There would be an outrage; it would not be allowed by the Alberta Members of this Chamber. But that is exactly what has happened in Newfoundland. I notice that you indicate I have only a minute left, Mr. Speaker. I have not yet got around to actually discussing the Bill.

In conclusion, the Bill before us today is a concoction of a national mind that is centred somewhere in a rich province in this country or was judged on the national average of the needs of small businesses. I do not doubt that it is good for certain provinces, but it is not good for the provinces of eastern Canada. The banks will now have to pay a fee to the federal Government when granting a loan. The loan guarantee will be reduced from 100 per cent to 90 per cent of what the bank loans to the businessman, which is not the total value of the loan. The regulations and basic changes to the Small Businesses Loans Act will now be made by the Minister without having to come to this Chamber. I encourage the Government to realize that there are various regions in this country and that the regulations concerning those three points should be changed when the Bill gets to committee.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Alfonso Gagliano

Liberal

Mr. Gagliano:

Mr. Speaker, I have a question for the Hon. Member for Gander-Twillingate (Mr. Baker). The statistics on small business loans show a large increase in use since 1978 with the more appealing interest rate following the change from fixed to prime plus 1 per cent. Can the Hon. Member comment on the proposed change of a 1 per cent user-fee and also the change to the 90 per cent guarantee? Will those proposals have the same good effect that they had in 1978 or will it be the opposite?

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

George Baker

Liberal

Mr. Baker:

Mr. Speaker, obviously it would have a detrimental effect on those people who are seeking loans from the banks. It will certainly be a hindrance in the area of Canada that I represent.

Small Businesses Loans Act

It has just come to my mind, Mr. Speaker, since I really did not have time to deal with the Bill, that under the Small Businesses Loans Act and other legislation concerning the Federal Business Development Bank it is quite unfortunate that there is really no provision to help a small business over a rough time. A business could be a sound business during the summer months. We can think of many businesses like that. Then along comes the wintertime and perhaps business drops. The businessman gets into trouble, perhaps because of another problem he has, in the month of January or February.

That is where these loan programs fall down. For businessmen looking for operating capital, there is no legislation on the books to really help them in that kind of a tight situation. That is indeed unfortunate when one considers that this man has put his life savings into this business as the 20 per cent investment he must make according to the Act.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Howard Edward Crosby

Progressive Conservative

Mr. Crosby:

Mr. Speaker, I have a comment and a question for the Hon. Member. In his address this morning to the House, and also last week, he has criticized the Accord reached between the Province of Newfoundland and the Government of Canada. He knows more than any of us the difficulties which have occurred in the development of offshore resources in Newfoundland over the years because of the inability of the previous Government of Canada to reach an agreement with the Province of Newfoundland.

In his criticism the Hon. Member keeps harping on one particular clause, being Clause 54. He evidences again the attitude of friction created between Newfoundland and the previous federal Liberal Government. The Hon. Member should consider the need for recognition of the fact that in all of these matters there must be balance. That is to say, we have to balance the national interest with that of the provincial. In this Accord we have seen that balance reached to the satisfaction of both parties.

Therefore I ask the Member whether he, in the interests of the one provision of the Accord which he finds offensive, would destroy the whole agreement reached between the Government of Canada and the Province of Newfoundland? Would he put the province and people of Newfoundland in the position they were in for so many years under the federal Liberal Government of not knowing how or when their resources were going to be developed, at a great loss to the people of Newfoundland in terms of jobs and economic development of all kinds? I would hope he would see the light now that the Accord is in place. I would hope that he would look at it with a positive frame of mind, try to determine how it can be improved, and not reject it because of one provision to which he has some minor objection.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

George Baker

Liberal

Mr. Baker:

Mr. Speaker, it is rather interesting to listen to the Member who represents Nova Scotia. I would say he represents Nova Scotia before he represents any other place in this country. He knows full well that that very clause is in the Nova Scotia Agreement. But the difference between Nova Scotia and Newfoundland, the difference between New Bruns-

February 25, 1985

Small Businesses Loans Act

wick and Newfoundland, Quebec and Newfoundland, is that Newfoundland does not have an operative refinery at this moment. Nova Scotia has in Dartmouth and Halifax. The refinery in the general area the Hon. Member represents is undergoing extensive renovations and upgrading and expansion, waiting for the offshore oil from Newfoundland. There is a refinery in Port Tupper which was moth-balled in 1980.

It is fine for that kind of a clause to be in an agreement with Nova Scotia or Quebec or New Brunswick, or any of the other provinces with refineries or petrochemical industries. The Hon. Member even has Esso Canada and a petrochemical industry located in Halifax. But Newfoundland is signing an agreement with nothing in place it can take advantage of. I would like to have two hours to explain why it is an incredible error.

The point is that we do have two refineries. The refinery at Holyrood was dismantled by Ultramar. It was a small operation of 1,900 cubic metres per day. The other refinery, in Come-By-Chance, is owned by Petro-Canada. Petro-Canada wants to dismantle that refinery. Perhaps the Minister of Energy, Mines and Resources can save some face by telling Petro-Canada to reopen the refinery in Come-By-Chance. She should tell them to reopen the refinery to get at least some spin-off from offshore oil.

To answer the question of the Hon. Member, the point is that if I were in his boots and represented Nova Scotia I would say that clause was marvellous. He knows that in Halifax, Dartmouth and Point Tupper there is enough capacity to take all the offshore oil in the Province of Nova Scotia.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Marcel Danis (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Progressive Conservative

Mr. Deputy Speaker:

I will recognize the Hon. Member for Carleton-Charlotte (Mr. McCain) on debate.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Fred Alward McCain

Progressive Conservative

Mr. Fred McCain (Carleton-Charlotte):

Mr. Speaker, it is too bad the Hon. Member for Gander-Twillingate (Mr. Baker) mixed a few rotten apples in the barrel of his otherwise relevant speech as it related to Atlantic Canada. I have certain points in common with him, and we have often found ourselves supporting the same idea. However, during the last ten years the Hon. Member has not spoken with the same strength and conviction, on behalf of Atlantic Canada, which was found in his remarks today and in other remarks which he has recently made. Whether the remarks were related to fishery, small business or the general economy of Atlantic Canada, often ideas which were not productive or helpful to Atlantic Canada slipped through without the negative comments which were made today.

No matter what may be said about the Bill, at least it recognizes that the Act was outdated, and the definition of small business was not relevant to today's needs. Those problems have been addressed. However, there was no recognition of the good points of the Bill by the Hon. Member, nor of the oil agreement in Newfoundland.

Prior to the oil agreement which was made by this Government there was no hope or opportunity for Newfoundland in obtaining any reasonable benefit from the extended 200-mile

limit. We must recognize the value of good things and not be totally negative, as the Hon. Member for Gander-Twillingate was in his remarks. It is not typical of him. However, he might have changed his ideas because he is now sitting on the other side of the House.

Small business in Atlantic Canada is the lifeblood of that economy. No matter where we may be in Canada, in the main we depend upon the natural resources of the area-the fish, the forest and the farm. Small business, as it was and as it is defined, may not have a high enough limit with the $2 million limit in sales. I can think of one company which employs 16 or 18 people and probably has $2 million in sales. How are those sales to be measured? Are the sales to be measured as part of the increased value which is added by the assembly of parts, or are the sales to be estimated by the total sales going through the door of the business, including the prepared components which were assembled into the sales unit? If it is the total components of the sale, then too many small businesses will find themselves in a very disadvantaged position. I sincerely hope that the regulations under this Bill will enable the $2 million to be value-added rather than the total sale of the components which are purchased and resold by small business operations.

I am very disappointed in the attention which the former Government paid to tourism. I hope the small business people of Atlantic Canada will have the benefit of promotion by the Government of Canada to enable them to utilize the present value of the dollar. When the dollar dropped to the 80-cent level, it was seen by most Canadians as deplorable and a reflection of the economic health of the nation. At that time tourism in Canada should have been a competitive and attractive market for foreigners travelling to Canada. There was a time when it was rumoured that the Liberal Government, over the past 15 years, did not choose to advertise Canada as having a cheap dollar and that tourism should have expanded as a result of that dollar. Therefore, the brochures and the publicity which were distributed by Canada made no effort to exploit the value of the Canadian dollar versus the U.S. dollar.

The biggest potential source of business for Canada is in the United States. There are other important sources, one of which was choked off from Japan by the elimination of certain VIA Rail routes. That was a major choke on the tourist industry in western Canada. However, the U.S. dollar, which at present will cost Canadians approximately $1.35, puts Canada in a position of attracting people for vacations, whether in summer or winter. We are not giving enough promotion to the small businessmen in the tourist industry. However, I wish to compliment the Minister of State for Tourism (Mr. McMillan) who has made it clear that he will go to the world market to attract people to Canada. Small business can be addressed. Perhaps this Bill will be helpful to those people in the tourism industry.

I am concerned about the attitude which has been taken by the Federal Business Development Bank. The policy of the FBDB has not changed as much as I had hoped. I see the bank as one which should be prepared to take some risk. It should

February 25, 1985

be a bank which is available to borrowers in order that they can expand their businesses. For example, I know of a gentleman who approached the FBDB having been recommended by a credible accountant and the development council of his community. He also had the support of the Province of New Brunswick, which indicated that if the bank would give him the loan it would support the loan with a grant. Before the election last summer, after encouraging the man, the bank virtually said that he would get the loan. Now the bank has refused the loan and has refused to meet with the accountant, the applicant and the representative of the industrial development structure in the provincial Government. The opinion was that the risk was too high, yet that gentleman would have employed 20 people in an area where employment is virtually unavailable to the category of people whom he would employ.

I think the FBDB must be channelled in a direction in which there will be more risk taken. Of course, it requires an element of skill and supervision capability. In other words, it should keep an eye on the business to which it lends the money to determine whether the borrower is in fact operating efficiently, effectively and exploiting the market opportunities which are available to the business. We require more competence in that regard.

There are a good many small-businessmen in my community, Mr. Speaker, which rely on the forest. I am probably repeating what I have said more than once over the last 12 years in this House, but I must say that one of the small business groups which is in the most serious trouble is that small guy who may have a woodlot and earns his living cutting wood for market. This small-businessman is being put out of business because of an inadequate policy on forest protection in this land. That does not only apply to Atlantic Canada but across the board.

I want to say to you, Mr. Speaker, that I feel that if this small business development structure is to be pursued, the protection of our primary industry must be addressed. Every province in Canada needs the highest possible competence and capability in the protection of our forest industry, an industry in which so many of the people of Atlantic Canada are employed. One-third of all new employment in New Brunswick is reputed to be attributed directly or indirectly to the forest industry. Yet we are going into the woodlots and Crown lands of New Brunswick and instead of preserving them green, we are trying to salvage what we can of dying or dead forests. This is something which every Government must address in a proper way. I have every respect for the environment of this country and I believe, Sir, that the multitude of products which science has developed should be evaluated to determine what is the safe way to go about forest protection as it relates to the budworm and other insects.

1 am concerned about the farmer. While he has limited access to small-business loans, he does not have adequate borrowing capability in order to make his operation a success and the interest rates on his loans are absolutely killing him,

Small Businesses Loans Act

particularly old mortgage loans which have not been renegotiated and are excessive in their costs to the farmer.

This problem was addressed by the former Government by saying that these small-businessmen should be paying their own way on a user-pay basis. We are now looking again, I understand, at the possibility of agricultural inspection fees, food inspection fees being assessed on a user-pay basis. This is an industry which has already had a declining net income, has had that problem nearly every year for the last five years, and the imposition of a user-pay structure is not in the best interests of those small business people. Perhaps it cannot be addressed in this Bill but it is a subject matter which at some time has to be addressed.

The productivity of the people of Canada does not compare with that of other nations. I say to you, Mr. Speaker, that we must do what can be done to encourage increased productivity at all levels. I was very concerned when I read in The Financial Times of Canada this morning that our productivity was not going forward because at this moment in time we do not have the upsurge in the economy which would encourage expansion which, in turn, would encourage increased productivity. While I am quite prepared to say that foreign economies do have an impact on Canada, I am not prepared to say that foreign economies should be considered to have the impact upon our productivity which would not allow it to go forward as it should. This is something which I feel we have to address.

The Hon. Member for Gander-Twillingate addressed the plight of Atlantic Canada. Atlantic Canada was very pleased when the frigate program was awarded to the Saint John Shipbuilding & Dry Dock Co. Ltd; it appeared to be a great bonus for Atlantic Canada. But after the award was made, it was then that the nitty-gritty negotiations began to take place, and even though the prime contractor is located in Saint John, New Brunswick, we find that only 28 per cent of the man-days which will be required in the construction of those frigates will remain in the Province of New Brunswick. The former Government found every possible way to spin off every possible advantage to other sectors and other provinces in the Canadian economy. I say to the Hon. Member for Gander-Twillingate that, while he may not like the oil deal, there are certainly a lot of Atlantic Canadians who are very disappointed in the situation we now find ourselves in as it relates to the building of the frigates for the Canadian Armed Forces.

I would like to read part of a letter I received which I think indicates both the ability of small business to take advantage of the legislation which we are now discussing, and as it has been in place historically. I think it also places a very major emphasis on the need for this new legislation and perhaps a reconsideration of some of its aspects. The letter was written by a gentleman from Hartland, New Brunswick, Mr. Gary Foster, who is a member of a family which has developed a very important employment structure in our province and who has at the same time succeeded as a small-businessman in a very major and admirable way. I quote just one paragraph:

As you are aware, I have had considerable success in the operation of a linehaul truck brokerage company. Much of the success of this corporation has

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Small Businesses Loans Act

resulted from its ability to utilize the small business deduction and a conservative dividend policy which permitted reinvestment in the business. The profits kept in the Corporation created employment, and increased the over-all economic well-being of Carleton County. The tax incentive created by the small business deduction has worked optimally both in theory and in practice in the development of my business.

That man, Mr. Speaker, led by his father initially, has made as much progress in the trucking business as anyone could ever hope to make. He is employing well over 100 people in the County of Carleton and its surrounding areas. The importance of this Bill, its expansion and the change in its regulations, are of very major concern to our community. I think we have to give more incentive to small business because small businesses in Atlantic Canada are, in the main, of the family and local type. With the exception of the large pulp and paper companies and perhaps the Irving Oil structures, the vast bulk of business in Atlantic Canada has been created by family-operated businesses, whether it be the Ganong Brothers in St. Stephen with their chocolate product, the McCain Brothers in Florenceville with their food processing industry, or any number of others I could mention. It has been the family operation which has created business and employment and which has been the initiator of all the main and important business in our area. But they can only go forward if there is an element of tax advantage.

Something else these people need is a complete knowledge of the marketing of the product which they produce. It is unfortunate that the small business guy does not know where his market may lie or what its potential might be. I would like to see the circulation of information on our market capability so that we could reach a point at which a manufacturer of a particular product can be listed and all of the producers in Canada could in fact be circularized as to what is the potential market for that product. I am absolutely convinced that we do have the imagination, the investment capability,-the workforce and the productivity potential in Altantic Canada to be an important contributor to the small business sector of Canada. However, the small business sector does need leadership. It does need this legislation which expands the opportunity to keep the profits in the company so that the company in turn can expand.

Three things are needed. The first is the circulation of information to small businessmen to enable them to understand the market potential outside the community. The second is for this Act to receive quick passage. The third is for the Government to study the capacity of the Federal Business Development Bank making more credit available. The Canadian banking system today does not lend itself to recognition of the potential and capability of the small businessman. Hundreds of millions of dollars, or maybe even a billion dollars, will be lent to an organization such as Dome. However, $50,000 for a small businessman in rural Atlantic Canada is considered excessive.

Let us establish a credit line. Let us establish the small business structure under this Act. Let us attempt to feed them

the market capabilities as well as giving them a credit line to enable them to get the business in the first place.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

George Roland Henderson

Liberal

Mr. Henderson:

Mr. Speaker, I enjoyed the speech of the Hon. Member for Carleton-Charlotte (Mr. McCain). Over the past number of years I have served on Fisheries committees with the Hon. Member. On many occasions I found that we shared some of the same problems, as we both come from Atlantic Canada. I know of the interest of the Hon. Member in the areas of agriculture, fisheries and forestry.

The small business sector in my constituency is possibly even smaller than that of the Hon. Member. However, we do have an agricultural community. I am sure the Hon. Member would agree that there are tremendous problems in the agricultural industry today. Prices in the potato industry were extremely depressed again this year. Producers tell me that they are selling potatoes at more than one cent a pound below the cost of production. There are severe problems in the pork industry. The only sector of agriculture which is doing reasonably well is the milk industry.

The Hon. Member mentioned user-pay on inspection. From what farmers tell me I believe that the user fee for potato inspection will be extremely detrimental to the industry at this time. Producers believe, and I agree, that inspection is a protection to the consumer and should be paid for out of general revenue. Would the Hon. Member like to comment on that? It is a problem which is very serious for potato farmers in Prince Edward Island and is probably equally as serious for the potato producers of New Brunswick. Would the Member comment on whether he and other members of his caucus from Atlantic Canada feel that there should be any kind of inspection fee imposed on the potato industry?

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Fred Alward McCain

Progressive Conservative

Mr. McCain:

Mr. Speaker, I share the concern expressed by the Hon. Member for Egmont (Mr. Henderson). Considering the evolution of government and policies over the years, I am very concerned about the change of priorities which has taken place in government expenditure during my lifetime. There was a point when there was no consideration given to the idea of user-pay for government services. The Government of Canada felt that was its responsibility for the protection of consumer and producer as related to food. Even in the 1930s when money was scarce there was no charge for potato seed inspection. There may have been a registration fee for the applicant, but that was minimal. There was no charge for meat inspection in the abattoirs.

I ask all Members of the House what has happened to our priorities in this country. We have moved ourselves so far in our field of expenditures that we can no longer treat the citizens of Canada in the primary fields of production, and particularly in the area of food, with the same protection for the same fee that was applied in the 1930s. As a matter of fact, it was not until 1968 that our budget expenditures got so out of control that in total desperation the economists, the Cabinet, and the Department of Finance as a whole, began to look for ways to raise money to operate the oligopoly of government which is so huge that it is no longer in control.

February 25, 1985

I am very concerned about the charges which were imposed before 1984 and are still under consideration in 1985. In some way or another the thinking of government and its finances has lost sight of the services which were basically assumed, whether the repair of small craft harbours, the supervision of bud-worm spray, or the inspection fees for food products in all of Canada in all its spheres. We seem to have lost sight of the capability that we had to extend services at a reasonable fee. We seem to have lost control of our expenditures to the point where we are desperate. We were desperate before September 4, 1984, and there are signs of desperation in 1985. It is a chronic problem. How do you get the balance of expenditures into place in order that the proper services can be rendered?

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

George Baker

Liberal

Mr. Baker:

Mr. Speaker, I have a question for the Hon. Member in relation to his reference to me at the beginning of his address. Aside from yourself, Mr. Speaker, and the Member for Halifax (Mr. Mclnnes), the third person in the Chamber who would be very happy about the offshore agreement and the possibility of guaranteed oil supply for years to come would be the Hon. Member who just spoke. The largest oil refinery in this country is not to be found in Alberta or Saskatchewan. The largest oil refinery in the country, with a capacity of 37,000 cubic metres or 220,000 barrels a day, is in Saint John, New Brunswick. The hon. gentleman made reference to it in his speech. I can see why he is very pleased with the offshore agreement, although I am not.

The hon. gentleman made another statement concerning the fact that I now appear to be outspoken. He intimated that I previously was not. The most outspoken person in this Chamber for the past six to eight years on forestry policy is the hon. gentleman who just spoke. He was at complete odds with government policy as it related to budworm spraying and the forest industry. Does he still hold those views as firmly as he did when he was in opposition? Has he seen the light and changed his mind?

I completely disagree with him on the method of his forestry policy. Is he opposed to the present Minister of State (Forestry) (Mr. Merrithew) or is it too early for him to take a public position on the question of spraying with Matacil and Feni-trothion and other chemicals?

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Fred Alward McCain

Progressive Conservative

Mr. McCain:

Mr. Speaker, I have not changed my position at all. The Hon. Member can speak to the Minister responsible for forestry and other Ministers if he doubts that.

My position was that North America could not feed itself from its agriculture without the chemical advances that have been made. Canada and particularly Atlantic Canada cannot provide employment and a viable economy without a productive and viable forest. We are very dependent on that sector. The Hon. Member's constituency is no different from mine and may even be more dependent on forestry than my constituency.

There is a safe way to protect the forests and we should find it, because if we wait much longer there would be a 10 per cent

Small Businesses Loans Act

reduction in employment in that area of New Brunswick along with a very rapid escalation of unemployment as a result of improperly nurtured, sprayed and harvested forests across Canada. I have not changed my position and I will continue to pursue it as much as I have in the past.

Finally, the largest refinery in Canada is operating at a very low percentage of its production capability because the Liberal Government pictured Canada as an unreliable source of energy. Its markets on the eastern seaboard of Canada were cut off, as they were for Come-By-Chance-

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Leonard Donald Hopkins

Liberal

Mr. Hopkins:

That is absolute nonsense.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Fred Alward McCain

Progressive Conservative

Mr. McCain:

It is not nonsense. There is no question that the Come-By-Chance refinery was built to export oil to the United States. The Hon. Member will not argue with that. But the market was lost, as it was lost to the refinery in Saint John.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

John Edmund Parry

New Democratic Party

Mr. John Parry (Kenora-Rainy River):

Mr. Speaker, I rise today with no great sense of enthusiasm or moment as regards the contents of Bill C-23.

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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?

An Hon. Member:

Why did you get up at all?

Topic:   GOVERNMENT ORDERS
Subtopic:   SMALL BUSINESSES LOANS ACT
Sub-subtopic:   MEASURE TO AMEND
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February 25, 1985