Mr. Dennis Mills (Broadview-Greenwood):
Madam Speaker, I want to begin by saying that I am actually just as excited as the government is today about getting this bill through the House.
I am excited about this bill going through the House today because this represents a tremendous opportunity for the 960,000 businesses in this country whose sales are less than $5 million. Many of them have tremendous difficulty in getting access to bank credit.
What has happened here today is that a law will momentarily be passed which will say to the financial institutions of this country that if small business people come into their bank and ask a loan officer for some credit to expand and grow their business or start a business and if that business plan which they present to the financial institution is right and makes sense then under this act the Government of Canada will guarantee 90 per cent of the loan. It will insure it to 90 per cent.
Businesses with sales of $5 million will have a loan limit of $250,000 at prime plus 1.75 maximum, and it could be less. When I say it could be less I would like to give a specific example of a banking institution that came to our all-day committee meeting on Tbesday. We worked into the night and heard witnesses from 9 a.m. right through. The Bank of Montreal was represented. One of the witnesses, Mr. Ronald G. Rogers, senior executive vice-president, personal and commercial banking, said: "The Bank of Montreal will do better than 1.75 per cent, in fact on loans for small businesses of $100,000 and under, it will be prime less 1 per cent".
If the prime is at 7 per cent-I realize that it is less than that today but let us just use that figure for discussion purposes. If a person has a small business and is only looking for $100,000 or less the Bank of Montreal will use the Small Businesses Loans Act, under which 90 per cent of that loan is guaranteed, and will only charge 6 per cent.
If this is used by the financial institutions of this country I really do believe it will get the economy of this country going again.
February 26, 1993
I have been standing in this House talking about small business and about getting capital for small business. I have asked questions in this House. I have participated in 50 different debates in this House during the last 3 years on behalf of small business. I have been pleading, practically begging this government to focus its energies on the small business sector because that is where the job creation potential is. That is where the greatest hope for new job creation lies in this country.
It is no secret to anyone in this House or anyone in this country that all the major corporations are downsizing, that they are laying off workers. My goodness, I think of a small city like Hamilton where Stelco and Dofasco laid off something like 1,200 people at a shot, or Oshawa where General Motors laid off thousands of people at a shot. Does the House know what that does to the hope and confidence of a community? We can go into a major mall, not just in Hamilton or Oshawa but anywhere in the country, after there has been a major layoff and almost feel the lack of confidence.
We can tell by the number of purchases in clothing stores, pet stores or, in my case, restaurants. On Dan-forth, Queen, Pape and Gerrard Streets in Toronto there are some of the nicest restaurants in all of Canada. Most of the time these restaurants have line-ups, but in the last eight to ten months it has changed. There are 300 restaurants in my riding. There are restaurants in my riding that represent over 40 different countries. There are a large number of Greek restaurants and a very large number of Vietnamese, Chinese, Italian and East Indian restaurants. They provide the largest number of restaurants, but there are restaurants from many different countries, many different cultures and many different communities. Collectively they employ 5,800 people; they are my Stelco, my Bombardier. In the last eight months people can walk into these restaurants and pick what seat they want because there are no line-ups any more. It is awful.
The confidence and the hope in our communities, no matter what part of the country, has been very low. We cannot get the hope or the confidence from the large corporations because they are all downsizing, they are all bureaucracies and they are all restructuring. Where do we get the jobs? We get the jobs from the entrepreneurship of this country.
I do not mean to be disrespectful but this is sort of like a deathbed conversion. The government is finally begin-
ning to realize that small business is where the action is because there is no bureaucracy in small business. If a proprietor of a small business decides over a two or three-hour meeting that he or she wants to expand his factory or buy a new piece of machinery to be more competitive then he or she makes the decision in a couple of hours and goes forward.
Subtopic: SMALL BUSINESSES LOANS ACT
Sub-subtopic: MEASURE TO AMEND