Hon. Tom Hockin (Minister for Science and Minister of State (Small Businesses and Tourism)):

Madam Speaker, we have all seen the props out on the front lawn. The hon. member referred to them as tombstones. If he is going to be balanced in his assessment of what is happening to the Canadian economy, on the other lawn should be cradles, new businesses that have started up, new enterprises that are growing.

Mr. Hockin:

Madam Speaker, they are more interested in the arrival of a member of Parliament than they are in listening to an answer of their own question.

What this government has done is put in place the best framework for economic growth of any country in the OECD. That is acknowledged by the OECD and the IMF.

Mr. Hockin:

Mr. Speaker, I was mentioning in my initial comments-and I think it is important the hon. member listens to my answer-about constructive help to small businesses in the last two years.

The member for Broadview-Greenwood has helped constructively with the Small Businesses Loans Act. I have to give him credit for that and I am very pleased to do so. Members of our party have worked very carefully with me. These members have not just left this at the level of rhetoric and complaint but have constructively tried to help. That is what I was saying and what was missing in what the hon. member just said to me.

Let me just answer his question. He would like it if 70 per cent of the bank's business is with small business. He would like to see more than 30 per cent of their loans go to small business. So would 1.1 would agree with him. He also knows that the Basel accords require certain kinds of provisioning that the bank has to put aside for small and medium sized loans which is much more strenuous than they have to put aside for other kinds of loans, mortgages, bank loans and so on. Because of that they are restricted somewhat.

Even within those restrictions they could be doing a lot better than they are. I happen to believe they have not done as much during the recession as they should because they had made bad big loans to the Olympias and Yorks of Canada and bad big loans sometimes to some foreign countries that they did not study very carefully. They ended up taking it out of the small business clients sitting across from them who had more and more difficulty getting a loan. All of this we know. All of this is conventional wisdom.

May 14, 1993

We did something about it rather than just complain about it, rather than just pound our fist as does the hon. member for Nickel Belt who always stands, does his solo beautifully and waves his fist. We did it by improving the FBDB. We did it by improving the SBLA. Increasing the government guarantee program, lifting the limit and limiting the personal guarantee are going to lead to a record amount of lending through our financial institutions.

We did something else, and I am now being critical of some other financial institutions in Canada. I was Minister of State for Finance and I worked on the reregulation of financial services. I wanted to have more competition against the banks for doing small business lending. Who could compete against the banks? The credit unions already had about 20 per cent of the business. The banks had about 80 per cent. What about the trust companies? What about the life insurance companies? Why could they not be giving more loans to small business, get in there and compete with the banks every Monday morning?

Therefore, through our reregulation which was passed July 1, we now allow all financial institutions over a certain size to do an unlimited amount of commercial lending. Unfortunately the trust companies have not taken up the invitation. The insurance companies are looking at it. At least we have put the framework in place whereby the other competitors will start to breathe down the necks of the banks for that business. That is something constructive that we did. It will take a few years to get the account managers in place in these trust and life insurance companies, but hopefully they will compete with the banks.

These are just two of the constructive things we have done. There is a whole host of other things on the equity side that I have outlined. I believe as small business minister we have done more as a government across the range of about 18 different ministers for small business than any other government in Canadian history.

Hon. Tom Hockin (Minister for Science and Minister of State (Small Businesses and Tourism)):

Madam Speaker, I would say that high unemployment is a major regional problem in all industrialized countries, including Canada.

What we are doing is building this kind of confidence in the statistics that I have just noted. We are also doing things in a very pointed way regionally, lake our FED-NOR program, for example, in northern Ontario where over 4,000 jobs and over 400 businesses have been created in the last five years through that program. Our regional programs for economic diversification have also helped certain regions that are in difficulty.

I was asked a question about Cape Breton at the beginning of Question Period. Our support for Devco has been strong. Even when we are having to cut back subventions and contributions, we are maintaining our commitments to Devco.

Through our Aboriginal Economic Development Program, which all members of the House respect, we have created over 1,600 businesses on and off reserves. This is

May 14, 1993

Oral Questions

how we are trying to get at regional economic expansion as well as doing these large scale macro things which are building consumer confidence and business confidence, not at a level as high as we would like to see, but it is now positive.

Hon. Tom Hockin (Minister for Science and Minister of State (Small Businesses and Tourism)):

Madam Speaker, the hon. member speaks of high interest rates.

We have a prime rate now of 5.7 per cent, the lowest it has been in 30 years. If people are going to come to Parliament Hill and talk about historically high interest rates, there is something wrong with their arithmetic. They can talk about unemployment. I agree that unemployment is a problem in all industrialized countries, Canada included.

However I have to tell the hon. member the OECD and the IMF both forecast that Canada is going to lead the G-7 in growth in 1993 and 1994. They expect us to have the highest growth rate of employment.

We are winning the horse races with other industrialized countries. We can keep winning every race. It will never be enough for us until we get unemployment down to 4 per cent, 5 per cent or 6 per cent. We are doing the best job of any industrialized country and we are going to continue to keep the course so that we can create jobs. In

May 14, 1993

the 1980s, under this government, we were the largest creator of jobs per capita of any industrialized country.