Mr. Speaker, it gives me great pleasure to address Bill C-53, the Canada Small Business Financing Act.
The purpose of the bill is to increase the availability of financing for the establishment, expansion, modernization and improvement of these businesses by allocating, between the minister and lenders, portions of eligible losses incurred by lenders in relation to loans of up to $250,000 to such businesses for those purposes.
The government will continue to be liable for 85% of the losses on outstanding loans, with the rest being the lender's responsibility.
It is essential that this program designed to help young entrepreneurs be well understood. It provides young or potential entrepreneurs looking for financing with the necessary guarantee or backing to secure a bank loan.
You just go to the bank and, if you do not have a house to offer as collateral, the federal government will guarantee up to 85% of the amount borrowed up to $250,000.
This bill ensures that the SBLA program will remain unchanged. For those who used it in the past, there is hardly any change. We in the Bloc Quebecois take the matter seriously because we know for a fact that small and medium size businesses play a pivotal role in creating jobs. That is why we did not take this lightly. We went so far as to develop a questionnaire that we distributed to businesses. That is what I did in my riding of Lac-Saint-Jean.
I wrote to all the businesses in my riding that had availed themselves of this program for small businesses. Who would be in a better position to tell us whether this program is efficient or not?
That is why businesses were asked “In view of your own experience and what you have seen, would you say that it is easy, difficult, or very difficult for small businesses to get financing?”
Some 87% of people in my riding say it is difficult or very difficult. We know that money is the lifeblood of any business that is just starting up. And we are being told that it is still difficult to get money.
We then asked whether businesses know the SBLA, and, if so, whether they think it should be improved. No less that 98% of respondents said it should be improved. That is a telling tale.
Here is another question we asked “Do you think loans should be granted for working capital as well as for equipment and capital and movable assets?”
This is an rather important question, because we know for a fact that working capital is crucial for a business that is starting up and that the lack of it can have dire consequences. Some businesspeople end up having to put up their personal assets as collateral, which is not always interesting.
Eighty-eight per cent of respondents said that the loans should also cover working capital.
The next question was “From your experience and from what you see around you, do you think the development of small and medium size businesses would be easier if they had greater access to credit at a reasonable cost and to management counselling?”
Of course, following the same logic, 96% of respondents said it would be easier.
The last question was: “Would there be fewer bankruptcies if businesses had greater access to credit?” Ninety per cent of respondents said yes, there would be fewer bankruptcies.
I want to thank the respondents, the entrepreneurs of my riding, who helped me with these questions. It really helped me see things more clearly. I had also sent them a few questions on the proposed bank mergers, an issue of interest to everybody.
Earlier, my colleague from Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques talked about the social role of banks. Banks and other lending institutions have an extremely important role in that if they reject the application of an entrepreneur, it means that it will be difficult for that prospective business to become a reality. So there are very important issues at stake.
I feel strongly about Bill C-53 because I, myself, took a course on how to start up a business. After a first career in aviation, I wanted to do what a lot of people were doing, that is to start up my own business. So I decided to take a course on how to start up a business in order to have a good knowledge and understanding of each and every step of that process. There are several of them.
Everybody agrees, and we heard it many times, that small and medium size businesses are essential to job creation. Right now, unfortunately, large businesses are not the main creators of jobs. We see a lot of large business mergers which, in most cases, result in a significant number of layoffs. I say in most cases because we have the statistics to prove it. Fortunately, things are always different in my region.
In the Lac-Saint-Jean region, we have the new Alcan project, which is worth $2.6 billion and will be the largest private investment in Canada and even in eastern North America. It is a major project that will secure the existing jobs and create about 250 new ones. All of this will of course generate economic activity.
Before entering politics, I had started the process of launching a business. I did not complete it, of course, since I entered politics. That business is somewhat different, but there are similarities. I made small business one of my hobby horses, because I feel that regions like mine, the Saguenay—Lac-Saint-Jean region, which was developed mostly by large companies, should nevertheless diversify their economy and trust the entrepreneurial potential of their citizens to create employment. We will never have enough.
In regions like mine, as in all remote areas around the world, people are leaving. If we could start small businesses of our own and thus create jobs, it would be great, because that is what everybody wants. I will always remember the hon. member for Kamouraska—Rivière-du-Loup—Témiscouata—Les Basques saying that the best way of distributing wealth remained the creation of jobs.
But how are jobs created? Governments often suggest that they will create so many jobs. But who creates these jobs directly? This is clearly the work of those in the field, provided of course that they have the necessary resources and assistance. This is where it becomes important to show solidarity as a community and to provide young entrepreneurs with efficient tools. By “young” I mean new entrepreneurs because, as my colleague pointed out earlier, many people who retire in their 50s want to start their own business. So, this is very important.
There is a basic fact about entrepreneurs that we must understand: not everyone can start a business. According to the psychological profiles that were developed, between 10% and 15% of the general population has the entrepreneurial potential required to start a business. This is extremely important.
The number one prerequisite is entrepreneurial potential, followed by knowledge, skills or services targeting a specific market niche, to ensure that there will be a market for the new small business, which will be creating jobs. Funding is also required, of course. It is an essential element, especially for young entrepreneurs who, more often than not, do not have a house to offer as collateral against a loan and who do not necessarily receive money from their friends and family. So, financing is still extremely important.
The bill is interesting because it maintains the current Small Business Loans Program which, I remind the business people back home, helps the entrepreneurs who do not necessarily have the money, the car or the house to put up as security to get a loan guaranteed at 85% by the government.
So, this is an extremely interesting piece of legislation. However, from a constructive point of view, I think the bill could have further increased the availability of financing for small businesses. It could also have helped businesses with their working capital, in that the loans could have been used as working capital. This is what the businesses in my region told us in a poll.
In a nutshell, this is a good bill and we will vote in favour of it. But there are still some provisions that could have been improved.