Tuesday, November 18, 1997
OTTAWA - Today, a few days before Canada’s banks begin reporting record annual profits, the Canadian Community Reinvestment Coalition (CCRC) released its third Position Paper, calling on the federal government to enact legislation requiring banks to disclose more detailed information about their lending to business. The information is needed so that Canadians can hold banks accountable if they are not meeting the legitimate demand for capital from the small business sector, which has created over 80 percent of the jobs in Canada over the past decade.
In response to several surveys by the Canadian Federation of Independent Business (CFIB), small businesses have consistently ranked “access to capital” as one of their top 10 concerns. In contrast, in response to surveys by the U.S. National Federation of Independent Business (NFIB) small businesses have never ranked access to capital higher than their 43rd concern. In spite of their much greater problems with access to capital, Canadian small businesses are expected to be the job engine of our economy and stay competitive with their American counterparts.
The CCRC’s Position Paper sets out the flaws with the current bank lending disclosure system, including the fact that the system is completely voluntary. The Position Paper recommends correcting these flaws based on the much more effective system in the U.S., as follows:
“Without effective disclosure of banks’ lending to business,” said Luc Lapointe, Coordinator of the CCRC, “the federal government cannot hold banks accountable if they are not supporting the key job-creating small business sector.”
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