44th Parl. 1st Sess.
February 3, 2023 10:00AM
- Feb/3/23 12:13:55 p.m.
- Watch
Is that agreed?
Some hon. members: Agreed.
7 words
- Hear!
- Rabble!
- add
- star_border
- share
Madam Speaker, I would like to thank my colleague from South Shore—St. Margarets for his speech and for the work that he does on the Standing Committee on Industry and Technology. His colleague from Calgary Nose Hill got us thinking about the Investment Canada Act two years ago. My colleague from Windsor West remembers it well.
One of the recommendations that was made, which was mainly ignored by the government, sought for more transparency from the minister when making decisions under the Investment Canada Act.
I would like him to tell us whether such transparency is necessary when it comes to this act. What are the conditions being imposed on businesses in terms of investments in particular?
I remember when Rona was sold to Lowe's. The minister never disclosed the conditions. Today, Lowe's is no longer around and we have not seen any investments. The government did not do anything to protect our head offices.
What can be done to protect our head offices other than hoping for more transparency from the minister about what he is doing? Is the member in favour of more transparency?
190 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I would like to thank my hon. colleague for his work over the years on the industry committee and that particular report. It is a very good report. I would encourage all members to read it. I support all of the recommendations in that report.
I think we can work together when Bill C-34 comes to the industry committee, to work on that transparency. Reasons why an acquisition is reviewed and reasons for accepting or rejecting it by the cabinet, the Governor in Council and the minister are things that should be published with the decision each time. That way, Canadians would be able to fully understand the rationale behind what sometimes look like very odd things, such as when we lose very important Canadian-headquartered businesses to other jurisdictions, particularly when they are, in the case of some acquisitions, countries not as aligned with our goals as we would like.
154 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I want to follow up with my colleague from Abitibi—Témiscamingue, who did a really good job on the report at committee. I want to congratulate the member here. He has come onto the industry committee just recently and has done a great job. I am really pleased he has actually researched the report. I wish that the government had done that as well.
I really appreciate the fact that we are actually going to bring some of these recommendations forward.
The takeover of Rona, and now Lowe's having some questionable ownership in the United States, brings an important example. I just want to reflect further on that, because when we think about national security, it is also about competition and about product availability.
With the closures of stores, especially with regard to pricing and other things, from wood and lumber to other things we require, we need to look through a different lens about what this means for Canada, because now we have lost an iconic entity.
174 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, one of the things I mentioned in my speech, and hopefully one we can explore in committee, is this issue of whether the net benefit test is being used well enough.
We have a lot of corporate concentration in this country. We have oligopolies in many of our industries, and this is one of the reasons why we rank last by the OECD in productivity as a country. The OECD actually projects, going forward, that we are going to be the least productive of the 20 OECD countries in the world.
That is why this bill is so important, that we get to study not just the security issues but also the issues of net benefit and corporate concentration that we have in this country.
127 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I am honoured that you recognized me. I would like to take this opportunity to acknowledge your colleagues from Joliette.
I will not be sharing my time today, but I would like to take a brief moment to recognize the work of parliamentary interns. I was privileged to have Sonja Tilro on my team for several weeks. She has done an incredible job, and this speech will be one of her final contributions to my team. I would like to acknowledge this contribution, as well as that of all parliamentary interns, who are distinct assets who add value to our Parliament.
Today we have before us Bill C-34, a government bill that seeks to amend the Investment Canada Act. This is the first major amendment to the Investment Canada Act since 2009, when the government introduced a national security review process for foreign investments. There have been no other proposals since then, other than a few concurrence amendments when entering into trade agreements.
In essence, Bill C-34 increases the government's ability to better control foreign investments, but only those that could harm national security. It makes no changes to the economic benefit part of the act. The issue of truly modernizing the Investment Canada Act is being avoided yet again and major issues will not be addressed this time either.
Bill C‑34 essentially makes seven changes to make the review process more effective. We are pleased to see that the work of the Standing Committee on Industry and Technology was taken into account and inspired these changes, which are the following: new filing requirement prior to the implementation of investments in prescribed business sectors; authority for the minister to extend the national security review of investments; stronger penalties for non-compliance; authority for the minister to impose conditions during a national security review and so on.
The Bloc Québécois supports Bill C‑34, which, in our opinion, improves oversight of investments that may be injurious to national security. However, the current version of Bill C‑34 simply does not include enough protection for our businesses in Quebec and the government has missed a golden opportunity to strengthen our business network and prevent our resources and capital from going offshore. To achieve this necessary energy transition, we need every economic tool at our disposal.
Is it still possible to add elements in order to better protect head offices and send a clear message that a multilateral agreement could be considered to meet the need, expressed by Quebec, of controlling the development of its economy and protecting businesses in the strategic niches it has created?
The Investment Canada Act was passed in 1985 and requires that the government ensure that important foreign investments are “to be of net benefit” to Canada before being approved. In 2009, the act gained a section on national security that gives the government the power to block a foreign investment if it is deemed to be injurious to national security. We are talking about investments in particularly critical sectors, especially those made by foreign governments or companies linked to those governments. Bill C‑34, introduced on December 7, 2022, by the Minister of Innovation, Science and Industry, has improved the reviews and increased the minister's powers, but only for investments related to national security.
My speech will identify a few elements that could be studied seriously by the committee when we get to that stage of the legislative process.
A few members are here today to read what is in the bill dealing with investment in Canada. What tools will allow development to occur with confidence while maintaining some control over foreign investment? How important is the protection of intellectual property? What commitments and conditions are we prepared to demand of investors in order to promote the creation of wealth here, in Quebec?
We are preparing our future in the image of the Quebec model, and we simply want the federal government to recognize this. The federal government's foreign investment policy these past years can be summarized in two words: deregulation and permissiveness.
The policy provides for increased scrutiny when national security is at stake, but otherwise the floodgates are open. The fact is, all other foreign investments are approved virtually automatically and without review. Statutory review mechanisms, which the government readily insists on protecting in every trade agreement that it signs, are essentially rendered ineffective.
I want to come back to the work of the Standing Committee on Industry and Technology.
In the Bloc Québécois' supplementary report, which was submitted at the same time as the standing committee's, we identified the main elements that are essential to strengthening Quebec's economic development model.
Let us talk about how the Conservative and Liberal governments have handled the threshold at which agreements must be submitted for review under the Investment Canada Act over the past 10 years.
In 2013, the Conservative government set the tone when it announced plans to raise the threshold at which the government evaluates whether foreign investments are actually beneficial. Then in 2015, the Liberal government sped things up.
Do these policies have a real impact? Yes. Over the course of that decade, things went off the rails. Every time we had a chance to study this issue in committee, witnesses sounded the alarm about the flaws in the current act. The threshold is not high enough, and too many agreements simply do not get reviewed.
The result is striking. Between 2009 and 2019, the proportion of foreign investments subject to review fell from 10% to just 1%. My colleagues heard that right. Under the current rules, 99% of foreign investments are now automatically authorized without a review. That is why the Bloc Québécois demanded that the department lower the threshold.
The Quebec model includes businesses that are much smaller in size and number. The department must lower the threshold in order to stop this transfer of our intellectual property and talent into the hands of companies headquartered outside of Quebec. This problem comes at a bad time. Over the past 30 years, the nature of foreign investment in OECD countries has changed. New investment is down, while investments in the form of mergers and acquisitions of existing companies are up.
We understand that we need to get on the same footing as our trading partners. If there is one thing the COVID-19 pandemic has shown us, it is that global supply chains are fragile and that it is unwise to be completely dependent on decisions made abroad.
The new review process is essentially the same as the one in the United States. Adopting it increases the chances of the Americans continuing to consider us as a reliable partner. That is a condition for being a well-integrated preferred supplier in their supply chains.
In a context where protectionism is on the rise among our neighbours to the south, which could seriously upset our economy, it is an important asset and the Bloc Québécois applauds it. The Standing Committee on International Trade is currently looking at the possible effects of U.S. policies in favour of the electrification of transportation that have the potential of excluding our companies that specialize in this, including electric vehicle batteries. In addition to the new guideline on critical minerals which is likely to diminish China's footprint in this sector, Bill C‑34 is reassuring, which is a good thing.
Critical minerals and the electrification of transportation also raise important issues. As in other countries, there are good reasons to protect our businesses and encourage them to set up near the resources they need. We cannot blame other countries for taking the opportunity to get their hands on our businesses, provided a comprehensive and thorough review has been done.
The region of Abitibi‑Témiscamingue is no exception. We are aware that our region will be coveted for its minerals such as rare earth, lithium, copper, nickel and gold. The region is full of critical minerals all the way to northern Quebec.
We also have one of the best universities, Université du Québec en Abitibi‑Témiscamingue or UQAT, which has international experts and top-notch programs. We want to play a leading role and really succeed in this field. For my part, I foresee the creation of a centre of excellence for critical and strategic minerals.
It is now time to create the necessary jobs and to undertake the long-term economic and industrial transformation towards a carbon-neutral future. The time has come to create a future where Quebec will be a global leader in clean technologies by focusing on essential minerals and the development of an innovative and sustainable ecosystem for the production of batteries, or what I call the green mine.
Bill C‑34 is in addition to the new critical minerals guidelines that the government adopted on October 28, 2022, and that apply to 31 minerals that are critical for the sustainable economic prosperity of Canada and its allies. By supporting the new government guidelines for these 31 critical minerals, more strategic projects for resource regions will be developed.
This is a real opportunity to prepare our own future through the creation of technological goods and the electrification of transportation. I am referring to the minerals necessary for the production of technological goods and the electrification of transportation. There is a real opportunity to position Canada and Quebec as leaders in exploration, extraction, processing and production, and to make Canada a leader in the production of batteries and other digital and clean technologies, and to develop an innovative and sustainable battery industry ecosystem in Quebec and Canada, including making Canada and Quebec a world leader in battery manufacturing, recycling and reuse.
In those areas, an investment from a foreign government or affiliated company will be considered a disadvantage from the outset. It will be subject to national security review and will likely be denied, except in exceptional circumstances.
The burden of proof is reversed here. The investment is refused outright, unless the investor can demonstrate that it is truly beneficial. The government recently blocked three mining investment projects by applying this directive.
That said, Bill C‑34 and the new Canadian critical minerals strategy should put the brakes on Chinese companies taking our resources. It should put a stop to our industries being so dependent on foreign resources.
Let us talk about security. While we are currently talking about the risks that Chinese companies represent to our security and our technological choices in telecommunications, it is just as important to assess the risk involved in foreign investors taking our resources away from our industries. By thoroughly and diligently reviewing the economic and security components of every investment, we can capitalize on those who would bring us prosperity and avoid those who would put us at risk.
It also makes it possible for us to keep pace with our allies, particularly the United States. It guarantees that we are considered a reliable, preferred partner in trade and in the development of critical mineral supply chains and that we can continue to be a part of the green future.
The amendments to the act make the national security review process more efficient by giving the Department of Innovation, Science and Economic Development, in consultation with the Department of National Security, the power to make an order extending the national security review referred to in section 25.3.
In the past, an order from the Governor in Council was needed at this step of the process. By eliminating the need for an order from the Governor in Council, the partners responsible for intelligence security will have more time to complete the intelligence analyses, which are becoming increasingly complex.
The protection of our intellectual property is another important issue. The amendments to the act put in place a pre-implementation filing requirement for some investments in designated sectors. That will enable the government to have an overview of the investments made in sectors where the investor could obtain sensitive assets and information, intellectual property or trade secrets, for example, immediately after an investment is made.
Now the government will be able to prevent that kind of irreparable damage. Investors operating in designated sectors will have to submit notice within the timelines specified in the regulations. The bill also provides for better information exchange with international counterparts. Amendments to the act facilitate international information exchange and authorize the Minister of Innovation, Science and Industry to disclose information about an investor to allied countries to support their intelligence analyses and national security reviews if the minister deems it appropriate to do so.
Previously, information about a given investor was considered privileged and could not be disclosed. This amendment will enable Canada to better protect itself against investors that may be actively seeking the same technology in several countries or when there is a shared national security interest. That said, Canada would of course not communicate that information for reasons of confidentiality or any other reason.
The government's blind spot is the preservation of our economic levers. All these developments are good, but they are incomplete. The Bloc Québécois wants the government to do much more. Last year, according to the annual report the department's investment division tabled in Parliament in October, foreigners submitted 1,255 proposed investments totalling $87 billion.
Of those 1,255 investment projects, only 24, or 2%, were considered to have national security implications and would have been covered by the new rules contained in Bill C‑34. The remaining 1,221 foreign investments remain subject to the old lax rules and almost all were automatically approved without review. Only eight, or less than 1%, were reviewed to determine whether they actually provided a net economic benefit.
Over the years, the act has been weakened. The threshold below which the government does not even review the investment continues to rise. Virtually all investments pass through like clockwork without the government being given the authority, under the Investment Canada Act, to assess whether it is beneficial.
The current act, passed in the mid-1980s, assumes that full liberalization of investment is good, that just about any foreign investment is good, regardless of the loss of decision-making levers and head offices that it entails, the resulting weakening of Montreal's financial sector, the total dependence of our businesses on foreign suppliers, the possible land grab, the loss of control over our natural resources and so on.
By focusing solely on national security, Bill C‑34 does not address Quebeckers' and Canadians' gradual loss of control over their own economy. For that reason, we invite the government to table another bill to modernize the entire Investment Canada Act and not just the part on national security. National security is a good thing, but so is economic security. In particular, the government must lower considerably the threshold for the approval of foreign investments without review.
We must be open to foreign investment because it is a vector of growth and development that we cannot allow ourselves to ignore. Global competition is fierce. We have a significant competitive advantage. We are reliable and our carbon footprint is by far the best thanks to our hydroelectric power.
Furthermore, we all want to support our domestic corporations and to help them grow and create wealth for Canadians. Our goal is to protect our companies and head offices, which we know are important decision-makers.
I want to reiterate that Quebec's economy is and will always be open to the world. Openness toward foreign investment is essential for enabling Quebec to access major trade networks, which is crucial for guaranteeing the prosperity of our relatively small-scale economy.
However, we must be careful about opening our doors to investors. To date, the Investment Canada Act has not helped. We are encumbered by an investment act that has been watered down in many ways since the 1980s.
The total market liberalization that plagued the 1980s had a negative impact on the quality of our local economies and resulted in the weakening of financial centres like Montreal, the withdrawal of decision-making power and tools from head offices, land takeovers, and loss of control over our own resources.
As Jacques Parizeau wrote in 2001, even before China joined the World Trade Organization, “we do not condemn the rising tide; we build levees to protect ourselves”.
Since the Quiet Revolution, the Government of Quebec has gained significant economic and financial leverage enabling it to pursue a policy of economic nationalism—the intensity of which varies from one government to the next—that gives Quebeckers greater control over their economy.
Unfortunately, as the Investment Canada Act was weakened over the years, the levee crumbled. We have to convince the government to insert new provisions into the act to shore it up.
This is a welcome development, but it is not enough. Major investments from corporations with ties to the Chinese government have shifted things. Canada is starting to realize that it needs better oversight over foreign investments and has to make sure they are beneficial before authorizing them. This bill signals an awareness that was a long time coming, and the Bloc Québécois is happy about that.
2938 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, when I look at Bill C-34, I see legislation that is in Canada's best interest. I think of our economy generally and Canada's dependency on international trade. There is a lot of investment coming into and going out of the country. This legislation is there to protect the interests of our nation from a safety perspective. However, it is also there to ensure that we continue to build our economic links throughout the world and have investments that advance our communities, no matter where they are in Canada.
Could the member provide his thoughts regarding whether the Bloc party intends to support Bill C-34?
110 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I thank my colleague from Winnipeg North for the question. I want to reiterate that the Bloc Québécois supports the bill, but it is also proposing some improvements, including to ensure that we can keep head offices in Quebec.
The issue surrounding thresholds is simple: What happens in the case of devaluation? We may be entering a recession, and that worries me. COVID‑19 was especially worrisome for our businesses and flagship companies such as Air Transat, whose value dropped largely because of the loss of commercial flights. This had consequences, and if its value keeps falling and dips under the infamous threshold I was talking about earlier, it could be bought up by a foreign American, European or Chinese company. This means that its head office would move, and company decisions would no longer be made based on the best interests of the Quebec nation.
In Abitibi‑Témiscamingue, we are having a major problem with flights from Rouyn‑Noranda to other destinations. Air Transat once expressed an interest in offering flights to international destinations. Unfortunately, that never happened, but there is no doubt that if it were another company, it would not be interested in the future of regional aviation.
212 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I have a question for my esteemed colleague from Abitibi, who sits on the Standing Committee on Industry and Technology and is the best at promoting his beloved region. I have many things in common with him.
I, too, am a member of the Standing Committee on Industry and Technology, and last year we witnessed the sale of a certain company, Neo Lithium, to be specific. The company, which now belongs to a Chinese group, does not have projects in Canada, but does have one in Argentina.
Will the bill help us hang onto our companies or our rare minerals that we want to develop, and that are highly abundant in Abitibi? Will the bill prevent this type of thing, or, at the very least, reduce the potential impact of these decisions in Canada?
137 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I would like to thank my fellow Quebecker, and I feel I can call him that because his presence at the Standing Committee on Industry and Technology means that we talk even more about Quebec. I really want to highlight his always relevant contribution on issues related to economic development. He is an entrepreneur, as he likes to remind us.
I would like to remind him that my region is called Abitibi—Témiscamingue. It is important to be inclusive, and my constituents would be upset with me if I did not mention it.
With regard to the member's question, the sale of Neo Lithium did raise a lot of questions, first of all because the mechanism was not automatically triggered. It was an acquisition, but at the same time, the portion of Neo Lithium that was in Canada was an empty shell. The only thing Canadian about it was its head office. How could Canada's best interest have been protected? That said, some serious reflection is required regarding the importance of owning our resources.
We are living in a time of increasing resource scarcity. Strategic critical minerals come to mind, but this is true across a range of areas, so we need to be able to maintain ownership of our resources to further fuel our industries.
Take Lion Electric, for example. It would be absolutely fantastic if we could supply that company with lithium. However, if we send all of our lithium elsewhere—for example for Tesla vehicles because it is great to provide Tesla vehicles with Quebec lithium—we will be neglecting our own economic development. That raises a lot of questions for me.
I think that we need to make a major change in terms of our national economy. We need to start protecting our businesses.
307 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, you are doing a fantastic job. I had a tough time sitting in the chair. It did not turn out as well as it has for you.
To my colleague who sits on the industry committee, we did actually study this, as he noted in his speech in the previous Parliament.
We had an unnecessary election, which I think we can all relate to in different ways. The government never really responded to the thorough report that we wrote. The member was very articulate. He was also determined to raise the threshold issue through testimony and the report.
Does the member feel that the government and the minister should get a pass for this report? I do not believe so because the government called the unnecessary election. Because of that, we did not get the work we did through the full vetting process. I still think that is relevant to what we are dealing with today. Could the member reflect on that?
164 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I will tell him again, even though I know that he has heard it before. The member for Windsor West is sort of a mentor to me on these issues. He has been a member of the committee for such a long time.
It was very shocking for us, as a very collaborative and productive committee, to see half a dozen studies die on the Order Paper. However, with the help of my colleague, I moved several motions to revive them. One by one, the studies were all reactivated in order to ensure that the government responds, which is fundamental.
Let us come back to my colleague's question. Thresholds seem very necessary to me. I spoke about them in my speech. We also need to remember one recommendation that the Liberals dismissed in their dissenting opinion to the report from our study on the Investment Canada Act. It was recommendation 5, which sought to ensure that the minister is more transparent when rendering a decision under the Investment Canada Act.
I could bring up the infamous example of Rona and Lowe's again. It is important because the government never revealed what requirements it imposed on Lowe's in terms of jobs, investment and maintaining stores or branches in specific regions. What were the requirements? Nobody knows, but what we do know is that the company will not comply with them.
235 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I thank the member for Abitibi‑Témiscamingue for his speech. He talked about critical minerals.
Obviously, when China tried to get its hands on critical minerals, the answer was a categorical “no” for national security reasons. However, my colleague talked about the United States, and the U.S. army is also after critical minerals.
Yes, the United States is an ally, but should we still make sure we retain a certain degree of control over our critical minerals and keep the supply chain, or at least part of it, in our hands?
99 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I thank my colleague from Saint-Jean for delivering such an accurate analysis.
Once again, I would like to highlight the work that is being done at the Standing Committee on Industry and Technology. As a result of the Neo Lithium study, we have undertaken a study on strategic critical minerals.
Even before the last election was called, I criticized the fact that Canada had no national strategy on strategic critical minerals. A strategy was then created based on the work of the Standing Committee on Industry and Technology.
In my view, it is fundamental to ensure that processing can happen on site at the mine, in order to highlight the key role of the region where the resource and mine are located. First of all, there are obvious savings to be had in terms of transportation costs, as well as an environmental benefit, but above all, it is the best way to protect our industries, particularly the automotive industry. We know there is a lot of back-and-forth involved. An automotive part can cross the border 50 times or so. However, if processing happens at the mine, it would ensure that our national economy is protected.
201 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, with respect to Chinese state-owned enterprises, could the member reflect on the threshold he believes might be reasonable? I believe the last committee in the previous Parliament indicated that a much lower threshold, maybe even zero, should be considered.
42 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I would like to thank my colleague from Simcoe North, a rising star in the Conservative Party. I am always interested in seeing his progress.
What is happening with China is worrisome. We know that China controls 80% of the lithium market.
If we want a strong domestic economy, since globalization is basically over, we have to be able to protect our domestic economy and ensure that our companies have the supplies they need, especially chips for building electric vehicles. We have to put ourselves and Quebec first.
90 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, I want to deviate from my original plan, to continue from the comments from the member for Abitibi—Témiscamingue. He brings up an interesting aspect to the debate on the Rona experience. That is important in a couple of contexts I want to expand on, because it was a Canadian, Quebec-based iconic company. It still has remnants today, but it was a really good sensation for not only Quebec but also parts of Ontario and other parts of Canada. The member was very astute in reflecting on the lack of information and support we got in order to guarantee decision-making as it was taken over by Lowe's.
When we think about national security, sometimes we think about weapons, intelligence and all those matters. However, sometimes we forget that our national security also includes competition in the market and access to goods and services, which we undermine by allowing foreign takeovers like that. Now a private equity firm in the United States is basically in ownership of Lowe's. This gives more of a skewed and distorted representation, when what we had was actually a Canadian iconic company that was taken over. The decision-making process, as the member has noted, was never clear to all of Canada.
On top of that, we went through the pandemic and people actually stayed at home and did renovations. We have softwood lumber shortages and we have had lack of competition in a number of different fields. We know this from the cellphone industry, for example, but we also know it through the oil and gas industry with a lack of refining capacity. The takeover of Rona is one that we need to look at and reflect on in a different way than just as a transaction.
We traditionally feel these things through the workers and those who are directly impacted at that moment, but we also have to be more complex in Canada because we are dealing with a number of oligopolies that control certain aspects of our market. Let us look at our grocery store chains, for example, where there is a lack of competition and where there was even collusion on bread pricing and fixing. We know that at the industry committee we also heard testimony that when the hero pay was ended, the grocers all talked to each other that week and decided within the same day to stop that payment to workers.
The reason I raise these things is that there is a deeper level of vulnerability in our economy because Canada is more susceptible than the United States and Europe to a lack of competition. We have a competition law that is vastly outdated. Therefore, New Democrats will be bringing amendments to Bill C-34 at committee that actually address some of these issues, and we are hoping that we will see support for that from other parties. The committee, I will note, is well led by a bipartisan effort and we have actually done some really good work. That is why I referenced earlier the work we got done in a previous Parliament and I will return to a bit later, but the process was basically usurped because of the election.
On top of that, the current minister puts forth a fair amount of legislation that has happened and is very busy. I give him credit for all of those things, but he has yet to address that in a comprehensive way. I hope that when he comes to committee to bring the bill forward, he will be prepared to deal with some of those questions, and I think he will be. We did not hear it today, but that is okay. However, the committee process will be very robust and I am looking forward to that. I am going to get into a few of those recommendations a bit later, but I want to emphasize that, just because they were in the last Parliament, this does not mean they are irrelevant. In fact, we have had to bring back a number of reports that were dealt with.
Bill C-34, officially the national security review of investments modernization act, is an act to amend the Investment Canada Act, and it actually goes back to the 1980s. It really dealt with the fact that many Canadian companies were being bought by U.S. firms and investment, and we had some of the hollowing out of Canada. There has been notation about the reviews, and right now, under the current process, about 99% are not even looked at or touched, so that has not worked at all. In fact, the act, in its modernization approach to it, has actually had a couple of amendments.
I first came to the House in 2002. Subsequently, in 2003, we did a review of China Minmetals and raised the fact that nondemocratic governments, that one being China, and state-owned companies were purchasing Canadian natural resources. What was ironic about this time period was that Canada, under Paul Martin and the Liberals, was divesting from Petro-Canada.
For those who remember Petro-Canada, we actually had a strategy and an investment in that, which was quite significant, but we divested it, shockingly. I could get into more details about that than are probably necessary here, but when Mr. Martin sold it, within six months we lost another $4 billion. We could have attained more for the assets because it went up in the market after that. That is a side story.
It also led to some of the problems we have now with a lack of competition for refining, because Petro-Canada was allowed to close refineries, the most significant one being in the Burlington-Oakville area. We have a lack of competition because refineries now produce for everybody, and that is one of the challenges that we have in the oil and gas sector.
I wanted to note that because China Minmetals and other companies under the state-sponsored flag were buying up Canadian companies. Ironically, we were divesting as a country from assets that we actually had, which was unfortunate, I think, and still is to this day.
At any rate, that brought in a push for us to ask for the security screen for that, and it is not just for China. I want to be clear on this. We are talking about non-democratic governments in general, and that is what I have been referring to, which should have an additional screen on them.
Also, something that has been missed, and I am looking forward to an amendment on this and how to address this, is the issue of private equity firms, where we have iconic Canadian companies that have been bought up by private equity firms, where we do not even know who the real owners are of some of those companies. Again, this could affect competition and a series of things, so I am hoping that this bill can look at an amendment to deal with some of those things as well. There have been a lot of challenges that we have with the ownership rules and, again, 99% are not even looked at as they are under the threshold right now.
The other thing about this bill, and I do give the minister credit on this, as he has brought it to Parliament. There have been previous amendments to this bill, in 2009 and other times, that came as part of budget implementation acts. To be fair to the government, and to be fair to the minister, when we put something through a budget, it does not get the same scrutiny that individual legislation gets.
For those policy wonks out there, and I know it is a Friday afternoon and how this place works is probably very riveting, but when it goes through a budget, the budget does not actually have all of the committee work that happens with legislation. I think that is important to note and to give the government and the minister credit for that, because now this will be referred to the industry committee, which has a history of doing some really good work.
It will get a full vetting process through this place and also through the Senate. Whatever comes out of the process we are going to go through here will get a full review, which is necessary. That is why it will be interesting, though. The challenge will be what will be admissible for amendments, what will be out of scope and what will be in scope. Those procedural things will start to work themselves through.
Again, this is the proper process to bring this through. We had warned about some of the weaknesses that we are dealing with today during the budget bill. When we talk and debate budget bills and those elements, they get washed over very quickly. That will not happen with this bill. It will have its proper due course and time in the House, in the chamber.
Again, as I noted, it will go through the other place, the Senate, and if they make any changes, then they will have to be approved by the House at the end of the day. Therefore, for the procedural elements, I think we will start on a much better footing than ever before.
That is why I am really still strongly advocating for the previous report that the committee did on the Investment Canada Act. It was over 70 pages. We heard a lot of witnesses. My friend in the Bloc did some excellent work on critical minerals, especially when we look at the province of Quebec, which has some very strategic assets for the province, and also with reflection to the rest of the country as well. We are going to be part of a strategy for auto and, as well, other types of battery modernization. That is critical.
There are a lot of issues to be dealt with and unpack there. I think one of the things that we look at in this bill is, again, the threshold. There are two areas that the act really kind of focuses on. The net benefit would be, if the takeover takes place, whether there will be an improvement in the Canadian economy and the workplace, and it is very subjective about that. That has been whitewashed many times before.
I will give another good example, and I am showing my age here again, with Future Shop versus Best Buy. Essentially, we had two consumer electronics marketing platforms in this country, and Best Buy basically bought up Future Shop, another Canadian iconic company, and we now have less competition, less innovation and less access for the public to access some of the services that are necessary.
I know we like to buy a lot of things online right now, but especially when it comes to the maintenance and repair of electronics, we still require certain services. Future Shop is gone now, which basically affects competition. I think that Best Buy's only competitor is really the online stores now; maybe Staples and a handful of other stores still compete with us. However, this was approved and we lost Future Shop.
The other case I want to refer to when we think about strategy, which is frustrating for me, is Zellers. If people remember Zellers, it was another iconic Canadian retail store. I put forward then, and I think the government needs to reflect on its approval of this takeover, that it had higher wages, a union, benefits, and at a time when the industry was losing money, a profit margin. Then the American store Target was allowed to come in. Target took over some stores and closed others. It then exited the country. This was basically done to eliminate competition, and it eliminated jobs as well.
I do not know what it was like in other stores, but in Windsor, it was ridiculous when Target came in. I was a goalie in hockey, but I am retired now because of my knee and a lot of other reasons. Hon. members have also reminded me of my goals against the average. At any rate, Target had multiple aisles of just one hockey stick, so it was a false takeover. These are serious things because we lost not only those jobs but also competition in a market where we have seen diminishing retail assets. It was not just about the store; it was also an anchor for other malls and shopping centres. What I am getting at is that there are many ways of looking at this.
When we have this review in Parliament, it will be interesting to see what we get regarding the capability to expand the current form of the bill. I am not sure what is going to be ruled in or out of order for some of the amendments I have. However, it will be interesting, and I am sure my colleagues will have some of those things.
One important point about the bill, and I want to talk about a couple of things that I think are important, is that a notification process would be used. Therefore, the minister would get more of a heads-up about takeovers. For me, and I think it is also fairly safe to say for some of my colleagues from the Conservatives, the Bloc and perhaps the Liberals, we will probably want more reviews or access to reviews. In my opinion, that would provide a benefit for the process. This is also going to be important when we are looking at some of the more serious innovations that we have coming forward and certain companies.
One of the things that sticks in my craw is when we have Canadian taxpayers giving money to corporations, and because there are no rules, the corporations move the innovation out of the country.
I will give a quick example. Former minister Bains, whom I enjoyed working with in this House and this chamber, gave money to Nemak, an auto manufacturer from Mexico in Windsor. Nemak had bought out a Ford assembly provision. It got money for the innovation for a transmission. This was the only Canadian facility. When this was announced, I asked what guarantees the government had that it was going to keep the work here. The government said that there was no problem and it was all taken care of. I asked how. The government said that it was done and not to worry, and that was the end of it. What ended up happening is that Nemak was a terrible employer. Not only that, but it did the innovation in the Windsor plant and then moved it to Mexico and closed the Windsor plant. We had to fight, including in court, to protect the workers' pensions and the money that was owed to them. I will not give the government credit for that, because it was horrible in this case; we had to take it to court as well.
I have seen enough of this in my community in the auto sector. I know this personally. My brother worked for Windsor Plastic Products. A foreign company took it over and took not only all its assets but also its money for the United Way and employment insurance. It basically took everything it could out of this country. We have seen this take place a few times. Nemak got the Canadian taxpayers' money and did the innovation. Now we are giving auto supports to other companies to compete against the product that was produced at our expense and is now built in Mexico. It makes no sense.
There has to be something in this act that is going to deal with some of these things. Maybe that is where we get more transparency with regard to any type of endeavours that the minister is allowed to do, so that the bill does have that, where the minister can put more specifics on it.
As noted earlier, some of the smaller companies we have can actually be some of the most critical. We spend a lot of money for SR&ED tax credits. They are for research, development and so forth. Those all have to become public if a Canadian company is going to be taken over by any foreign company, whether it is a state one, a non-state one or a private equity firm. I think we have the right to know if Canadian taxpayers' money has been used, whether through tax relief or innovation support, which are excellent and I support a lot of those things. There should be no shyness when one is going to the taxpayer to ask for support for a business. It has to be disclosed later on. There should be a full review. That is one of the things that can be reviewed publicly.
This legislation also creates another process for judicial review that will be behind closed doors because some of the information can be challenging for the government and the company to deal with as it involves security.
When I talk about security, I want to highlight the transition we are seeing right now in some of these small and medium-sized companies. I would like to see greater reviews on them because they deal with privacy and intellectual property. We are getting into artificial intelligence, for example, and we are actually subsidizing quite a bit of innovation on that front. I think there needs to be full disclosure for those things, to at least notify us that the money went in there. Maybe we do not know all the types of products and services that are being done, if there is sensitive information, but at least it can be noted that they received taxpayer funding. I think that would give us more confidence when it comes to this issue.
When we think of these Internet-type services and other things that are taking place right now, we have had some referrals stopped. We had MacDonald Dettwiler, and I want to thank Peggy Nash, former member of Parliament for Parkdale—High Park, who did an amazing job in this chamber stopping that takeover. The other one we fought against, and thank goodness it was stopped, was for potash, another highly publicly subsidized company, but also a natural resource that is very important in Canada. When we think about the critical minerals in the upcoming years in the auto sector, we need to be mindful of that.
Microchips were referenced in previous discussions by members from the Conservatives and the Bloc. We used to be the producers for the world in the Mississauga area. Then we allowed this to be outsourced to Taiwan quite a bit, and now the United States is into massive subsidization. We are doing some investments now too. We need to make sure that we have a long-term plan for those things.
When certain industries get a certain amount of money from the public, we should be looking at some rules and regulations on time frames once they get significant public income. That should be reviewed and mandated to have a different threshold.
Other countries have been dealing with this issue as well. Japan has brought in some new legislation, as well as Australia and even India when it comes to its land borders with other countries and investments. They brought in some new rules, as did the European Union.
I do appreciate the fact that this is coming through the chamber this time. Many times during the budget debates, my responsibility for the New Democrats was to challenge the fact that the government was doing it through a budget process and it rubber-stamped it. We are in this situation for a reason. It is because we did not do the right thing.
This is a start to do the right thing. When this does get to committee, I look forward to a co-operative process and hopefully we can do some comprehensive reform.
3359 words
- Hear!
- Rabble!
- add
- star_border
- share
Mr. Speaker, my hon. colleague across the way and I actually worked together in a previous Parliament on the industry committee. We tabled a report last Parliament with respect to this issue.
I would like to offer the member an opportunity to share with the House some of what we heard when we studied this in the 43rd Parliament that he would like to see implemented in this bill.
69 words
- Hear!
- Rabble!
- add
- star_border
- share
Madam Speaker, I am so pleased that my former committee chair is here, who did a remarkable job. Our current chair is good, too. With all sincerity, the committee operates well, and she has a particularly good history with it, which includes this report that I referenced and that has her name on it.
We heard a lot of really good testimony, and that is why it is 74 pages long. There was a very robust approach to it. One of the recommendations was a simple one, and I think this is appropriate. Recommendation number two is as follows:
That the Government of Canada introduce legislation to amend the Investment Canada Act so that thresholds are reviewed on an annual basis.
A simple one like that could be done as a routine procedure for what we do. There are other more comprehensive recommendations. There were seven recommendations with a couple of subsections as well that have not been done. There were nine in total, and I look forward to working on those. Again, I thank the former chair for her work.
181 words
- Hear!
- Rabble!
- add
- star_border
- share
Madam Speaker, I appreciated the speech by my colleague from Windsor West, who I enjoy working with on the industry committee, and the former chair who did marvellous work on it. It is a great report. My personal favourite is recommendation number one, which is that the state-owned enterprises be reduced to zero for review.
The Investment Canada Act focuses on the acquisition of companies. However, it does not focus at all on the acquisition of individual assets. These would be things like a mine sold by a company to a foreign interest; or a technology sold, without the company being sold, to an interest that may not be in Canada's best security interest or net benefit interest. I do not recall hearing about this. Could the member comment on that?
133 words
- Hear!
- Rabble!
- add
- star_border
- share
- menumenu
- notificationsnotifications
- home
- mailmail
- searchsearch
