44th Parl. 1st Sess.
November 6, 2023 11:00AM
Madam Speaker, I know my colleague from Calgary Centre has done a lot of good work in the area of mergers and acquisitions throughout his career. I would like him to comment on what we are actually debating today that some members in the NDP-Liberal coalition do not seem to want to talk about, which is the removal, in the bill, of cabinet from the decision-making process.
Given that my colleague has sat at C-suite tables and board tables, and I know he understands how cabinet works, does he not think decision-making processes in the area of foreign takeovers would be much enhanced by the collective decision-making of a management team, a board or a cabinet as opposed to letting one lone minister make the decisions?
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Madam Speaker, that is the crux of what Conservatives see as being wrong with the bill. It has been led by our industry critic, who just spoke. That is what we need to change more than anything else in the bill: to make sure collective decision-making is happening at the cabinet table. We cannot have one person from one region of Canada deciding what happens to a company that might exist in another province of Canada, without input from people at the cabinet table who might have differing perspectives on it as far as how it affects the country, whether in finance, transport or defence. All of these things have to be taken together in collective decision-making.
That is what we have in Canada right now, and that is what the bill is trying to usurp. This has to change. Conservatives are trying to get that out of the bill, and I thank my colleague for bringing that forward in a very strong amendment. I hope the House considers that amendment very strongly and we can get back to the way democracies function in this regard.
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Madam Speaker, one of the amendments in committee that was defeated by the Liberals said that any takeover in Canada by a corporation whose headquarters are resident in Beijing would be automatically reviewed. The Liberals voted against that for some reason, perhaps because Beijing's government is most admired by the Prime Minister.
I am wondering whether the member could comment about what would possess Liberals to oppose an amendment that would force an automatic review.
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Madam Speaker, I do not know where the government is going on this. It is obvious that for years, we were looking at transparent decisions made with the market. Unfortunately, a lot of acquisitions happen in the market around the world by foreign actors that are state-owned enterprises. Those require oversight because, frankly, state-owned actors have a different way of doing business than businesses—
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- Nov/6/23 5:44:07 p.m.
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We have to resume debate.
The hon. member for Charleswood—St. James—Assiniboia—Headingley.
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Madam Speaker, I am honoured to rise today to speak on Bill C-34.
Before I do, I would be remiss if I did not talk about the calamitous vote the Liberal members of this House took earlier today by excluding all Canadians from being treated fairly by pausing the carbon tax for Canadians all over the country. I come from Winnipeg, one of the coldest cities on the planet. Today, Liberal members from Winnipeg said no to Winnipeggers, while their Atlantic Canadian counterparts seem to be more effective than they are. They have the ear of the Prime Minister who I suppose was trying to save himself from his terrible polling results with this desperate measure by the government. However, at the end of the day the Liberals chose not to pause the carbon tax pain, which is really unfortunate for all Canadians.
As far as Bill C-34 is concerned, I want to say this. After eight years of the Prime Minister, numerous foreign state-owned enterprises have acquired interests and control in many Canadian companies, intellectual property, intangible assets and the data of our citizens. The government is doing too little, too late to protect our national economic and security interests with this bill.
Since the Liberals came to power, business investment per employee in Canada has dropped 20%. At the same time, business investment per employee in the United States has increased 14%. Per capita growth is at the lowest level since the Great Depression some 90 years ago and Canada has the most at-risk mortgage default portfolio in the G7. According to the National Bank of Canada, for the first time ever, business investment is now lower in this country than housing investment. When we think about all the manufacturing, oil production and everything else, investment in those things is lower than it is in housing.
The goal of the Investment Canada Act is to deal with foreign investors controlling Canadian industry, trade and commerce. Foreign direct investment creates opportunities, stimulates economic development and introduces new ideas and innovation to Canada. For Canadians, this means more high-quality jobs and a stronger, more sustainable economy.
Billions of dollars of Canadian natural resources, ideas, IP and land are being controlled by foreign entities. Huawei, a state-owned enterprise that feeds intelligence directly to China, was still working with many Canadian universities as of this past summer.
Another example would be taxpayer-funded dollars at Dalhousie University that are funding Tesla intellectual property and research and that IP is all going back to California.
In 2017, the Liberal government allowed a telecom company from British Columbia called Norsat to be acquired by a company called Hytera, which is a Chinese-based state-owned company. Conservatives demanded at that time a full national security review. The Liberal minister of the day refused to do one and approved the acquisition.
This sort of lax attitude toward issues of national security is clearly a problem. After eight years of the Prime Minister, numerous foreign state-owned enterprises have acquired interests and control in many Canadian companies, intellectual property, intangible assets and the data of our citizens.
The future of Canada needs to be protected in the airwaves, AI and quantum computing. It needs to be protected in our farms, food-processing plants, oceans and fisheries, as well as in developing Canadian LNG, which the world so desperately wants. The government is doing too little to protect our national economic and security interests with this bill. Canadians know the Liberals do not take sensitive transactions seriously and have failed to fully review transactions involving Chinese state-owned enterprises, putting the security of Canadians and the government at risk.
The minister is the minister of broken bills, which is why Conservatives are having to make more amendments to this piece of legislation. On his other bill, Bill C-27, the digital charter implementation act, after a year and a half he was forced to make amendments.
The Liberals missed the chance to think big and understand what is going on in the Canadian economy. This bill does not go far enough to address the risks faced by Canadians. That is why Conservatives worked to pass four significant amendments to ensure a rigorous review process—
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Madam Speaker, I rise on a point of order. Conservatives go to great lengths to remind us of the ruling that was made by the Chair recently on what is expected with respect to decorum. In particular, one of the things the Speaker identified in that process was using fake names for people in this House. Therefore, when the member makes comments like the “minister of broken promises”, or whatever he just said, he is clearly violating the rules that you have put in place and I would ask you to ask him—
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We do not want to repeat what is incorrect.
The hon. member for Charleswood—St. James—Assiniboia—Headingley.
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Madam Speaker, in the House, I think the Speaker was asked a very similar question and said he has relented on that position.
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Let us try to be respectful and judicious in our comments.
The hon. member for Charleswood—St. James—Assiniboia—Headingley.
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Madam Speaker, the Liberals missed a chance to think big and understand what is going on in the Canadian economy. This bill does not go far enough to address the risks faced by Canadians.
That is why Conservatives worked to pass four significant amendments. For instance, Conservatives ensured that the threshold to trigger a national security review was reduced so that Canadian resources, including intellectual property, are safer.
Among the changes proposed by the government in the bill is the removal of mandatory consultations with cabinet in determining whether an investment is a threat to Canada's national security. This change is problematic given the number of state-owned investments made in Canada over the past eight years that have not undergone a security review because of decisions made by past industry ministers. By removing cabinet from the process, decisions over whether an investment is considered injurious will receive less debate and scrutiny.
These are decisions that should have a national perspective that only cabinet could provide. Foreign investments often have national impacts on our economy and on multiple regions. To leave the discretion in the hands of one minister from one part of the country will negate a broad national perspective. It is a problem that this bill is only as strong as the minister's scrutiny, whoever the minister may be in the future. Conservatives believe matters of such importance should be scrutinized by all of cabinet to make sure nothing slips through the cracks.
As I mentioned, one Conservative amendment that was approved at committee was about reducing the threshold to trigger a national security review from $512 million to zero dollars for all state-owned enterprise investments made in Canada. Lowering that threshold was critical so that at least it would trigger and initiate a security review.
Another Conservative amendment that was passed would ensure that items reviewable under the national security review process include acquisitions of any assets by a state-owned enterprise. Until now, the review only applied to acquisitions of the controlling shares of an industry. That was a huge loophole, as it opened the door to circumvent a review where a deal was structured as an asset purchase. For example, buying the shares of a mining company could be reviewed but buying the mines themselves could not. This is a welcome change.
Another amendment would ensure that an automatic national security review is conducted whenever a company has previously been convicted of corruption charges. Another change would require the minister to review any investments or acquisitions made in Canada that exceed $1.9 billion in enterprise value instead of it being an option.
Conservatives could have improved this legislation further had the NDP-Liberal government not rejected many notable Conservative improvements to this legislation. Among the common-sense Conservative amendments that failed to pass committee was one that would have modified the definition of “state-owned enterprise” to include any company or entity headquartered in an authoritarian state such as China.
Another amendment that was defeated would have exempted non-Canadian Five Eyes intelligence state-owned enterprises from the national security review process to prevent any overly broad review processes. Another amendment would have ensured that an automatic national security review is conducted whenever a company has previously been convicted of corruption charges. One other amendment would have implemented a requirement for the minister to trigger a national security review automatically whenever the investment review threshold was triggered. The last would have required the minister to conduct a national security review by changing the word “may” to “shall” to ensure a review would be triggered whenever it is in the new threshold.
It is important that we get this right. Recently at the ethics committee, there was a study on foreign interference and the role that nations, particularly China and Russia, are playing as state-owned actors in making investments in our economy for the purpose of control, including controlling Canadian businesses, Canadian minerals, Canadian resources and, in many cases, some of our northern and offshore areas.
Therefore, it becomes critically important for the government to keep a keen eye, and multiple eyes in fact, on what is happening with foreign investment and approvals. We believe that Conservatives have improved the bill dramatically. We are trying to improve it again in the spirit of good public policy for Canada and protecting our economy against hostile interests, which the Liberals seem not to be that interested in.
I urge the House, including all members of the Bloc Québécois, the NDP and the government, to recognize that cabinet's decision-making process is essential to understanding the national impacts of foreign investment. I urge members to vote for our amendment. By removing clause 15 from the bill, all security review decisions would remain reviewable by cabinet and not just by the ministers of industry and public safety. This is all about protecting Canadians and protecting our valuable assets, our businesses, our national security and certainly our interests.
We must take sensitive transactions seriously, and we have failed to fully review some transactions, particularly as they relate to Chinese state-owned enterprises of the past. A Conservative government would not only protect Canadian investment but build Canadian companies and attract investments to grow them.
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Madam Speaker, we know that Parliament significantly reformed the ICA in 2009. That was of course done under a majority Conservative government led by Prime Minister Harper. At that time, a very ill-advised step was taken. The Conservative government raised the thresholds that would trigger a net benefit review of an investment under the act and eliminated most sector-specific requirements, with the notable exception of cultural businesses. At the same time, Parliament enacted provisions that granted the federal government more extensive powers to screen and potentially block any foreign investment that could threaten national security.
Does my hon. colleague know how many investments have been blocked since 2009 under the foreign investment national security criterion?
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Madam Speaker, I always find it interesting that the NDP is stuck in the past. Its members want to keep talking about the last Conservative government or Mr. Harper. My recommendation is that the member and his party start thinking about their future, because it is dismal to tie their wagon to this calamitous Liberal government.
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Madam Speaker, I would like to give the hon. member an opportunity to comment on the issue we are debating, which he did extensively. A lot of the questions from the government and the NDP are not about what we are debating today, which is whether cabinet should be included in the decision-making process.
I would like the member to comment in particular about the members from the Bloc, who seem to think it is okay for cabinet to be eliminated and therefore have no Quebec input on acquisitions made of Quebec companies. Does he thinks it is hypocritical of the Bloc to not express itself on whether it thinks cabinet decision-making should be there in any foreign takeover of a Quebec company?
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Madam Speaker, it is a very large concern. One person should not have that much power in a democratic government, period. For example, let us say that the minister of the day is from Ontario and a foreign investor wants to come along from an authoritarian state and spend $30 billion buying a Volkswagen electric battery plant. The minister from Ontario would be under a lot of pressure to allow that type of investment to proceed, but it might not be in the national interest. That is why it is important to have multiple perspectives at the table when decisions are being made about investments that are national in scope and could have major effects on our GDP, our economy and our national security.
I agree that the Bloc is being hypocritical on this. It should support our amendment.
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Madam Speaker, is the member saying that because a minister might be from one province, they would not have the capacity to represent the entire country and the interests of the entire country? Are we led to believe it is impossible for somebody who represents one particular region to represent the entire country? Is that not how we have been operating since Confederation?
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Madam Speaker, I question the capacity of every minister in the government.
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Madam Speaker, I am very pleased to rise to speak to this bill for the second time. Last February, I gave a speech on Bill C-34, an act to amend the Investment Canada Act. At the time, I talked about the many problems with this legislation and our intention to improve it in committee. I will come back later to the amendments we proposed. Some of them were adopted, while others were, unfortunately, rejected. I will start by talking about the genesis of this bill.
In the December 2021 mandate letter given to him by the Prime Minister, the Minister of Innovation, Science and Industry was asked to do the following, and I quote:
Contribute to broader efforts to promote economic security and combat foreign interference by reviewing and modernizing the Investment Canada Act to strengthen the national security review process and better identify and mitigate economic security threats from foreign investment.
I have to say that that was a legitimate request. Recently, there have been far too many cases where Canada's national security was potentially compromised because of the acquisition of Canadian businesses by foreign interests that are a bit too close to the central power. An update was more than welcome.
I sit on the Standing Committee on Industry and Technology. I would like to commend my Conservative Party colleagues, who are doing admirable work on the committee. I see it every week. Over the past two years, we have looked into several of this government's missteps regarding transactions and contracts that could compromise our national security.
One of the most recent examples is from 2017, when the Minister of Industry failed to request a full national security review of the acquisition of telecommunications company Norsat International and its subsidiary Sinclair Technologies by the Chinese company Hytera Communications, which is partly owned by the People's Republic of China. This is just one of many examples.
After eight years of this government, too many foreign state-owned enterprises have acquired Canadian companies, intellectual property, intangible assets and citizens' data. Rather than taking the situation seriously, the minister is giving himself more powers with this bill and not making up for the negligence that allowed the contracting incidents involving Zijin Mining, Hytera and the RCMP to happen.
A few weeks ago, during study of the bill in committee, security experts were invited to highlight the acquisitions that were not subject to a national security or net benefit review, even though the threshold under the Canada Investment Act had been met. Other witnesses pointed out the evolution of the dynamic of the Chinese private sector economy and the fact that many Chinese businesses operating on an international level are now beholden to the demands made by the Chinese Communist Party, even though they are not directly controlled by the state.
Charles Burton argued in favour of a stricter review framework for state-owned enterprises entering into Canada, including those belonging to the private sector who have their head offices in authoritarian countries like China. We proposed an amendment to that effect. We asked that the definition of state-owned enterprise be reviewed to include private enterprises that have their offices or their head offices in an authoritarian country. Unfortunately, that amendment was rejected. The definition of state-owned enterprise therefore remains too vague in our opinion.
Another point raised by witnesses was the need for greater clarity on which sectors should be considered strategic in order to ensure a more consistent review process. Professor Patrick Leblond argued that establishing a list of specific sectors necessary to ensure national security would prevent the review system from becoming entirely politicized. Knowing what we do about this government, more safeguards are needed.
To sum up what we studied in committee and what the witnesses told us, it is safe to say that this is too little, too late. There are too many flaws in this bill. It appears that this government is not taking sensitive transactions seriously and is not doing the necessary due diligence, putting the security of our government and our citizens at risk.
The most significant change this bill makes is the power that the minister is giving himself. I think this is unacceptable, which is why we introduced the amendment we are discussing today. Under the current act, the minister must submit to cabinet his intention to conduct a security review when a foreign interest acquires a Canadian company. Cabinet must give its approval.
In the bill before us, the minister gives himself the power to decide whether to conduct a security review with the consent of the Minister of Public Safety, but without cabinet approval. Only two ministers would be responsible for decisions with potentially very serious repercussions. Imagine two Ontario ministers deciding the future of a Quebec company without any other Quebec cabinet minister having a say in the matter. I hope that my Bloc Québécois colleagues are listening to me carefully and that they will vote in favour of our amendment. We know that this Liberal cabinet has made some very bad decisions, but this is a safeguard that needs to stay in place.
Here are a few more examples of the changes we were able to make to this bill, which was overly flawed. We secured a reduced threshold to trigger a national security review for all state-owned enterprises. It went from $512 million to zero dollars in asset value for companies not listed as trade agreement investors. This ensures that all investments made by state-owned enterprises will be reviewable. We also implemented a requirement that an automatic national security review be conducted whenever a company has previously been convicted of corruption charges.
We managed to add another factor to ensure that the elements reviewed as part of the national security review process include asset acquisitions by state-owned enterprises, not only new business locations, share purchases and acquisitions.
Finally, we implemented a requirement for the minister to conduct a national security review each time the investment review threshold is reached. Simply put, this amendment requires that the minister review any investments or acquisitions made in Canada that exceed $1.9 billion in enterprise value instead of it being an option.
The amendments that we proposed sought to create a more robust review process. We could have made even more improvements to this bill, but unfortunately at least seven of our amendments were rejected.
We are talking about national security here. This government did not take some of our issues and concerns seriously, and that is extremely important. For example, we sought to authorize the government to go back and redo a security review for Canadian businesses acquired by state-owned companies to allow for a more flexible process. The Liberals rejected our proposals.
As I said earlier, this government's desire to address the matter of national security is too little too late. The dynamic between nations is changing, and the future is uncertain. The Government of Canada must be more vigilant than ever. On this side of the House, we have always taken the matter of national security seriously, and Canadians can count on us to ensure that it will be a top priority in the future.
I want to once again add that I sincerely thank my colleagues on the Standing Committee on Industry and Technology, because they have a very good reputation and do outstanding work to ensure our country's national security.
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Madam Speaker, I enjoy serving on the committee with that hon. member, who does amazing work and has worked very hard on this bill.
I know one puzzling thing is that, as we are here in report stage actually debating a further amendment to the bill that we proposed, somehow, we have not heard from the Bloc Québécois on whether they believe that the minister, on his or her own, should be able to make the decisions on a foreign acquisition of a Quebec company, without any input from cabinet colleagues in Quebec. That is the change the government is trying to make to the bill, removing cabinet from the process, which could potentially remove Quebec from any input in the decision-making on a foreign takeover.
Could the member comment on why we have had such silence from the Bloc on this issue?
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Madam Speaker, I agree with my colleague. It is quite incredible to see the Bloc Québécois aligning itself with the government again today to vote against an opposition motion to remove the carbon tax on all types of home heating.
The Bloc Québécois is in an odd position here, because we are proposing an amendment that would keep us—
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