That, in the opinion of the House, since the recent takeover bid for Potash Corporation raises concerns about the adequacy of the foreign investment review process under the Investment Canada Act (ICA), the Government of Canada should take immediate steps to amend the Investment Canada Act to ensure the views of those most directly affected by any takeover are considered, and any decision on whether a takeover delivers a “net benefit” to Canada is transparent by: (a) making public hearings a mandatory part of foreign investment review; (b) ensuring those hearings are open to all directly affected and expert witnesses they choose to call on their behalf; (c) ensuring all conditions attached to approval of a takeover be made public and be accompanied by equally transparent commitments to monitoring corporate performance on those conditions and appropriate and enforceable penalties for failure to live up to those conditions; (d) clarifying that a goal of the Act is to encourage foreign investment that brings new capital, creates new jobs, transfers new technology to this country, increases Canadian-based research and development, contributes to sustainable economic development and improves the lives of Canadian workers and their communities, and not foreign investment motivated simply by a desire to gain control of a strategic Canadian resource; and that the House express its opposition to the takeover of Potash Corporation by BHP.
He said: Mr. Speaker, I am pleased to rise in the House today to debate this important topic. I will be sharing my time with the member for .
New Democrats believe it is time here in Canada that we took strong stands on the issue of foreign investment and, in particular, that it is the 's job to make sure Canada benefits from foreign investment. The litany where this has not been the case is a tragic one: Inco, Alcan, Falconbridge, Stelco, Nortel. These Conservative fire sales have not benefited community. Instead they have left workers out in the cold, having been thrown off the job despite promises made by both the government and the companies involved.
Think of the communities of Sudbury, Timmins, Hamilton, Miramichi, Kenora, Thunder Bay and Vancouver Island, whether it is mining or whether it is the wood sector. In many others, workers have been left without an income for their families. That has been the consequence of the government's unwillingness to stand up to these multinational corporations, which come in here and want our resources, want to make a play in the global market and want to put our jobs offshore. They have any kind of nefarious plan up their sleeves, and the government has gone for it hook, line and sinker. That is until the people of Saskatchewan rose up and joined in a chorus to say no, and we are thankful that they did so because the government has left local economies deflated, people without their jobs, pensions attacked and collective agreements shredded by these companies.
The NDP is not opposed to foreign investment, but it wants to ensure that it is good investment, investment that creates jobs in innovative areas, that promotes sustainable practices and that produces other benefits that Canadians are looking for.
When it comes to selling major Canadian companies, we believe that Canadians need to know how the sale will benefit them. But that will not happen as long as the Investment Canada Act is not amended.
Right now, decisions are made behind closed doors. Government does not have to tell us. We are just supposed to take its word for it when it approves these takeovers, and frankly, Canadians are left in the dark when it comes to the future of their natural resources, their jobs and key industries in our economy.
Ottawa does not have a good track record on this, when it comes to the question of trust. In the last 25 years, between the two governing parties, they managed to reject only one bid while they rubber-stamped 13,500 takeovers and investments.
The conditions that the government claims it is putting in place clearly are not enough. They are just as quickly ignored as they are put down on paper. The government's signature, it turns out, does not really mean much when it comes to defending Canadians' interests.
That has to change.
The chairman of Sherritt International, Ian Delaney, said, and I quote, "Canada has squandered its title as the centre of global mining finance.”
Neither the Liberals nor the Conservatives would intervene when Inco and Falconbridge were in trouble. They made no effort to help them, to work together or to ensure that the companies would be successful and jobs would be protected.
They simply left it to the foreign investor to come walking in with every kind of siren call and every kind of promise, and they signed off on it. We have to wonder if they even looked at the paper they signed.
However, I will tell members one thing. When the pink slips went out and people saw that signature and had to go home to their families and tell them they had lost their jobs after they had been offered hope by the government, which said it was approving this foreign investment so that we would have a better economy, that was a tragic day and each of those families has suffered as a result. We are talking about thousands of people who are facing a very cold winter as a result.
We have to fix this. If we just think about the thousand workers who have been laid off at Stelco, in Hamilton, I think members will know what I am talking about.
We have an act dealing with foreign investment that is not working. Let us be crystal clear about this. It is not working. Of course when we raised these complaints, the government just simply railed on with its ideological phraseology instead of taking to heart the kinds of implications that are meted out to people in this country by these decisions.
That is why, as a result of all this, the people of Saskatchewan said no. If they had not been able to watch what happened in Sudbury, in Timmins and in the forestry communities across this country when takeovers took place, they would not have been so concerned. However, they saw the record of the current government and they said we cannot let that happen here with potash. That is what they said.
Dwain Lingenfelter, our NDP leader in Saskatchewan, raised these issues forcefully in the legislative assembly. I have to say that the government there, at the time, ridiculed the idea that there should be any concerns about a foreign takeover. That is just exactly what we saw here, in fact, when we raised questions. The sloughed it off by saying, “Oh, well. It's just an Australian company taking over an American company. Who cares?” That is virtually what he said. Who cares? It turns out that the people of Saskatchewan care and the people of Canada care. That is why we need to take action here today. That is what this is all about.
Several provincial premiers from all parties have come out firmly against it. Members of Canada's business community have publicly warned the , and this is not the first time they have done so.
Dick Haskayne, the University of Calgary board chair emeritus, for whom its business school is named, also a Potash Corporation shareholder, says he is absolutely opposed to this takeover. He says it is an issue of giving up a large inventory of our strategic natural resources. Once those resources slip through our fingers, they are gone for good. We are not going to get them back.
Today we are moving a motion that would help Canadians believe that their government is acting in their best interests and that would give a little political common sense to a government that blindly upholds free market values.
We can amend the Investment Canada Act, make the process more public, more transparent, more accountable and demand that governments prove that there is in fact a net benefit at the end of the day.
How do we do this?
First, our motion says to make the process more public. Second, commit to transparency so that Canadians can see the full reasoning. We are still completely in the dark as to the reasoning behind the decision of the government on potash so far. Finally, be clear about what that net benefit is: jobs, technology, research and development, sustainable economy. Let us make sure that the list with the specifics is public and available to Canadians, because if the government is not going to police these companies, Canadians will be able to police these companies and make sure the benefits are there.
It is good discipline, and there are some very good managers in some of these companies here in Canada. They are trying to do the right thing, but often their head office somewhere far away, motivated by shareholders who want to squeeze every dollar out of the global operation, end up saying to the Canadian manager, “Sorry, we are shutting you down”. If he or she is able to point to the agreement with the people of Canada, which is public and the Canadians are watching, this can have an impact. It is moral suasion backed up by law, and that is what we need.
We are calling on this government to prove that there is a net benefit, first by making the process public and second, by committing to transparency so that Canadians can see the reasoning behind any decision. Lastly, we are clearly defining what we mean by “net benefit”: job creation, technology, research and development, a sustainable economy and so on.
Multinational bids on our natural resources are not about to stop anytime soon.
The NDP believes it is time the Conservatives understood the difference between hostile foreign takeovers that are nothing more than an attempt to control our natural resources and foreign investments that create jobs, innovation and sustainable practices for our country.
I will close with this, as the motion does.
Our motion calls for the House to reject the proposed takeover of the Potash Corporation as proposed by BHP. We think governments should be obligated to clearly demonstrate that the foreign investments will benefit Canadians and that the sanctions are there if they do not.
That is the import and content of our motion. We hope all members of this House will join in supporting it, because that way we can move forward with good foreign investments and reject the bad ones.
Mr. Speaker, it is a privilege to rise in support of the motion put forward by the member for .
To validate some of what he has said already, we only need look at some of the public commentary not just from those who have been advocating for a number of years to shed some light on this issue, but also from people who are not normally in the NDP's corner.
Professor Joseph d'Cruz of the University of Toronto's Rotman School of Business, who said that he is not normally sympathetic to the NDP, said today:
I'm in grave danger of agreeing with the NDP. But on this one, I think they're on the right track. I think having public hearings is pretty healthy. I've always been a bit concerned that the commitments that the foreign companies make to Investment Canada are confidential and the public doesn't know what they are. On an important public policy issue, I think confidentiality is not healthy.
This is critical because the Investment Canada Act has command over many different jobs, not only jobs controlled by domestic companies and foreign companies, but value-added jobs that are critical for a modern economy to function.
Canada is offside with the Investment Canada Act. This act was put in place in 1985 and since then we have seen wholesale sell-offs of a number of different industries.
It is important to recognize that the act was recently undemocratically reformed through a budget bill. The Conservative government commissioned the Wilson report, which came up with a series of recommendations. The government included them as part of a budget bill. Because the Liberals felt squeezed at the time, they voted with the Conservatives. The result was that the Investment Canada Act was changed without any review whatsoever.
The motion put forward by the member for calls for a process that had been skipped over, which is amazing when we think about it. With world consolidation of natural resources, minerals and other types of businesses, we actually turned away the opportunity to update and modernize our law in a democratic way. A debate in the House of Commons, such as the one we are having today, should have been held before the Investment Canada Act was changed because the changes made to the act actually opened the door even further.
The business community and others were left out of hearings.
We need to listen to the stories told by the people in Sudbury who were thrown out of their jobs and went on strike because they had to fight for their nickel bonus. A Brazilian company was slapping down on them. They did not get a chance to have their say.
We did not hear from the investment community which looks at the significance of the investments on the stock market and the trading opportunities that are created when these types of things go back and forth. We did not hear from people in the investment community.
The government told everyone in Canada that it can take care of everything, that everything is under control. The government did not change the law democratically. It decided to ram it through. That is an American style of politics the Conservative government has used on several occasions, and it is really hurting this country. The government has done that with a number of budget bills. We never saw that practice before. We have been raising the alarm constantly about this.
I want to correct the record on a number of important timelines. It is critical that Canadians understand that although this issue has come to a head recently, it has been in the press in the past and we have raised this issue before.
On August 18 the federal NDP member for raised this issue in a press release. I want to thank him and the member for . I had a chance to visit their communities and meet with the workers who were on the picket lines. I heard about the problems they faced as ordinary Canadians. For over a year they struggled to make ends meet.
That was the result of a takeover. Instead of a Canadian champion being created out of Inco and Falconbridge, the Conservative government decided to sell out to foreign companies and it made sure it did so in secrecy.
We have been hearing the brag about the fact that the government turned away one case, the MacDonald, Dettwiler case. I would like to thank Peggy Nash for her hard work in making sure that company stayed Canadian. If she had not done all the necessary work, that company would not have stayed Canadian. She was the driving force behind that.
The Conservatives brag about going through a court case with respect to U.S. Steel. That is not a victory. To describe as a victory a company being taken to court because it shut down operations is bizarre at best.
How is it great to be able to brag about the fact that we have lost value-added work and that people have to haul their business partners off to court? What kind of a message does that send? That is very significant because there have been thousands and thousands of takeovers in this country and we have not been able to see the terms and conditions.
There have been opportunities along the way. We could have committee hearings. There are a number of ways we could get access to some of the documents. Any sensitive documents would not have to be made public, but there needs to be light shed on the process. There needs to be accountability and follow through.
This file continued throughout the summer and into the fall. It is interesting because back on August 20 the NDP leader was already calling on the to take action on this file and to show leadership. We never saw that. At the end of the day yesterday, sadly, the minister told the Canadian public that his officials have no opinion. When there are 11 people in a department reviewing these files, one would expect they would come back with an opinion, yes or no.
Obviously, there are some political tactics behind that. We know the government refuses to take advice from bureaucrats on a regular basis. One example would be Statistics Canada. We lost the chief statistician because the government tried to manipulate his words.
The government comes back with no recommendations from the department and then claims it is not in the best interests of Canadians but it cannot provide any further information. It has left the door open for another 30 days for the Potash Corporation deal to go forward. It is true it is the letter of the law that 30 days are available, but there seems to be a bit of glee in the minister's appeal to come back with different conditions. I am not convinced that this file is finished by any means.
The job for the people of Saskatchewan and Canada who want to see a different vision is not done. We will stay vigilant on this. We will continue to raise these issues because it is more than just this one case. This is about the sell-off of Canadian industry and the lack of an industrial policy for Canada. Brazil, China and other countries are looking to acquire natural resources in different types of sectors to facilitate their modern economies. Canada's plan is to sell out, to get rid of some of the most important features that we have been strong on.
Not only should members listen to the words of the NDP, but they should listen to the experts in the field. Let us look at some of the commentary in the Financial Times:
Could Barrick [a Canadian company] take over Norsk Hydro? Shenhua Coal? Rio Tinto? No. That's because the Brazilians and Norwegians and Chinese and Australians would never allow such a thing to happen. But in Canada you can come in and buy anything. You can come in and buy Barrick for the right price.
That is what the experts are saying. They are identifying that these other countries are coming up with industrial strategies. It is clear that Canada does not have that type of philosophy and we are failing because of it.
I want to finish with a bit of discussion related to the types of jobs that we are losing. These are value-added jobs, jobs on which we can build a modern economy. It is important to recognize that because we have seen a shift to part-time employment and jobs that do not have pensions. We are losing out on the opportunity for those workers to raise their families with dignity and integrity so their children can do better than they did. We have lost that vision. We have become apathetic to that. Many students are coming out of university with huge debt loads in an economy that does not have the type of market to help them pay off that debt.
I want to thank the member for and my caucus members who have been leading the fight for many years. I first raised issues about the Investment Canada Act back in 2002 when China Minmetals was looking to buy out part of Canada. I have been pushing the national security file on that issue for many years. It is ironic that an undemocratic state government can own Canadian resources, but it is wrong for Canadians to own their own resources.
Mr. Speaker, with your indulgence, I will be splitting my time with the .
It is certainly my honour and privilege to rise in the House to take part in the debate with respect to the motion put forward by the NDP leader concerning foreign investment in Canada.
Before I begin, let me take a moment to recognize my Conservative colleagues from Saskatchewan. I want to say how responsibly my colleagues have acted throughout this process. I know they probably received more than their fair share of emails, telephone calls and constituency office visits. However, they recognized, as I recognize, that the government and I as their representative have a responsibility before the law to make a public policy decision with respect to the BHP Billiton bid that is in the best interests of the country, that is within the four corners of the Investment Canada Act, a decision that can be defended as one of principle, and as I said, one in the best interests of the country.
The members understood that and they acted on that basis. I want to thank them, as I am sure it weighed on their minds as much as it weighed on my mind.
I cannot say much more, other than what I said yesterday, with respect to the BHP bid. Under the law, under the Investment Canada Act, I made an interim decision, as it is called under the legislation, that the bid was not likely to be of net benefit to Canada.
This has excited a little bit of comment in the media and amongst the opposition benches, because there is a 30-day period under the Investment Canada Act for the bidder to make further representations.
I want to make it clear, because I believe the hon. leader of the official opposition in particular, the Liberal leader, was playing fast and loose with the facts yesterday. Maybe he is more familiar with American law on this matter or British law, but he certainly is not familiar with Canadian law. He tried to insinuate before the cameras that I had some preference or some discretion when it came to the 30-day period, that this was some sort of Conservative conspiracy and that I was not being clear with Canadians.
I want to be clear with Canadians. I have to act within the law. The law is very clear. The Investment Canada Act is very clear that I am only able to make an interim decision at this point. The final decision comes 30 days from last night's announcement. That is very clear in the law.
I am very disappointed that the leader of the official opposition, the Liberal leader, was not clear with Canadians. Maybe he did not understand how the law works. That is possible, too. Or maybe he did not want to understand how the law works. If that was the case, then the member for , who has more experience, being in Canada far longer than the leader of the official opposition, should have educated his leader on how the law works. Maybe he will do that in the future.
I also took note of what the NDP leader said last night. To my mind, again, he does not want to take our answer on its face as being one of principle, one that is within the four corners of the law under the Investment Canada Act. He is alleging all sorts of conspiracies.
I can assure this House once again that I made my decision based on the facts that were presented to me, based on what I have the duty to do, which is to assess the bid pursuant to the test of net benefit to Canada and to thereby protect the rights and interests of Canada and Canadians. That is what I did.
I can assure hon. colleagues that I am very much looking forward to speaking with greater clarity on the merits of the decision at the end of the 30-day period. That is the period during which I am obliged not to describe in greater detail the reasons for the decision, but I will have an opportunity to do so in a month or so.
I want to use the balance of my time, if I might, to speak about the context. The context is the importance of foreign investment in Canada.
Unlike the members of the NDP in this House, we do believe that foreign investment has a place in our country. We welcome domestic investment. We welcome foreign investment, and in fact, that is a quid pro quo for some of the great investments that Canadian companies have made in other countries, whether it be in the United States or overseas, including countries such as Australia.
The fact of the matter is that our great Canadian companies make more investments overseas than countries make investments into Canada, and this has been a point of concern among some of the commentators in the past. We are a net exporter of capital by a significant margin, and we certainly welcome it when Canadian companies can not only grow jobs here but they can grow their balance sheet by making judicious investments abroad. By the same token, we also welcome investment to our shores.
I would only say this, though. The investments to our shores, if they are reviewable under the Investment Canada Act, because they have to meet certain criteria in order to be reviewable, have to follow the act. There are certain obligations they have. There are certain obligations that the minister of industry has. Those are the rules of the game. I do not think it is too much to ask, when we open our doors to foreign investors, that they follow our rules.
We are a country that is ruled by the rule of law. We are proud of that. We actually export that as a value and principle of our democracy. We believe in the rule of law, but that means that companies must follow our rules too. We do not open the door wide and say, “You can come in and you are not responsible pursuant to our laws and you do not have to be respectful of us”.
We do not say that. We do not mean that. We want them to be responsible and respectful of our laws. That includes the Investment Canada Act and that includes the test of net benefit to Canada under that act, which presumes, if I can be so presumptuous, that in some cases the Investment Canada Act would mean that something is of net benefit to Canada, and there may be occasional cases where that is not the case. Such was the case of BHP Billiton's bid, as I enunciated yesterday.
However, generally there are some good cases. StatsCan reported earlier last year that, in terms of our investments abroad, Canadians owned and controlled foreign assets worth more than half a trillion dollars. That is the importance of two-way trade, so I would say to my hon. colleague that this is a good deal for Canada and a good deal for Canadians.
When Canadians invest overseas, they follow the rules of those countries, including Australia, which I might add has something similar to a net benefit to Canada test. It has a national interest test. I would put it to the House that it is more or less the same thing. We play by the rules of the game when Canadian companies invest in Australia; it would only stand to reason that it would do the same here. That is how we create wealth and opportunity for Canada and Canadians.
I know the hon. members on the NDP benches like to tax companies to death and they like to regulate them to death, and then when they are dead, they like to subsidize them to death. That is the NDP way, but that is not good enough in a 21st century economy.
In conclusion, we are taking our responsibilities under the Investment Canada Act seriously. There is a good opportunity to debate the principles and the clauses of that act and I look forward to further debate.
Mr. Speaker, it is a pleasure to stand and join my colleague, the , in discussing, not so much the BHP bid and Potash Corporation of Saskatchewan, but the motion put forward by the NDP. The motion recommends that we change the way the Investment Canada Act would arbitrate these types of situations. It would also take away a lot of the end result decision making from the . We are working under a legal precedent. However, if I remember correctly, this document first came about in approximately 1985, some 25 years ago, and everything should be updated. There is no doubt in my mind about that.
However, under the act, the and government members, who are involved in whatever region that decision would have an impact upon, are constrained legally. I am distressed, to say the least, when certain members of the opposition, and I will not even bother to name them because they are inconsequential, bray at the moon and howl and scream when they know there are legally things that can and cannot be done. As a member of the democracy we call Canada and as a regional minister from Saskatchewan, when I look at the way some of the media and members of the opposition handled this I take affront to that. They went beyond the pale in their condemnations and their demands.
As we know, these companies are both major global players. Potash Corporation of Saskatchewan has holdings throughout the world, as does BHP, maybe on a different scale but similar in that they are international. The legislation is set out as it is because of market disruptions. Ripples that would go through the marketplace would send the incorrect and devastating signals to a lot of investors and so forth.
I commend the , my Saskatchewan colleagues, the overall cabinet and caucus of this great government for keeping this interior. The ultimate decision rests with the . However, I know, from the Saskatchewan caucus perspective, we had some 17 meetings with all the stakeholders, everybody who had a role to play or something to say on this matter. We entertained that, took it to heart and passed it along to the to help him make this decision.
A lot of the discussion is all about politics. Certainly from the opposition side, I see that. When we go back and assess what those members have said and how they have done it, it was all about partisan politics. I think Canadians at the end of this will condemn them for that. Whenever the coalition decides to bring this government down and go to the polls, I think Canadians will remember the disrespectful way it handled itself in this instance.
Now this is a one-up situation. There is a lot of discussion about how this would impact negatively Canada's place in the world when it comes to outside investment. That is absolutely ridiculous. These are all adjudicated on a case-by-case basis. More will happen. It could be today, or tomorrow or next week. We do not know. However, in a free-market enterprise like Canada, a democracy and the rule of law, we are a welcome investment. Look at the strength of our dollar. Look at the way we have come through this recession. A lot of countries entertain investment in Canada because of that stability, and we welcome that.
However, we certainly reserve the right to judge each one of these on a case-by-case basis as per the net benefit clause as set out in the act. It is what is in the best interests of Canada moving forward.
I can speak from an agricultural perspective. With the marketing we have done around the world now, in country after country, working with industry, working with my provincial colleagues, opening markets, rejuvenating markets, Canada is becoming of age again on the global stage. It had been dropped for some time. We were not really getting out there and doing the job.
When we arrive in a lot of these countries, one of the first things we are asked is where we have been. The Australians, the Americans, the European Union, Brazil, and some of the emerging economies like China and India are aggressive marketers and are getting to be more so. They welcomed us being there. They recognized the safety and security of the food supply in Canada. Part of that safety and security is also on the input side. When we look at a strategic resource like potash, which is the basis for fertilizers and so on around the world, we do a tremendous job of supplying both potash and foodstuffs, in a lot of cases to the same countries, for example, China, India, Korea. These are great markets for our fertilizers, as well as our finished foodstuffs. It gives us a power and a strategic position in the global food supply to be a major supplier of both the inputs and our crop and livestock production.
From a strategic standpoint, we have that in spades in Canada.
Under the net benefit, having someone different mine it certainly does make a difference in that Australia is a major marketer of a lot of the same foodstuffs that Canada has. We are a volume producer and so is Australia. For it to be able to go to the Indies and Chinas of the world and say that it now controls their fertilizer too, I think would have had a very detrimental effect.
I know the took all of that under advisement and it helped him and his department formulate the decisions they have taken. At this time and place, it is absolutely the right decision. There is no doubt in my mind whatsoever. I think the Saskatchewan people have recognized the great work done by my colleagues and the Minister of Industry on this file. I think they also recognize the questionable attitude of some of the members of the opposition in trying to make partisan politics out of this.
At the end of the day, the decision is based on the criteria that comes before the minister, straight up and that is it, and the right decision was made.
As we move forward, I am more than happy to have this debate about changing how we assess these because there will be more, not less. Canada is a land of wealth and riches. We have great raw materials. We have tremendous resource wealth. As we strive to open up our Canadian north, which we have done as a government, and secured that sovereignty there and as we look at our fresh water supplies and the growing demand around the world, we will have to come to grips with that demand from the rest of the world to either invest or buy outright these types of commodities.
At this time and place, we can say no because we do have some guidelines. Could they be better guidelines? Probably. We are looking at things that are in demand now that never were when this act was written in 1985.
I welcome the opportunity and the motion from the NDP. I take exception to some of the political undertones in it. The last line is an outright denial. I do not think we can do that in a free and democratic society in a global stage, where we are becoming and growing rightfully into a major player.
Some of this is couched in politics. That is what we do here and I welcome that. I love the rough and tumble of it. We get our elbows up in the corner. It is like a good hockey game. However, at the end of the day, there are rules and regulations and the referee is the Canadian people. They will adjudicate this deal. We are aware of the fact that a growing number of Canadian residents and a growing number of Canadian businesses, which are free traders, support this decision in the way it is written.
When I read editorials in certain papers and at certain authors who claim to be on the inside track, I wonder how they justify their stance to their subscribers and advertising purchasers. I also look through the lens of an opposition that votes for things like , which in a global situation, and PCS and BHP Billiton are part of that, would condemn them and force them to continually fight a rear flank action with causes and situations that come up in some global outpost somewhere. We would have to shut down production on behalf of PCS and adjudicate that.
I also look at the opposition's stance on raising the tax on business. Part of what draws investment to Canada is that lower tax rate. All the opposition members stand in question period and condemn us for moving forward with tax cuts to business. They all go on about big business. However, the tax cuts pertain to little guys too. Every business in Canada is important. Businesses are the growth of the economy. They are the job creators. They are the engine of the economy. Everyone gets that.
Why do those members condemn tax cuts as we come out of the recession? We have seen net job growth in Canada, unlike our closest ally in the U.S. We see stability in our systems in Canada, unlike the turmoil in our closest partner, the U.S. We see a growing acceptance of Canada on the world stage. We see a growing acceptance that Canada can do more. I cannot understand their stance, other than it is a pure crass political situation. I condemn that, but I welcome the opportunity to have this debate.
Mr. Speaker, I am pleased to take part in the debate today about potash. It is a commodity that many people may not have heard much about, at least not until six or eight weeks ago. But since then, potash has become a symbol of how Canadians value and measure the public interest and the strategic interests of our country. That is not something they want sold out or taken over.
Potash is a mineral nutrient that is a vital ingredient in fertilizers, and 53% of the world's known reserves are located in Saskatchewan. Potash is used to renew and enrich arable farm lands. It is indispensable to food production worldwide and will be so for generations to come.
Our soil types here in Canada are different from many others around the world. We do not use a lot of potash in our country, at least not yet. One day we most certainly will. In the meantime, its strategic value in feeding a hungry world is indisputable and is growing more strategic and more valuable every day.
It came as a surprise to many, about two weeks ago, when the answered a potash question in this House in a remarkably superficial and dismissive manner. In reference to the hostile bid by the massive transnational BHP Billiton Corporation of Australia to take over the Potash Corporation of Saskatchewan, the said, essentially, “What is all the fuss? It is just an Australian company trying to buy out an American company, so who really cares?” That was the tone of the 's answer.
As it turns out, millions of Canadians care, and they care deeply. The was wrong about the Potash Corporation. It is not an American company, 49% of its shareholders are Canadian and only 38% are American. More important, two-thirds of its directors are Canadian citizens and Canadian residents. Control of the company rests in Canada, in Saskatoon, Saskatchewan.
Beyond being erroneous, the 's remark was taken by a lot of people in Saskatchewan as an insult, an indication that Saskatchewan was being taken for granted again and maybe taken to the cleaners, that Saskatchewan's interests could easily be sacrificed on the altar of ultra-Conservative ideology, sold out to Australia because the had a personal bias in favour of the proposed takeover.
That is how Saskatchewan read the Conservative position two weeks ago. The government was out of sync with a big majority of Saskatchewan people who did not want, and do not want, to stand by and see this transaction result in the biggest resource sellout in history. They do not want to lose control, permanently and irretrievably, over this strategic commodity and an entire industry.
Offended by the 's foolish remark, public opinion galvanized and mobilized. The Saskatchewan government and the provincial legislature were of one mind on this issue. If anyone knows the politics of Saskatchewan, that is indeed a rare moment.
Premier Wall was buttressed by former premiers Calvert, Romano, Devine, and Blakeney, and the opposition accumulated far beyond Saskatchewan. Former Alberta premier Peter Lougheed weighed in, as did the current premiers of Alberta, Manitoba, Quebec, and New Brunswick. The Ontario finance minister warned the federal government to listen carefully to Saskatchewan. And as the official opposition in the House of Commons, we issued the same warning for six long weeks, day after day, question period after question period, .
The wave of common opinion rolled beyond politics. Icons of Canadian business became very vocal. Early out of the gate to oppose the deal was Stephen Jarislowsky of Montreal, who owns an estimated some 9 million shares of Potash Corp., and stood to make a tidy profit at $130 per share. He said, “No, do not do it.”
The same counsel came from the legendary Dick Haskayne of Calgary, the man for whom the business school at the University of Calgary is named. He, too, said, “No, do not do it.”
Then Roger Phillips of Regina, former vice-president of Alcan when it was a Canadian company and later CEO at IPSCO Steel, said no as well. From there, the list of those with substantial misgivings just kept growing. Norman Keevil of Teck Resources, Dominic D'Allesandro, Calin Rovinescu of Air Canada, Roger Martin of the Rotman School, Gerry Schwartz of Onex, Red Wilson, and many more.
The questions being asked were all much the same. If the Potash Corporation of Saskatchewan were to be sold out to BHP, control over the operation would move from a board in Saskatoon, where two-thirds of the directors are Canadian, to a very different foreign board in Australia, with maybe one Canadian director out of 11. So how is that a net benefit?
If Saskatchewan stands to lose jobs, investment, and provincial government revenues totalling between $3 billion and $6 billion, how is that a net benefit?
If the deal means the inevitable destruction of the Canpotex marketing group and the muscling out of other players like Agrium and Mosaic, how is that a net benefit?
If the biggest resources sell-out in Canadian history adds potash to the list of Alcan, Inco, and Falconbridge, all former Canadian champions now lost from Canadian ownership, lost from Canadian control under this Conservative government, how is that a net benefit?
If Saskatchewan and Canada lose all effective influence over one of the world's most strategic commodities in food production, especially in burgeoning markets in India and China at a time when these economies are poised to begin driving the global economy, if we give up that influence, how is that a net benefit?
If Canada's image is reinforced on the global stage as a corporate pushover, an easy mark for takeovers, or if people are led to believe, to use the words of none other than the former chairman of BHP, that “Canada's policies are the worst...Canada has been reduced to an industry branch office largely irrelevant on the global mining stage”, then where is the net benefit in letting BHP take over?
We asked all of these questions over and over again in the House of Commons. Business leaders asked them too, as did the province of Saskatchewan. After weeks of interrogation, the government has finally admitted that it cannot find any net benefit either. Because this was so obvious for so long, people are left to wonder what the government was really thinking during all that time.
It goes back to the answer from the two weeks ago. This is a government that wanted to say yes, that planned to say yes, until the Conservatives saw themselves threatened politically.
The Conservatives polled furiously over this past weekend. They leaked a bunch of trial balloons to the news media to see what might fly. They tried to test what would sell, so that they could ride a horse in two different directions at the same time, but the reaction was all consistently negative. They could not make a silk purse out of this sow's ear.
In the end, they had to be dragged kicking and screaming to get on the same side as a strong majority of Canadians and an overwhelming majority of Saskatchewanians, and just say no. Even then, their position remained a bit vague. Yes, the rules require a 30-day response period for BHP, but in fairness to the corporation, it should not be drawn into some kind of wild goose chase.
The people of Saskatchewan have not said maybe. They have unequivocally said no. The Premier of Saskatchewan has not said, “Make me a better offer”. He has said unequivocally no.
BHP officials should know what is in their power to address and what is not. Could they do better on the share price, jobs, investment, provincial taxes and royalties, or the size of their Saskatoon branch office? Maybe. But as Premier Wall points out, how could they address the fundamental strategic considerations that go far beyond merely haggling over the price?
In other words, Saskatchewan's potash resources are clearly so strategic, how does BHP officials render those resources unstrategic? In a hungry world in which soil fertilization is vital, how do they diminish control over 53% of the global supply of potash to nothing more than the routine marketing of axe handles? If it is special and it is strategic and BHP cannot change that, then why lead it on? Yes, give the 30 days that the law requires, but do not raise false hopes on the part of the bidder and do not cause doubts among Saskatchewan people about what the answer is. When it comes to potash, no means no. That is what 80% or more of Saskatchewan people want to hear.
They do not want to be told that they are bad or weak people because they expect their governments to stand up and safeguard a strategic resource. Some of the extremist commentary that has been pedalled about Saskatchewan being a banana republic and the premier being some kind of Hugo Chavez of the north is just ideological claptrap. The cream of Canada's business leadership says that standing up for a strategic resource and standing against this particular transaction is not anti-business and not anti-investment, it is simply the right thing to do.
Canada's global reputation is not that we are too tough on foreign direct investments. It is that we are too soft, to the point where even the former chairman of BHP was making fun of us. Neither Australia nor any other sophisticated economy would rubber-stamp a deal like the foreign takeover of PotashCorp. The right-wing Conservative elites who make the contrary argument are the same people who opposed robust financial regulations and promoted big bank mergers about a decade ago. If their bad advice had been followed then, Canada's financial system would have suffered the same big trouble as the American system that so damaged the U.S. economy through the recession of the last two years. A strong legal framework and robust oversight are not bad for business but the Investment Canada process does need to be improved.
Early in this debate, several weeks ago, the Liberal official opposition made that very point and we called for four types of changes. The first one was that there needed to be more precision in the definition of what constitutes a net benefit under the Investment Canada Act. Right now it is a bit of a moveable feast. It is vague, it is whatever the minister says that it is from time to time and it changes from time to time. For all sides in the debate about foreign direct investment there needs to be more clarity about what net benefit means. To this very moment, BHP still believes that it passed the test. To a big majority of Canadians, it is beyond doubt that it did not pass the test and perhaps could not. Such ambiguity is not helpful to any side in a large, complex commercial transaction. So number one is that there be greater certainty in the definition of net benefit and the factors that determine it.
The second change concerns transparency. As it exists today, the Investment Canada process is a totally secret black box. No one knows the information that goes in or the arguments that are exchanged. No one knows what analysis if any gets done and no one knows the basis upon which recommendations are made. We have the bizarre situation here in the BHP case where the minister says that there was an analysis but that there were no recommendations. Well, how silly is that, an analysis without recommendations? Equally silly is that any conditions attached to any government approvals are also secret. Now that is ludicrous. If the public cannot know what the conditions for an approval are, then how can there be any measurement of performance? Provisions need to be embedded in the legislation to ensure proper public disclosure of necessary information and a more transparent procedure in the public interest.
The third change concerns enforcement. As we have seen all too often since 2006, big promises are too often made by takeover bidders in order to close their deals, only to be broken within a few scant months thereafter.
The practical experience on this front has been bitterly disappointing to a great many Canadians. It is not good enough to say “then sue them”. Where would that get us? Litigation would be tied up in the courts for 10 years or more while Canadians lose their jobs. The act needs to be amended to include practical, timely, readily available remedies to enforce any promises that are made.
Fourth, as we have seen in the Potash case, this federal jurisdiction over foreign direct investment can impinge squarely upon provincial constitutional jurisdiction over natural resources. Premier Wall was prepared, if necessary, to take that question to court as the people of Saskatchewan would have expected him to do.
While the Investment Canada Act cannot resolve every question of constitutional jurisdiction, it can at least obligate the federal authority to consult more closely and to keep profoundly affected provinces more effectively in the decision-making loop. They deserve some recognized status in this whole procedure.
The motion before us today is by no means a panacea. Some of its proposals are useful while some may not be workable or even desirable, but at least a discussion needs to begin on how to improve the Investment Canada Act and its procedures as we called for about a month ago. That discussion needs to get going before there is another megatakeover looming on the horizon. The Potash case has demonstrated that the present regime is not adequate, so let us get it fixed.
In the meantime, this motion in its last sentence says clearly that the BHP takeover bid needs to be stopped. That is the primary message in this motion today that I hope all members will endorse.