|| That, in the opinion of the House, the government: (a) should not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations; (b) should immediately undertake transparent and accessible public hearings into the issue of foreign ownership in the Canadian energy sector with particular reference to the impact of state-owned enterprises; and (c) must respect its 2010 promise to clarify in legislation the concept of "net benefit" within the Investment Canada Act.
He said: Mr. Speaker, this is a very important debate today. To underscore the importance of the debate, I will read a letter I received last night from Calgary from one of the many Canadians who are concerned both with this deal and also with the lack of government action and irresponsible approach that it has taken thus far on a file, an application, that it knew about more than two months ago.
Part of the letter reads as follows:
|| I am a lawyer with over 25 years of experience in the oil, natural gas and petrochemical industry. Currently I am VP Legal and General Counsel for a pipeline transmission company headquartered in Calgary.... I have grave concerns about the proposed CNOOC takeover of Nexen.
|| CNOOC is a state-owned entity... While CNOOC has promised to comply with federal and provincial health, safety and environmental laws, this commitment doesn't address the fact that the executives directing the Canadian subsidiary's actions reside in China, well beyond the reach of Canadian courts. The Sinopec case shows that Chinese state-owned entities will fight all the way to the Supreme Court of Canada to avoid prosecution.
||[s] elling our non-renewable natural resources to the highest bidder is not the answer [to the issues before us].
|| Please note, I'm not asking you to say "no" to foreign investment in the oil sands, but rather to say "no" to foreign takeover of the oil sands. Once these resources are sold to a state-owned entity, Canada will never get them back.
This is why this issue is so fundamentally important. Canadians are writing and phoning in saying that very clearly. In the constituency meetings we are having across the country, I know every member of Parliament has had people approach them about this deal. I certainly I have in my riding.
What the NDP is saying is that there needs to be public consultations on this deal. Before the government moves to rubber-stamp, it should consult the public. That is what we are saying today and that is where we are hoping to get support from all members of Parliament in the House.
Mr. Speaker, I will be splitting my time with our terrific industry critic, the member for . I will be looking forward to her presentation in just a few minutes.
The concerns that have been raised by that particular individual are not concerns that we only see occasionally but concerns being raised regularly right across the country.
It is only fair to listen to what the public knows so far of this particular application. An opinion poll just a few days ago indicated that about 70% of Canadians oppose this deal.
Mr. Speaker, you know, because you are very well versed in these matters, that the majority of chief executives who are polled are opposing this deal unless they can see stringent conditions. I will get back to that in a moment. There are real concerns about the government's ability to even put in place the kind of conditions that are required.
We are seeing concerns raised by the public and in boardrooms across the country. We have even heard concerns raised in the Conservative caucus.
For all of those reasons, the NDP is presenting a motion today that would allow for the type of considered discussion around this issue that needs to take place. We are saying that there should not be a rubber-stamp placed on this “without conducting thorough public consultations”; that the House should direct the government to “immediately undertake transparent and accessible public hearings into the issue of foreign ownership in the Canadian energy sector with particular reference to the impact of state-owned enterprises”; and that the government “must respect its 2010 promise to clarify in legislation the concept of 'net benefit' within the Investment Canada Act”.
That is what we have put forward. Certainly no Conservative member of Parliament could oppose a commitment that was made to Canadians both in a previous House and in a previous election campaign.
As we start this important debate today, I will recall for members on all sides of the House the unanimous support for the motion by our late leader, Jack Layton, two years ago and adopted unanimously in the House.
It stated that in the opinion of the House we needed to make public hearings a mandatory part of foreign investment review. The Conservatives voted for that.
More particularly, it called for increased transparency by:
||(b) ensuring those hearings are open to all [who are] directly affected and [to the] expert witnesses they choose to call on their behalf.
—which the Conservatives and everyone else in the House voted for, and—
||(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.
—which again, all members of the House voted for, and—
||(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....
Every single member of Parliament, including every member of the Conservative Party there on that date in 2010, voted for that motion by Jack Layton. It was one of those rare occasions when there was a unanimous move by the House of Commons to direct the government to undertake certain actions.
Now it is two years later. Has anything been done to follow up on that motion passed unanimously by the House?
Some hon. members: No.
Mr. Peter Julian: No, my colleagues remind me, nothing has been done in the last two years.
Two months ago at the end of July this application was announced. At that time, the industry critic, the member for , and I rose in a press conference to say very clearly that the commitments undertaken in 2010 needed to be brought forward in 2012 because the application was pending. Was anything done?
Some hon. members: No.
Mr. Peter Julian: No, my colleagues remind me again.
Now we are a few days from the deadline. When the formal application came forward, the 45-day period started and we are now only a few days from the point when the government should be making an enlightened decision, given the importance of the file and the many letters and phone calls we are receiving from, and conversations we are having with, our constituents.
It is a few days away. Has anything been done by the government to reinforce that commitment made two years ago?
Some hon. members: No.
Mr. Peter Julian: There we go.
What we have seen is a failure on the part of the government to keep that commitment of two years ago. The NDP provided clear direction. Every single member of the House of Commons said yes, that it was the direction in which the country should go. The government needed to take this direction from the House of Commons, and for two years nothing has been done.
Two months ago the application was pending. We knew that. Did the government snap to attention and start working? No. No work has been done. Now we are only a few days away from a decision that we would expect to be enlightened and emboldened by full public consultation, yet we have not seen anything.
This is the fundamental problem. We have the public on one hand saying that they are learning more and more about this takeover and that they are concerned about it. We also have chief executives and those in the boardroom saying that they are looking at this and are becoming more and more concerned. We even have Conservatives raising this issue, but we have seen no leadership at all from the government.
If today the Conservatives vote against this motion, it would be a rejection and repudiation of a solemn commitment made to the Canadian public two years ago when they voted for that motion by Jack Layton. It would be a repudiation of what is clearly the public's desire to be consulted about this takeover and the whole issue of takeovers in the energy sector generally, particularly by state-owned companies.
It would also be a clear repudiation of a commitment made by every Conservative MP to clarify the net benefit test and to engage public confidence in that test, which has clearly eroded because there has been no definition of net benefit, and also to set in place a level playing field for investors so they would understand the criteria they have to meet when applying for a takeover.
Rejection of this motion today would be a repudiation of all of that. I ask Conservative members to vote for it. I hope they will support this motion.
Mr. Speaker, natural resources are a source of immense wealth for Canada. In this sector, as in many others, foreign investment is an important lever in the Canadian economy. It creates jobs and encourages the exchange of knowledge and technology.
In the oil and gas sector, foreign companies' assets are worth nearly $181 billion, according to Statistics Canada. In comparison, Canadian companies' assets are worth $337 billion.
The purchase of Canada's 12th largest oil and gas company, Nexen Inc., by China National Offshore Oil Corporation, or CNOOC, for $15.1 billion clearly illustrates a growing trend. It reminds us that with the tremendous wealth that we have in this country comes great responsibility. We must develop our resources responsibly and in such a way that our wealth benefits all Canadians.
Foreign investments are increasing in the natural resource sector, especially from state-owned enterprises like CNOOC. Chinese investments rose from $113 million in 2004 to $14.1 billion in less than a decade. A strong trend along the same lines has also been noted in the case of companies from the United Arab Emirates, Russia, Singapore and France.
In fact, investments from state-owned enterprises are targeting the natural resources sector more and more. In 2009, foreign assets in the oil and gas sector accounted for 35%. The proportion of foreign assets involved in the oil sands development, for instance, is becoming particularly high.
Surprisingly, it is the CEOs of Canadian oil companies who are beginning to worry about the limits on foreign acquisitions.
|| Top oil industry executives are asking Ottawa for rules to protect Canadian ownership of major oil sands companies from a flood of foreign investment expected in the sector.
|| Canada’s oil sands contain the third-largest crude oil reserves in the world and are a strategically critical resource for the country.... [They note that] the deal signals growing foreign interest in the oil sands and insist [that] Ottawa needs to ensure a substantial level of domestic ownership as more deals loom.
It is more important and timely than ever to review the Investment Canada Act and, in particular, the murky net benefit to Canada provisions that the must determine if he is to approve a foreign takeover, such as CNOOC's purchase of Nexen. At this juncture important weight must given to strategic considerations about the ownership of our natural resources far beyond the time horizon of the deal whose merits Canadians are debating.
As Murray Edwards, the CEO of Canadian Natural Resources Limited, one of Canada’s biggest energy companies and a major oil sands player, put it:
|| I think it is important to get some ground rules in place before the next one.
The NDP could not have been clearer. We are calling on this government to launch public hearings so that Canadians from all backgrounds and experts can have their say regarding CNOOC's plans to purchase Nexen.
For three years now, the NDP has been calling for a review of the Investment Canada Act. According to Industry Canada, nearly 15,000 Canadian companies have been purchased since that legislation was passed in 1985. Only two attempts have been blocked. We have a review process that is a complete farce, whereby the transactions are either approved or blocked depending on how the decision will affect the government's popularity.
“Net benefit to Canada” is not clearly defined in the legislation, which causes uncertainty for both the investors and the communities that are likely to be affected. Ultimately, the is the only person who has the authority to decide whether the transaction provides a net benefit to Canada.
Again, the NDP's position on what constitutes a net benefit could not be clearer. The purpose of the Investment Canada 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...
This definition of net benefit to Canada is taken from the NDP motion that the government unanimously supported in 2010. It expresses a clear and unequivocal desire by the House to amend the Investment Canada Act.
By voting in favour of the motion, the Conservative government supports the NDP's key demands. The government accepted the requirement of mandatory public hearings involving the communities affected by a transaction under review, and the public disclosure of all the conditions attached to the approval of an acquisition.
The NDP motion also asked that the legislation provide sanctions in the event of a breach of the conditions attached to a transaction. The Conservatives did not honour that promise, unfortunately. Experts from the firm Blakes, Cassels & Graydon also underscored the importance of broader consultations among the stakeholders, in order to provide opportunities to discuss the concerns of the industrial sectors, the unions, environmental groups and the affected communities.
Concerns over our country's national security should take greater priority in the debate over ownership of our natural resources. The Canadian Security and Intelligence Service has also issued warnings regarding foreign acquisitions in key sectors of the economy. Such is the case when it comes to intellectual property and technology transfers.
It is no surprise that the criteria in the Investment Canada Act that affect issues of national security are just as vague as those governing net benefit.
It is solely up to the minister to determine whether a foreign investment poses a risk to national security. That is purely arbitrary. In the United States, the law specifies that a committee must examine foreign investments and immediately consider that national security may be at risk when foreign investments touch on crucial sectors, such as infrastructure, mining, transportation, energy and key industrial capabilities.
In short, where American law is clear, Canadian law is vague.
We are at a crossroads. The concerns of Canadians, Conservative ministers and backbenchers are unequivocal. Private sector executives are asking for clearer rules for foreign takeovers. And so is the NDP.
It is time for the government to make good on its promises and review the Investment Canada Act. It is time to consult Canadians about one of the most significant transactions in the history of this country, a transaction that will create an important precedent for our foreign investment policy.
The NDP is calling for public hearings to be held to allow the various stakeholders to have their say. We are asking the government to finally go ahead with a complete review of the Investment Canada Act. We are asking that the act's objective be to promote foreign investment while fostering the development and prosperity of Canadian communities and the creation of high-quality jobs. We are asking for investments be made in accordance with the laws and governance best practices, in an environmentally responsible way and with the utmost transparency.
We owe it to Canadians to exercise exemplary diligence.
Mr. Speaker, I will be splitting my time with the .
Our Conservative government has a strong record of standing up for the Canadian economy at home and abroad and for Canadian values and interests on the international stage.
Investment from our international trading partners plays an important role in the Canadian economy. Indeed, investment is critical to our economy. It helps Canadian companies find new capital and enables them to expand, innovate and create jobs for Canadians for our neighbours. That is why we have a broad framework in place to promote trade and investment, while protecting Canadian interests.
The Investment Canada Act provides a sound and tested process to review significant acquisitions of Canadian enterprises by non-Canadian companies to determine if they are likely to be of net benefit to Canada. While a company files an application for review under the Investment Canada Act, the will conduct a thorough review of the proposed investment. Under the act, where any investment, including the one the hon. members opposite mentioned, is subject to review, the Minister of Industry must approve an investor's application for review before an investor can implement an acquisition. An application for review is only approved where the Minister of Industry is satisfied, based on the plans, undertakings and other representations of the investor, that the investment is likely to give net benefit to Canada.
In making that determination of net benefit, the minister considers the factors listed in section 20 of the act.
Among these factors is the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, on resource processing, on the utilization of parts, components and services produced in Canada and on exports from Canada. Another factor is the degree and significance of participation by Canadians and Canadian business, or new Canadian business, and in any industry or industries in Canada of which the Canadian business or new Canadian business forms or would form a part. Another factor is the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada. Another is the effect of the investment on competition within any industry or industries in Canada. There is also the compatibility of the investment with national, industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives stated by the government or legislature of any province likely to be significantly affected by the investment. Also there is the contribution of the investment to Canada's ability to compete in world markets.
The review process under the act is clearly rigorous. As part of the process, the minister must, and does, consider the view of a variety of stakeholders and consult affected provinces or territories, as well as other government departments. In addition, as noted by the opposition, any member or group that has a view on any specific investment proposal may express its views, which will be welcomed during the review process.
Also, for every investment by an SOE, regardless of its source, as part of the assessment of the factors in the act, the considers the extent to which a company is controlled by a state and whether it operates on a commercial basis.
During the review process, investors generally provide plans and undertakings to support their view that their investments are likely to be of net benefit to Canada.
The act sets out protections for the information obtained from an investor or Canadian business. This protection enables us to obtain the information we need from the business involved in the transaction. This data is essential to conducting a thorough review, while preventing the harm to the investor and Canadian businesses and jobs that could come from disclosure.
We are pleased by the interest of Canadians in this process and endeavour to provide information whenever possible. The minister will take the time necessary to conduct a thorough and careful review of CNOOC's proposed acquisition of Nexen and will not approve it unless satisfied that it is likely to be of net benefit to Canada.
Our Conservative government has a clear track record of listening to Canadians on what matters most of all to us: jobs, economic stability and safe communities. That is why we have demonstrated such strong economic growth, job creation and prosperity in Canada.
In contrast, the NDP still clearly favours reckless economic policies, such as the carbon tax, that would deter investments, kill jobs, raise the price of gasoline by 10¢ a litre and hurt—
Mr. Speaker, I am very pleased to rise today to discuss with my opposition colleagues, both Liberal and New Democrat, the motion before the House related to foreign investment in Canada.
In general, the foreign investments made in Canada by outside companies are very beneficial to the Canadian economy. Our government is open to foreign investment. The currently has before him a proposed foreign investment that he is analyzing under the Investment Canada Act. I would like to remind hon. members that this legislation was passed in 1985 by Brian Mulroney's Conservative government, which wanted to promote foreign investment and support Canadian corporations so that they could invest abroad. There is reciprocity in this area: if we prevent foreign companies from investing in Canada, then Canadian companies that want to invest abroad may also be prevented from doing so.
At the time, in 1985, the Conservative government felt that these investments were important to the creation of jobs and the generation of wealth in Canada. The government abolished the Foreign Investment Review Act brought in by the Liberal government of the time, which did not believe that foreign investment was beneficial for Canada. This legislation now includes a test to ensure that foreign investment will benefit all Canadians.
In this time of global economic uncertainty outside our borders, many European countries are currently in a recession. The Americans have a enormous deficit and a giant debt. Given that Canadian entrepreneurs export their products to these markets, we must continue to support investment because it generates wealth. Production is what makes a country grow richer. We can buy only what has been first produced by entrepreneurs. We must promote production and investment—the driving force behind Canada's economy—rather than spending, as some members of the opposition think.
The economic plan that we implemented two years ago is working. Canada is experiencing economic growth. This growth is somewhat fragile because job creators, that is entrepreneurs, export their products abroad and the economic situation in other countries could impact Canada's growth.
For that reason, we must focus on creating jobs and wealth for Canadians. That is what we have done in our latest budgets, thereby showing that Canada is the best country to invest in. Canada is open for business and it invites Canadians and foreigners to invest in it to create wealth.
What is more, Canada is the best country in the G7. Canadian entrepreneurs have created more than 600,000 new jobs since the end of the last recession. Our corporate tax rate is the lowest among the G7 countries. That is important if we want to attract foreign investors who create wealth. The International Monetary Fund continues to rank Canada among the top countries in terms of economic growth and investment. Even Forbes Magazine, the famous business magazine, says that Canada is the best place to invest and to do business. All that is good news for all Canadians because it is people from the private sector who create jobs.
Unlike the opposition, we know that governments do not create jobs; entrepreneurs are the ones who create jobs and wealth. We must encourage them to do so, including by cutting corporate tax rates. When we came to power, the corporate tax rate was 22%. We have considerably reduced that rate. A lower tax rate is important because it leaves businesses with more money to develop their projects, export their products and enter new markets.
Taxing a corporation impedes the creation of wealth because it means taxing investment and production. We must concentrate on reducing taxes, contrary to what the NDP is proposing to do.
The NDP election platform contains its solution to wealth creation: tax Canadians more, and make them spend more and go into debt when they have maxed out their credit cards. It is right there in black and white.
Canadians know that when they have maxed out their credit cards, they must pay their debts. The NDP is urging Canadians to live beyond their means and urging the government to live beyond its means. The NDP wants to continue imposing taxes and encouraging debt, which will leave future generations with a poisoned gift.
We must not tax corporations and we must not impose a carbon tax of $20 billion or more. The NDP is advocating this tax, which will affect families and Canadian consumers.
I mentioned that a tax affects families, but it is important to say that taxing corporations is like taxing individuals because we know that businesses compete with one another. If corporations were made to pay a carbon tax, as the NDP would like, production costs would increase.
A business must be profitable in order to provide investors with a return on their investment. We are investors, through our pension funds invested in Canadian corporations. If a corporation has to pay an additional cost, it will pass on this cost to consumers by increasing the price of its goods or products, or to its shareholders by decreasing the return on their investment, or to the workers that the NDP wants to protect by not giving them a wage increase.
Depending on the competitive environment in which the corporation operates, the individual will always pay the corporation's taxes. It is not true that corporate taxes and personal taxes are two separate taxes. It is one and the same and people know it.
A $20 million carbon tax on corporations is a tax on individuals. At the end of the day, Canadians are all consumers, workers and investors through their pension funds. Thus, personal income tax will rise.
A company is merely a network, a cluster of contracts between suppliers, workers and customers. In a free and democratic country and in all countries, the real individuals are those who pay corporate income tax. That is why the NDP's plan must not be implemented. It would cause a great deal of harm to Canada's economic growth.
I would like to add that it is possible for a foreign investment to be made in Canada or for a company to want to buy shares in a Canadian company. We live in a free country where property rights exist. If shareholders of such a company make a basically unanimous decision to sell their shares, why would the government interfere in a private decision?
The general principle that we must remember is that, if individuals decide to sell their shares, it is because it is in their interest and thus in the interest of Canadians to do so.
When the Government of Canada uses legislation to prevent shareholders from selling their shares, the message we are sending shareholders is that, if they invest in a company, they risk being unable to sell their shares later because the government could intervene.
Rules have been established and companies must follow them. These rules are set out in the Investment Canada Act. These are the rules that the must follow, and that is what he is going to do in the context of the transaction that we are now dealing with. He will analyze that transaction to ensure that there is a net benefit to Canada.
I am certain that the Minister of Industry will do his job. In the coming weeks, he will inform us of his decision. He will conduct a detailed analysis. We will respect this legislation, which has been in place since 1985 and which has allowed Canada to grow and prosper while allowing Canadians to continue creating jobs.
Mr. Speaker, I am very pleased to rise here in the House to take part in today's debate on foreign investment, specifically, the proposed transaction between CNOOC and Nexen.
The Liberal Party understands the need for foreign investment. It is important for the creation of economic growth and for the creation of jobs.
We also note that studies have shown that foreign investment tends to increase innovation in a country. It is valuable and important for Canada. If there is a lot of foreign direct investment out of Canada, that is important to our economy. It creates wealth and jobs at home because there are returns from that. Head offices are based here that are important employers and they create good jobs in Canada.
Our position is not like the position of the NDP over the years. That party has long been opposed to free trade and foreign investment. It has opposed foreign investments over and over again. These days all of a sudden those members are trying to present some sort of a new face, a different picture, that they are not going to look quite so economically irresponsible, but rather make it look as though they are being a little more open to these things. Although they are trying to bury the past, Canadians are not buying it so far, but we will have to wait and see.
The Liberal Party has been asking for weeks for answers from the government about this deal. It is clear the government does not know what it is doing in this case, or else maybe it is afraid to tell Canadians what it is doing, what its plans are, how it is going to manage this, or perhaps both.
As a result of the government's economic incompetence, Canadians really are not confident that they can be assured of being protected by the Conservative government.
Let us remember that the Conservatives inherited the best fiscal situation of any new government coming into office, with a $13 billion surplus in 2006 and they turned that into a deficit before the recession began in 2008. By April and May 2008, the country was already in deficit again. The government entered that year with a deficit of over $5 billion and it had not even begun spending on stimulus at that point.
The Conservatives claim they have had a good record economically. I think most Canadians recognize that is not the case. Therefore, it is hard for them to have the kind of confidence they are looking for that the government will deal with a matter like this properly. For this and other reasons, as well as their failure to be open about this, there is a growing level of cynicism over this deal. The actions of the Conservatives are a major contributing factor to that cynicism and to the concerns Canadians have about this.
The report from CSIS talks about foreign companies, state-owned companies. It does not specify this instance, but it talks about how these kind of deals could create security concerns. That has obviously created a lot of concern for Canadians as well.
The public has expressed reservations about this deal because the government has failed to be open, despite repeated promises. A moment ago my hon. colleague talked about some changes the Conservatives made in 2009 in relation to a bit of tinkering around security questions. In 2010, a year after that, the said that we needed a clearer, more transparent process, yet we have seen nothing since then.
The government sat on this question knowing full well that proposals like this would come forward. We have been hearing lots of talk in the oil sands, in the west and elsewhere, of foreign interests and takeovers. For the government to say that it was not ready, that it did not know it was coming and that it did not even prepare for this, makes no sense.
I am delighted to be splitting my time with my hon. colleague from . I look forward to hearing him on this topic in a few minutes.
We even see growing dissent on the government backbenches. There is clear division on that side. Even the backbench members are concerned about where the government is headed. Maybe they too find it awfully difficult to see where the government is headed on this because it has not been transparent. Apparently there is a dispute about this even in cabinet. The member for seems to be the poster boy for opponents to the deal, but he certainly is not the only one to question what the government is doing on foreign investment.
It is something Canadians have been wondering about for years, ever since the fiscally incompetent crowd over there took power in 2006, because during that period we witnessed a hollowing out of the natural resources sector in this country. Lots of former leaders in that sector are now gone and owned elsewhere. Think about aluminum; think about steel; think about metal. Big companies in these sectors, important Canadian companies, have all been gobbled up by foreign owners. The companies, since then, have failed to live up to their commitments, and the government has not held them to those commitments. The government lacked the fortitude to enforce the commitments that were in those deals.
How can Canadians have any confidence in what the government will do with the next deal, that it will enforce any conditions that may apply to the CNOOC Nexen deal? Of course it probably should not surprise us that the government lacked the fortitude to enforce even the basic promises made in some of those deals when we know about the government's own record for keeping promises. Seniors remember the broken promise from the government and the on income trusts. Voters remember the fixed date election law, and that promise was broken. All Canadians these days are paying more and more because of the broken gas tax promise. The Prime Minister said whenever gas prices rise above 85¢ we will get rid of the tax, which would alleviate the challenge for Canadians paying for that. That is another broken promise.
We have a who has made a habit of failing to live up to his promises or to keep a promise, so how is he likely to ask others to do so? It does not seem very likely. In fact, part of the problem we are dealing with today is a direct result of the Prime Minister failing to keep his promise to review and update the Investment Canada Act and to provide a clearer process. There are a number of ways of doing it. One option is by making amendments to the net benefit test. Another is to ask if there is some other process we should use entirely. Do we use one that still leaves it to the discretion of the government in the end, or do we find something else that removes that discretion? That is what we ought to be discussing.
One of the reasons we are supporting the motion today is that we believe it is important to have a public discussion about this. It is important to have members of Parliament at committee discussing these issues. As my good friend from recently pointed out, the six-step test for net benefit in section 20 of the Investment Canada Act remains a very foggy test. It is not all that clear. In any given case, net benefit is what the decides, despite all the things listed in section 20. It changes from deal to deal. As we saw with the potash deal a couple of years ago, we know decisions are based on political expediency. It was clear the government wanted to go ahead with that deal, but it finally backed down.
We do not have a clearly defined set of regulations. Is that the way to go? Do we need a different process that takes it out of the hands of the cabinet? Or do we want to leave some flexibility in government on these decisions? That is the kind of thing that a committee of Parliament ought to be studying. I had a motion passed last spring after waiting quite a while, adopted by the industry committee to look at this, but we are still not at it and we have a situation in this Parliament where committees go in camera so the government can avoid dealing with things it does not want to deal with.
This is a case where the said in 2010 he wanted to deal with this, he wanted this study. The said a year and a half ago that the committee ought to be looking at this. Well, who has a majority on the committee? Has the government really allowed the industry committee to study this question, if it has not happened? It has the majority. It controls the agenda and yet the committee has not studied this issue. We know who is in control of that.
The unfortunate truth is that, because of the 's failure to keep a promise again, there will be a lot more potential takeovers that will be decided on this very sketchy basis, and that is economic mismanagement to add to the Conservatives' fiscal mismanagement. The sad truth is that the government has not done its homework on this deal even though it had plenty of time to prepare for this kind of situation, the same way it failed to do its homework on the northern gateway pipeline proposal as we heard from former Conservative minister Jim Prentice this very week. He talked about how they totally failed to consult aboriginal communities, how they have not lived up to their responsibilities.
Mr. Speaker, I am pleased to speak on this motion, which just like yesterday's motion on employment insurance, is quite reasonable. I certainly believe MPs from all sides of the House should be able to stand up in their place and support it. It is not going against government policy. It is, in fact, doing reasonable things for Canadians and doing the proper study.
We all know that the government has failed, as has been mentioned by many speakers, in its commitment to lay out the rules on foreign investment in Canada, which it committed to do following the attempted takeover of Saskatchewan potash some two years ago. There is no question that the Conservative government has completely botched up the Nexen situation by completely failing to outline the concept of net benefit within the Investment Canada Act. This particular proposal goes far beyond just an ordinary investment because, in this case, we are talking about Canadian resources. Because of that failure and the lack of leadership on the part of the government, ministries within the government now are trying to make rules on the fly, it seems to me. That is unacceptable.
As the motion states in (c), the government “must respect its 2010 promise to clarify in legislation the concept of 'net benefit' within the Investment Canada Act”. That is certainly not too much to ask and we all know the government has completely failed in that obligation. Yes, we know government members will rant on in their remarks about the net benefit test that is already there, but we all know that when we go through the six points, they are basically meaningless and vague, and they give government a wide-open door for what it may or may not want to do and, specifically on the Nexen-CNOOC proposal, they really are not the kind of criteria that are necessary.
This is not a straightforward commercial venture in which a company is buying a business that produces widgets. This is much beyond a commercial venture. This is about buying a company that may not have the capital flow that is required to expand into the future. Yes, that company is looking for capital investment, but it is a company that has control over and access to Canadian resources that we should be looking to enhance in terms of Canada's value-added industry, Canadian jobs and resourcing our own energy sector. This is really about control of our resources.
Premier Redford and a number of premiers have talked about a national energy strategy, and I certainly agree we need one. We need a national energy strategy in this country. I come from the east coast. However how do we utilize Canadian resources of all types? In this case, how do we utilize energy, which CNOOC might eventually control, to add value for Canadians, to be an energy resource for Canadians, to be a benefit to this country and to use our resources to fuel our own industrial plants where we would create Canadian jobs and production beyond our energy sector? In other words, how would we fit this proposal into a Canada-wide energy strategy?
The points I just made really relate to (a) and (b) of the motion. The motion states that we need to involve all Canadians, a public process and proper public consultations, so we can see what is at stake in the overall proposal. What do Canadians really want? How will my constituents in a riding in eastern Canada, far away from where this deal is taking place, impact it?
I will now turn to the heart of the issue as it relates to this specific takeover proposal. The $15.1 billion effort by China's state owned oil company, CNOOC, of Canadian Nexen has to be placed in the proper context, one that goes beyond the shareholders of Nexen itself.
I will quote from testimony at a United States-China review commission on January 26, 2012. It reads:
|| Beijing’s instinctive impulse for national control over key resources and energy in the face of chronically growing dependence on imported oil is what has driven its push for control over overseas oil and natural gas resources embodied in its “Go Out” strategy adopted after 2000. The go out strategy reflects the growing politicization of energy security in China but is symptomatic of the reaction to growing energy security anxieties across the region in Asia among the big oil importers.
The submission to the commission continued with the following:
|| First, Beijing has sponsored and supported the overseas acquisition of oil and gas resources by China’s three main national oil companies (NOC) with state bank funding, loans, and expanding state diplomacy in the key oil and gas exporting regions. The NOCs often pay significant premiums to other market bidders to acquire these assets.
I know that CNOOC has made clear that it is operating on a strictly commercial basis. That may be so, we do not know, but all the more reasons for proper consultations and investigation. However, it is a fact, as stated to that “before the commission”, it is paying high premiums on share prices in order to buy Nexen.
If the board of directors of Nexen, who certainly need capital, are getting this premium, then they do have an obligation to their shareholders to say that it is an opportunity and that it is for shareholders.
However, our job and the government's job is to decide on the criteria and on whether it would be a benefit to Canada. This motion goes right to that point.
As I said at the beginning of my speech, this motion is not all encompassing. It is a reasonable motion. The government backbenchers need not be afraid that the will come down on them if they vote for this motion. This is doing the reasonable thing for Canadians and holding proper consultations in order to have the right criteria on this kind of proposal. As I said, this is not an ordinary business acquisition. This is about our energy sector. It could affect how we implement a national energy strategy, if we ever do. As it could affect jobs in our industrial plant in Canada, we need to do it correctly.
The Conservative government has failed to make clear in any respect to any constituency what constitutes Canada's interest in this $15.1 billion purchase of Nexen by China's state owned enterprise, CNOOC, as demonstrated by the story in The Globe and Mail of September 25 headlined, “Protect Canadian ownership of oil sands firms, executives urge”.
When we have public declarations from leading oil executives in Canada with respect to concerns regarding increased foreign, in this case Chinese, investment, there is a reason for greater concern, and that goes to the point of the motion.
We Liberals, as my colleague from said, are very much in favour of trade and of investment but at the end of the day they need to be in Canadians' interest. In this case, we are not talking just about a commercial venture. We are talking about an impact by a state owned company on our resources.
Mr. Speaker, I am delighted to be sharing my time with the member for .
I think all Canadians understand the importance of investment in Canada and conversely the investment by Canadian firms in the rest of the world. I also think that Canadians understand the need to develop economic policy in this country that is capable of reflecting a multi-factored and nuanced approach. I think Canadians understand and desire economic policy in Canada that accomplishes a number of goals at the same time, where we create strong value-added industries and good, solid industrial sectors in this country that create good paying jobs on which people can raise their families. I think Canadians want the development of the Canadian economy by Canadians for Canadians and in Canadians' interests.
As well, I think Canadians understand that Canada operates in the global world and that we understand and do seek to have responsible and effective investment by other countries and other companies that operate across the world in Canada. I think everybody agrees with that.
Within that general framework, we have the situation of China. I think all Canadians are starting to recognize the critical importance of that country as a leading major ascending economy in the world. Right now, China has emerged as the second leading economy around the globe. China is of particular importance to western Canada, in particular to my home province of British Columbia where Asia-Pacific trade and economic relations are increasingly important every day.
We know that China has massive foreign reserves. It is sitting on a lot of cash that it seeks to put to productive use around the world. Canada wants to engage and be part of this growth but Canadians do not want the growth to be completely without any kind of rules or regulations and to be pursued blindly without consideration for how that economic integration with China can be most effective in developing the Canadian economy.
Canadians also have a very sharp appreciation for the importance of Canada's non-renewable resource sector. We know that we are blessed with many resources that are non-renewable, from minerals to oil and gas. We know that is an important part of our economy. Canadians know that this resource is a strategic one. It is a critical domestic asset. We live in a country that is cold and we require natural gas and other substances to heat our homes, so we know that oil is a very valuable commodity.
The proposed takeover of a major Canadian oil sector, in this case Nexen, by the foreign company CNOOC, a state owned Chinese company, is of major importance to Canadians. It not only raises questions of foreign ownership of Canadian strategic assets but it also raises the larger question of what Canadian policy should be toward foreign takeovers of Canadian companies generally.
Therefore, the New Democrats are very pleased to have put before Parliament today a motion that reads as follows:
|| That, in the opinion of the House, the government: (a) should not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations; (b) should immediately undertake transparent and accessible public hearings into the issue of foreign ownership in the Canadian energy sector with particular reference to the impact of state-owned enterprises; and (c) must respect its 2010 promise to clarify in legislation the concept of “net benefit” within the Investment Canada Act.
When we read those words, I would respectfully venture to say, they are impossible to disagree with. How could anyone in Canadian Parliament, from any party, oppose a review of the takeover of major Canadian strategic oil company assets by a foreign state-owned company without having involvement and input from the public and the stakeholders of our country?
Who could possibly be opposed to clarifying, not only for the Canadian public but for investors around the world, the concept of “net benefit” when that phrase is contained within the body of our legislation? Who could oppose having clearly defined criteria so that investors know what the ground rules are when we are considering a foreign takeover of a Canadian asset? It will be interesting to see whether the Conservatives oppose that.
As a little background, in July 2012, CNOOC, which is a majority Chinese state-owned enterprise, made a $15.1 billion takeover bid for Nexen, which is Canada's twelfth largest oil company. This is the largest proposed foreign takeover by a state-owned enterprise in Canada's history. It is the first in a likely wave of similar major acquisitions.
Nexen has 300,000 acres of oil sands assets, including an upgrader at Long Lake, as well as interests in a further 300,000 acres in shale gas assets. That is an estimated 37 trillion cubic feet of gas in northeast British Columbia.
The Chinese government owns almost 65% of CNOOC and it names the chair, vice-chair and other key directorship positions, giving the Chinese state significant influence over major decision making. This deal would give state-owned CNOOC full control of a Canadian company with significant oil sands reserves, as well as offshore oil assets in the U.S., Gulf Coast and North Sea.
In an attempt to win approval CNOOC has made some promises. It has promised to make Calgary the headquarters for CNOOC Ltd.'s North and Central American operations. It has promised to retain Nexen's current management and employees, to increase capital spending on Nexen's assets, to list CNOOC shares on the TSX and to maintain Nexen contributions to community and social commitments. Those are laudable promises.
Here is what CNOOC has not promised. It has not promised to maintain or increase value-added processing jobs in Canada, to improve environmental performance or to place Canadian interests ahead of those of its state owners.
Given the serious concerns that this deal raises, New Democrats are calling on the government not to oppose the deal at this point but to conduct open public hearings before making a decision on the deal. Both the business sector and Canadian workers in communities need certainty when it comes to foreign takeovers, but the current review process lacks transparency and accountability.
The current Investment Canada Act mandates that important transactions, currently over $300 million, be reviewed. The Conservatives want to raise that threshold to $1 billion, meaning many more transactions and takeovers of Canadian companies would occur without any government review whatsoever. However, these transactions must be reviewed by the Minister of Industry to determine whether they present a net benefit to Canada.
Again, the concept of “net benefit” is not clearly defined in the act. In 2010 in the wake of the rejection of the BHP Billiton bid for Potash Corp., the then-industry minister promised to clarify the meaning of “net benefit”, but has yet to do so, notwithstanding the fact that the government has had two years to do it.
In 2010, the Conservative government unanimously supported an NDP motion calling for a more transparent investment review process, including mandatory public hearings with affected communities and public disclosure of all conditions attached to approval of a takeover, along with enforceable penalties for non-compliance. The Conservatives have failed to live up to that promise as well.
I also want to comment a bit about domestic investment. The current has said that it is important to attract foreign investment to Canada. Right now we have $500 billion of domestic Canadian investment sitting on the sidelines.
I suggest that the government do two things: work on policies devoted to getting that Canadian domestic investment capital to work in the Canadian economy, and start keeping the promises it made in 2010 to the Canadian people to actually bring public, full, transparent review to these important economic decisions that affect all Canadians and the future of the Canadian economy.
Mr. Speaker, this is an important day: we finally get a chance to speak about a subject that our dear friends opposite have been trying to deal with in secret. This is the largest foreign takeover by a state-owned company ever proposed in the history of Canada. It is probably the first in a series of similar major takeovers, which is even more worrisome.
I am not an expert on energy issues. I am the member of Parliament for Longueuil—Pierre-Boucher, and people in my riding are worried about this issue, just as Canadians in other places are. When I see a poll reporting that 68% of people who usually support the Conservative Party do not approve of this agreement and that 72% of New Democrats and 73% of Liberals also reject it, I think it would take a real ostrich to hide its head that deeply in the sand and pretend that everything is fine. Do the Conservatives think that we will let them approve this and not do anything? That is a joke. It would be totally irresponsible, and I wonder what leads the government to take such an attitude. Is it its habitual short-sightedness? Is it the prospect of a quick profit? Is it doing the bidding of its friends in big business? Is it all of the above? I think it may be.
The oil sands are one subject we must study thoroughly. They are a precious source of wealth for Albertans and such a crucial dimension of today’s economy should be considered seriously and certainly not just glanced at by a little club in the back room.
Most people in my riding are distressed that we are so dependent on that source of energy. We are not the only ones expressing our disapproval; everyone on the planet feels the same way. We must develop alternative energy, but we must take good care of this resource we already have and we must use it to its full potential. We must create jobs for Canadians.
I am really quite shocked at the poll results. For example, the Abacus survey asked people if they agreed that Chinese companies should be allowed to purchase Canadian natural resource companies. That is ridiculous. Some 73% of respondents said they were uncomfortable with this idea, but the government wants to slide it past us, like a box of chocolates slipped under the door.
Clearly, Canadians want to talk about it. That is the function of this House, in fact. Parliament is the place where we talk. Today’s motion reads as follows:
|| That, in the opinion of the House, the government: (a) should not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations; (b) should immediately undertake transparent and accessible public hearings into the issue of foreign ownership in the Canadian energy sector with particular reference to the impact of state-owned enterprises; and (c) must respect its 2010 promise to clarify in legislation the concept of "net benefit" within the Investment Canada Act.
My neighbours opposite like to make decisions behind closed doors, but whether they like it or not, we have to talk about this. What right do the Conservatives have to give the impression that they received a mandate to make things happen and then say they do not have the time to talk about it? This type of attitude is shameful in our democracy. I wonder if, as usual, they are going to work alone and say that they have people who know what they are doing and that we, the social democrats, offer nothing more than pie in the sky. It is not true. This image they are promoting of us is pure fabrication.
The fact that they negotiate all manner of agreements in secret is bad enough, but it is even worse when we are talking about things as important as our natural resources.
The Conservatives committed us to procuring fighter jets that will take us decades to pay for. That is a very big problem. They did not take this purchase seriously. They made a bad choice, and it is the taxpayer who is going to have to foot the bill. However, in this case we are talking about our resources. This is strategic. It is a big deal.
If the government bothered to look at the situation of Canadians and Quebeckers in Montérégie, Longueuil and my own neighbourhood, it would be ashamed of how out of touch with reality it is. It does not see that 300,000 people have become unemployed since the crash. It does not see that people are outraged because they feel this makes no sense and they wonder what business this government has making decisions about everything without consultation. That is the issue. It is clear that the Conservatives are not being transparent about this, and that is what we cannot abide. We need to stop saying that they do not see what is going on.
We are saying that the Conservatives do not see the situation, but they do. It is not that they do not see it. It is not a mistake. It is that they do not want to see it. This government is running recklessly forward like a Cyclops who sees nothing but the target that its oil company advisors have programmed into its mind.
Opening the door to this type of takeover is the first step in handing over the future of the development of this Albertan natural resource to foreigners. While a consensus cannot even be reached on the transportation of this resource and decisions on increasing processing jobs are still under debate—and I would like to remind hon. members that we are in a Parliament—this government is making decisions in favour of very specific individuals and interests. The polls are very clear: everyone is concerned about this transaction.
Some foreigners will be at the negotiating table for this transaction. The Chinese government will do its utmost to convince Albertans that everything is fine and will tell Canadians that Albertans can continue to send their raw resources with no value added to benefit other countries.
After the proposed takeover of PotashCorp was rejected in 2010, despite repeated calls from the business sector and civil society, the industry minister at the time—my colleagues know who I am talking about—and the Conservatives did not keep their promise to reform this legislation.
Is there a club of business people somewhere—it needs to be mentioned because many of the 's former advisors are in on this major deal—who said that we needed to step on the gas so that they could make big money while there was still time?
In 2010, the Conservative government unanimously supported an NDP motion requiring mandatory public hearings involving the communities affected by a transaction under review and the public disclosure of any conditions attached to the approval of a takeover. The motion also called for the law to set out sanctions for non-compliance with the conditions of a transaction. Did the Conservatives keep that promise? Clearly, they did not.
By taking over Nexen, CNOOC would become a member of COSIA. Other businesses have expressed concerns about this. Even CSIS issued a warning:
|| When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests. The foreign entities might well exploit that control in an effort to facilitate illegal transfers of technology or to engage in other espionage and other foreign interference activities.
Everyone knows how far China's ambitions extend. In 2009, I visited Shanghai and Beijing. Demand for energy has since multiplied. A billion Chinese want access to a more comfortable standard of living, and we understand why. China is at the heart of all international development, as is India. All Canadians want to sell them products. We want to sell products, but not our country or our soul. We want to sell them products.
In Longueuil—Pierre-Boucher, people are aware that we must create wealth in order to share it. And although big projects like the oil sands or Plan Nord represent real business opportunities for a large number of suppliers, the resource itself belongs to the public.
Naturally, trucking firms and bus companies are pleased that we are developing these resources, because they transport them. Airlines are booming: they transport workers. They are pleased. These suppliers are connected to the major job sites. They create employment and pay taxes, but the resource belongs to the provinces.
Canadian engineers would love to work on plans to process these resources in Canada. However, if the Chinese government is literally on the board of directors, will it be more difficult to advance our interests?
The FIPA is an agreement that will allow CNOOC to circumvent the courts by using an arbitration process to claim damages and interest from the government for so-called current or future losses. And this will happen behind closed doors. That is also a huge problem.
As I am being signalled that I have only one minute left, I will conclude by saying that the New Democratic Party is in favour of trade agreements and investments that promote Canada's interests. We want jobs here, in Canada, for all Canadians, in all sectors.
Have Canadian interests been sacrificed to secure this agreement? That is the big question. Observers have noted that the advantages of this agreement, the FIPA, are skewed in favour of China, not Canada.
The Canada-China FIPA favoured by the Conservative government is in fact a big step backwards compared to similar agreements signed by Canada. Unlike the other agreements, this one does not require the arbitration of disputes to be carried out in a transparent manner that is open to the public and the media.
It is important to talk about this, and I am pleased that we are discussing this issue today.
Mr. Speaker, I am thankful for the opportunity to speak to the motion before the House. In my brief remarks today, I would like to give members an overview of our economy and what our government is doing to keep our country strong and competitive in what is a volatile and uncertain global environment.
I will be splitting my time, Mr. Speaker, with the member for .
Canada's current economic and fiscal health record is the envy of many other nations today. Thanks to the prudent fiscal and economic decisions made by our government before the recession hit in 2008-09, Canada's economic and fiscal health today is stronger than most other developed nations.
When faced with an unprecedented global crisis, our government responded with an economic action plan, which stimulated the economy, protected Canadian jobs during the recession and invested in the long-term growth. It is also been both outstanding and widely recognized.
For example, the Canadian economy has achieved one of the best performances on jobs and growth among the G7 in recent years. We have recovered and exceeded all the output and all the jobs lost during the recession. Since July 2009, almost 770,000 net new jobs have been created. Virtually all jobs created since then have been full-time positions. Real GDP is now also well above the pre-recession levels.
In addition, Canada has the distinction of the world's soundest banking system for the fifth year in a row, as affirmed three weeks ago by the World Economic Forum. Forbes magazine has ranked Canada as number one in its annual review of the best countries for business. Three credit rating agencies, Moody's, Fitch and Standard & Poor's, have reaffirmed the top rating for Canada and it is expected that we will maintain their AAA rating in the year ahead.
Canada is still growing, but we are not immune to the downside risks originating outside our country or, in fact, of the economic challenges faced by some of our largest trading partners.
Our continued response to the global economic uncertainty has been our economic action plan. To ensure that Canada's finances remain sustainable over the long term, our government has introduced a host of strong, economic measures to foster more growth, more jobs and continued long-term prosperity.
These actions to improve conditions for business investment include: expanding trade and opening new markets for Canadian businesses; keeping taxes low for job-creating businesses; strengthening business competitiveness; and further strengthening Canada's financial sector.
Our government is also determined to return to balanced budgets in the medium term. Our government is taking a balanced approach based on prudent economic growth presumptions between supporting jobs growth and implementing our plan to return to balanced budgets over the medium term. It is a goal that we are all well on our way to achieving and at a pace other developed countries cannot match.
In two years we have already cut the deficit in half. We did it by ending our targeted and temporary stimulus measures and by controlling the growth of new spending.
Canada expects to achieve its G20 commitments to halve the deficit by 2013.
We also plan to stabilize or reduce total government debt-to-GDP ratios by 2016, as agreed by the G20 leaders at the summit in Toronto in June 2010.
Finally, I will say a few words about Canada's tax advantage.
To prosper in a competitive global economy, entrepreneurs and businesses also need a competitive and efficient tax system. That is why early on our government introduced the tax relief required to create jobs and growth throughout the economy. In 2007, prior to the global crisis, we passed a bold tax deduction plan that would help brand Canada as a low tax destination for business investment. The final stage of our step-by-step reduction in the fiscal business tax rate came into force at the beginning of this year. It is a culmination of a process that has seen the business tax rate fall from 22.12% in 2007, when we set our goal, to just 15% today.
I do not have to tell anyone in this room what this investment-friendly tax environment means to the future of Canada's economy and jobs. It is a broad-based, fiscally durable and structurally sound—
Mr. Speaker, I am pleased to have the opportunity to speak to the important issue of how foreign investment benefits Canadians and the Canadian economy.
With the extensive media coverage in newspapers and television of recent proposed foreign investment transactions, this is certainly top of mind to many Canadians. Of course, many discussions have been held across the country with respect to the particular acquisition referred to in the motion. This interest is positive because of the importance of foreign investment to Canada. It is a good thing that more Canadians are becoming aware of it and are thinking and talking about it.
As a result of our government's careful decisions prior to the worldwide economic downturn in 2008, Canada is in better shape economically than many of its peers. Despite current global economic uncertainty, we have achieved one of the best performances among the G7 countries, with almost 770,000 net new jobs created since 2009. This is the strongest job growth among the G7 countries during a global recovery.
One of the reasons for Canada's economic resiliency and success over the most recent difficult few years is our government's success in attracting quality foreign investment. This government believes that Canadian companies can compete with the world's best. For that reason our government continues to welcome foreign investment that benefits Canada. The fact is that foreign investment, both from foreign companies into Canada and by Canadian companies in foreign jurisdictions, is absolutely critical to the health and wellbeing of the Canadian economy. Foreign investments can introduce new technologies and business practices that promote economic growth, increased employment and more innovation here at home, while at the same time providing Canadian business with better access to new markets and a place in the global supply chain.
Our government recognizes that foreign investment can bring some of the most productive, specialized and successful firms in the world to Canada. This connection with other countries can result in some of the highest paying jobs for Canadians. Statistics Canada research has shown that foreign-owned companies operating in Canada have higher labour productivity, pay higher wages and contributed nearly 15% of total business expenditures on research and development in 2010.
The government also recognizes that foreign investment provides opportunities for Canada as a player in a globalized economy, connecting Canadian firms to the rest of the world. This allows our firms to grow and compete so they can become national champions and global industry leaders.
In short, foreign investment both into Canada and by Canadian firms abroad is a win-win proposition for Canadians and the economy.
How well is Canada performing against other countries? We need to put all of this in context when we look at the particular legislation that has been brought into question.
Since the mid-1990s, Canadians have held a larger interest in foreign operations than non-Canadians in companies operating in Canada. As of 2011, Canada has attracted $607.5 billion of foreign investment into Canada and Canadian businesses have invested $684.5 billion abroad. Therefore, Canadian businesses are doing well outside of Canada.
Over the past few years Canada has attracted a significant amount of foreign investment relative to its share of global GDP and relative to other developed countries. For example, since 1980 Canada has received a greater share of the global stock of foreign investment than Australia, a comparably developed country. Indeed, Canada's stock of inward foreign investment as a percentage of our GDP has been increasing since the early 1990s.
Furthermore, Canada's stock of outward foreign investment as a percent of GDP has been increasing since the late 1970s. In terms of outward foreign investment performance, Canada has consistently out-performed other peer countries since 2000, with the exception of the UK.
Foreign investment in Canada comes from many sources. As of 2011, over half of the foreign investment stock in Canada came from the United States. Other key countries include the United Kingdom, the Netherlands, Japan, Brazil and France. Moreover, investment from emerging markets has been increasing substantially in recent years.
With a rigorous investment review regime in Canada, Canada welcomes investments that are of benefit to Canadians. We must always remember that and put that in context.
Key sectors of the Canadian economy have benefited from foreign investment: first, manufacturing; second, mining, oil and gas; and third, the financial services sector. Manufacturing alone received 35% of Canada's direct foreign investment inflows, followed by mining, oil and gas at 16.4% and financial services at 15%.
Canadian businesses have been leaders in investment abroad. In particular, 39% of investments by Canadian businesses in other countries have been within financial services and this share has grown in importance during the last decade. Mining, oil and gas was the second most important sector with a share of about 17% of Canadian outward foreign investment. Manufacturing was the third most important sector with a share of 14%.
It is important to remember that foreign investment works both ways. Canadians benefit both from the ability of our companies to invest and operate abroad as well as from the opportunity for foreign businesses to set up shop in Canada, employing Canadians, making connections with other Canadian firms and giving consumers more choice.
For Canadian businesses to expand and compete successfully throughout the world, we must continue to be open to foreign investment to demonstrate to our trading partners that we understand that protectionism is not the path to economic growth. Our government is committed to sending the message to investors around the world that Canada is a safe and stable place in which to invest and to do business.
This government will continue to bring the benefits of foreign investments to Canada by providing the right economic climate so that firms in Canada will continue to prosper and create jobs for Canadians. We will also continue our work to secure access to foreign markets in order to ensure the continued success of our own Canadian businesses abroad.
Let me be clear. This government knows that not all foreign investment will be of benefit to Canada. Canada is open for business, but it is not for sale. That is why we have a rigorous review process under the Investment Canada Act. The net benefit factors are clearly set out in the act and are available publicly so that investors and Canadians know what is of importance to Canada in reviewing a proposed investment. Obviously, these are broad considerations and that is a factor in the decision making.
Briefly, the factors relate to the level and nature of economic activity in Canada; the degree and significance of participation by Canadians; productivity, efficiency, technological development, product innovation and variety; how it affects competition in Canada; Canada's ability to compete in world markets; and compatibility with national industrial, economic and cultural policies, including policies of provinces that are likely affected. In fact, a province that is affected by a decision has significant input. These are the factors and principles that are taken into consideration. If the minister is not satisfied that a reviewable investment is likely to be of net benefit to Canada, the Investment Canada Act allows him to block the transaction.
This government is committed to protecting the security of all Canadians. The Investment Canada Act allows the government to review an investment when there is reason to believe that it could threaten or impair Canada's national security.
Our record in safeguarding Canada's national security is clear. The Investment Canada Act has been around since 1985, but until this government took action, it did not contain a mechanism for safeguarding Canada's national security. Recognizing the global security context, in 2009 we put in place this particular section to ensure that Canada's national security interests will continue to be safeguarded.
Our approach was in line with what other developed countries had done in a post-9/11 world. It brought Canada up to the best practices of most of our trading partners for reviewing investments on national security grounds and it did so while being consistent with our obligations and international trading agreements.
Let me be clear. Protecting Canada's national security will always remain a top priority for this government. Our government has a reputation for welcoming foreign investment and will continue to do so when that investment provides a net benefit and does not impair the national security of Canadians. Those principles will guide the decision-making process.
This question of foreign investment will remain an important one for the economic well-being of Canadians. I am pleased with the work our government has done to date, and I am confident we will continue to attract more companies, better high-paying jobs and stronger economic growth to support hard-working Canadians.
Mr. Speaker, I am very pleased to speak to this opposition motion, particularly since it directly concerns the western provinces. People where I come from perhaps do not realize to what extent this could have an impact on them in the future. It is important to know what kind of precedent we want to set and how we want to improve the existing legislation. I also want to congratulate my colleague from for having introduced this motion. Before I forget, I am pleased to share my speaking time with the member for , one of my wonderful colleagues whom I am looking forward to hearing speak on this issue.
Let us come back to the issue before us today. My colleague from repeatedly tried to get our colleagues opposite back on track by asking them why they could not stick to the subject. The issue before us goes beyond economic considerations. These are fundamental considerations to do with fairness and being masters in our own house. The protection of our natural resources is at stake.
As several of my colleagues have said since this morning, the issue is not so much whether or not one is for or against investments, but whether these investments are responsible and beneficial to Canadians and our industries and whether they allow us to make the most of our natural resources both at home and abroad.
Before continuing, I would like to speak about another extremely important issue. Our motion includes two important points. The first point concerns public hearings, and the second point, clarifying the notion of “net benefit”.
I am going to start by talking about public hearings. A definition was proposed by the former minister of industry and the current president of the Treasury Board. A colleague and I saw an article published this morning where the minister was quoted. He stated that supporting our motion would mean breaking the law and that it would be illegal to hold a public consultation. He is wrong.
If you do not read the legislation carefully, you could be forgiven for thinking that he is right. The Investment Canada Act places a great deal of importance on the confidentiality of information, but in paragraph 36(4)(c), it states that information that is already public is exempt from the confidentiality clause. Public consultations can therefore be held. After all, when it comes to the sale of Nexen, a number of facts are already in the public realm. For example, a submission that the company made to the Securities and Exchange Commission revealed that the Communist Party of China has shares in this company. There are also concerns regarding national security, which were recently raised in a public report to Parliament. These facts have already been made public. So there is no reason to consider public hearings illegal.
My colleague from spoke this morning about the motion that our party and our late leader, Mr. Layton, had moved regarding a review of the Investment Canada Act. That particular case had to do with BHP Billiton. I was not here at the time, but all the members of the House, across party lines, unanimously supported the motion.
I will read an interesting part of that motion:
||...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;
I am summarizing here because the motion is much too long. However, we can see that it talks about public hearings. This motion was unanimously adopted by the House. This is interesting, because the former industry minister said that this would be illegal. So I have a hard time understanding why he supported such a motion in 2010 but will not support the current motion, seemingly on behalf of his own government. That does not make sense. It is not too much to ask for public hearings.
At the risk of repeating what has been said by many of my colleagues, this is not a matter of being for or against the purchase. It is a matter of creating a thorough process to avoid setting a precedent that could raise difficult issues or lead to problems in the future. We must also hear what Canadians have to say on this subject.
That is not too much to ask. I think that is the very essence of democracy. I do not understand why the Conservative members are so afraid of holding public hearings on this. It could be a positive for them. In the future, they could refer to these public hearings once a decision has been made, since the process will have been thorough.
That said, I would also like to talk about the second aspect of our motion, which deals with the definition of “net benefit”. I am not a lawyer, but any lawyer would tell you that it is important to clearly define the terms used in a bill. The government accuses us of being against entrepreneurs, business people and investment. But investors and business people are calling for a clear definition.
I have spoken with business people in my riding, and they want clear regulations. They want to know whether or not they are protected. By providing a clear definition of what constitutes a net benefit, we would improve the business community's situation and create a healthier environment for investing in Canada, for both the public and shareholders.
Earlier this morning, a Conservative member said that shareholders had voted in favour of the CNOOC takeover of Nexen. There are a few important points to raise in this regard. First, a public hearing does not prevent shareholders from expressing their opinions. After all, they are investors and individuals. There is nothing about this process that would prevent them from sharing their opinions and explaining to the public why they voted in favour of the takeover.
As the hon. member for mentioned, he was the only member of Parliament at the meeting to better understand this issue. When it comes to natural resources, it is important to be, as we say in Quebec, “maîtres chez nous” or masters of our own domain. I think that all Canadians feel the same way about this. Our natural resources are an asset. It is important that everyone be involved, not just shareholders. Shareholders benefit from resources that are dear to us, that are the heart of our country's development. This is a very important issue.
In closing, I would like to say that it was very important to me to express my opinion on this issue. In my riding, in eastern Canada and in Quebec, not everyone is aware of this issue because it primarily affects the western provinces.
It is important to realize that precedents can be dangerous, problematic and worrisome. This takeover could cause harm to other sectors later. Natural resources are very important in Quebec. How do we know that this will not happen in the future under different circumstances? We must be vigilant and rigorous. That is why I am proud of our motion.
Mr. Speaker, I want to thank the hon. member for for the question.
Indeed this is a matter of transparency, as I alluded to in my speech.
As long as there are issues that divide the House, then the opposition motion makes perfect sense.
Today we are not talking about the decision in and of itself, because we know there is a process to be followed. We are making two simple requests that will benefit the public and investors.
As my colleague indicated, we are talking about transparency, public hearings and clarifying certain rules and certain definitions.
Once again, when we talk to business people and investors, they tell us that having clear rules is good for them. It is also good for everyone to have clear rules. That is what we are advocating today.
Canadians across the country think that is important. The other MPs from Quebec, Alberta and the other provinces and I can honestly say that everyone thinks it is important to have transparency. It cannot be bad.
As I was saying, it can even be good for the government because at least it would be sure, when making decisions, that it got everything it could out of the consultations and that it applied the rigour that is needed in handling matters as complex and sensitive as this one.
Mr. Speaker, I appreciate the question from my colleague, who would like to hear more about the 2010 motion. Quite frankly, I unfortunately do not have the answer.
I have a great deal of difficulty reconciling the logic that prevailed back in 2010, when the motion was unanimously adopted, and today's logic. We hear very little, if anything, about that in our colleagues' speeches.
As I mentioned in my speech, there are also the comments by the former industry minister. This morning, he told journalists that it would be illegal to hold public hearings. According to section 36, there is enough information to which the public has access, that it would not be confidential and we could actually hold public meetings. He obviously thought otherwise at the time because he supported our motion.
The motion was too long, and I did not read it in its entirety. My colleague read a number of excerpts that actually raise other important points, such as the protection of jobs in Canada and the protection of sustainable development. These are all important issues of interest to consumers and business people.
The key word is “rigour”. A rigorous process is needed to properly manage an issue that is so complex and will have such significant consequences with respect to our natural resources.
Mr. Speaker, I am pleased to speak today to this opposition motion concerning the takeover of the Canadian company Nexen by the Chinese company CNOOC.
Essentially, the motion sponsored by the NDP's industry and natural resources critic calls for three things. First, it calls on the government to undertake public consultations before making a decision concerning the plan to acquire Nexen. Second, and more broadly, it asks the government to hold consultations concerning the entire issue of foreign ownership in the Canadian energy sector. Third, the motion asks that this exercise be used to clarify the concept of “net benefit” to Canada when foreign takeovers are reviewed under the Investment Canada Act.
Before going any further, I would like to do a brief review for the people listening, because I am sure there are people in my riding, Rivière-des-Mille-Îles, who are listening to me now and do not see how this issue affects their lives. But we have to remember that even though this is happening in Alberta, the issue affects all of Canada and all Canadians. This is the biggest foreign purchase offer by a government-owned company in the history of Canada and the first in what will probably be a series of similar major acquisitions.
In July 2012, the China National Offshore Oil Corporation, CNOOC, put in an offer to purchase Nexen, an oil company based in Calgary, for $15 billion.
It is important to know that CNOOC is 64% owned by the Chinese government and that a number of the company's key executives, including the president and vice-president, are appointed by the Chinese government. If the transaction were to go through, as the Nexen shareholders hope, it would be the biggest takeover in Canada by a foreign state-owned corporation, and as I mentioned, some people are afraid that this is just the beginning.
By getting its hands on Nexen, the Chinese government would control the 12th largest oil company in Canada, a company that has interests in 300,000 acres of oil sands and another 300,000 acres of land that is suitable for shale gas drilling.
We have to realize that this is a growing trend. Canada has already authorized multiple acquisitions of Canadian companies by Chinese companies in the natural resources sector. According to information compiled by the CBC, these transactions add up to $23 billion dollars since 2005. Consider, in particular, the investments by the China Petrochemical Corporation in Syncrude, and various investments by the China National Petroleum Corporation in Canadian oil and gas.
To win over the Canadian regulatory authorities, CNOOC has promised to keep the company’s head office in Calgary, maintain the same number of jobs and keep the existing management team. These fine promises remind me of the commitments made by the Anglo-Australian multinational Rio Tinto when it got hold of Alcan in 2007. The brief experience we had with that transaction showed how detrimental that loss of control was for workers in Quebec. And we learned recently that the corporation was going to suspend its activities at the cathode production centre at the Arvida plant and cut management positions at the Shawinigan aluminum smelter.
We also have to realize that CNOOC's environmental practices raise eyebrows among some observers.
For example, in June 2011, two consecutive spills at CNOOC project sites dumped 204 tonnes of oil and polluted more than 6,200 km2 of the ocean surface in China’s Bohai Bay. The company did not report the spill until 30 days later. In addition, the site operator said that CNOOC insisted on using an affiliated company rather than going with a clean-up service that offered faster deployment.
All of this is of particular concern because the Conservative government refuses to require that corporations honour the environmental commitments made in the foreign investment review process. It is even less likely that Canada will require a state corporation that enjoys the support of the Chinese government to honour its commitments.
In addition, the new foreign investment protection agreement signed by the Conservative government and China includes investment protection measures that give special rights to foreign corporations.
CNOOC could wield more power than Nexen vis-à-vis the Canadian government and block environmental restrictions.
As we know, CNOOC and the Chinese government have a dismal human rights record. For example, a project in Burma was controversial because 3,000 oil wells were dug by hand and more than 300 acres of agricultural land were forcibly confiscated.
What is most ironic is that this takeover of a Canadian company by a Chinese state-owned company is taking place under a government that, not so long ago, shied away from the Chinese market because of the Chinese government's poor human rights record.
In 2006, for example, the Prime Minister said:
|| I think Canadians want us to promote our trade relations worldwide, and we do that, but I do not think Canadians want us to sell out important Canadian values—our belief in democracy, freedom, human rights. They do not want us to sell that out to the almighty dollar.
On July 28, 2012, the editorial writer for Le Devoir wrote:
|| At the slightest diplomatic chill, the Chinese government will not hesitate to blackmail its trade partners by threatening to close facilities or interfering in the markets to choose its suppliers and customers.... It will thus be up to the Prime Minister himself...to decide. However, based on the statements he made in 2006 and those he is making now, the Prime Minister's priorities have clearly changed: he is now focused on oil patch investments and trade opportunities with Asia. How can we trust that Canadians' long-term interests will be seriously considered in this process?
For many observers, the Chinese government's control over CNOOC and the possible control this company could have over a resource as strategic as Canadian oil represent an unacceptable potential threat to national security.
The Canadian Security Intelligence Service recently warned this Parliament. I would like to quote some of what it said:
|| When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests. The foreign entities might well exploit that control in an effort to facilitate illegal transfers of technology or to engage in other espionage and other foreign interference activities.
All of these legitimate concerns bring us back to the process used by the government to examine this transaction. The bid is subject to a foreign investment review process under the Investment Canada Act to determine whether it constitutes a “net benefit” to Canada.
This process has some serious shortcomings. First, it takes place in secret behind closed doors. Canadians will not be consulted. They will not be able to provide information on the effect the transaction will have on employment, the environment or the energy sector in general.
Furthermore, the process will not take into account CNOOC's track record with regard to human rights or the fact that this company has already caused oil spills and environmental disasters. This type of takeover must not be examined quickly and informally.
Given the serious concerns this transaction has raised, the NDP is calling on the government to hold public hearings before making a decision. We also believe that the government should take advantage of this opportunity to broaden the debate and hold consultations on the whole issue of foreign ownership in the Canadian energy sector.
As my colleagues already mentioned, companies, workers and communities need certainty with regard to foreign acquisitions, but the review process for these transactions lacks transparency, accountability and predictability.
In closing, I would like to encourage all of my colleagues, regardless of party affiliation, to support this NDP motion.
Mr. Speaker, it is my honour to speak today to the opposition motion regarding the Investment Canada Act.
I will be sharing my time with the fine member for .
I would like to ensure that everyone understands the six factors listed in the Investment Canada Act and why they are important as part of the review process of the act as it stands today. I am working under the assumption that everybody in the House has read them. However, I want to ensure that my constituents in Burlington have an understanding of the process now, what the law is now and what the evaluation criteria are on foreign investment in Canada.
I will list the six criteria and then I will talk about why they are important. The first is the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, on resource processing and on the utilization of parts, components and services produced here in Canada.
The second of the six criteria is the degree and significance of participation by Canadians in the Canadian business.
The third criterion is the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada.
The fourth factor considered in the Investment Canada Act, which the minister will review and have staff provide information on, and not just on this particular deal that seems to be today's topic but all deals by foreign entities, is the effect of the investment on competition within any industry or industries in Canada.
The fifth criterion is the compatibility of the investment with national, industrial, economic and cultural policies.
Finally, the sixth criterion is the contribution of the investment to Canada’s ability to compete in world markets.
Those are all the criteria set out in legislation, easily found on the Internet and readable by everyone, including those who are investing in or wish to invest in Canada. They provide an understanding of the criteria set out in law for their decision making in terms of pursuing a Canadian company. Of course, the Investment Canada Act is important for foreign companies buying Canadian companies. There are no restrictions on Canadian companies purchasing other Canadian companies. It does not affect any industrial change that may happen when companies want to expand or change product lines within Canada. Canadian companies are more than welcome to make those investments within the country. However, we do need a regulatory framework, which we have, that allows the government and the minister of the day to look at what is good for Canada in the overall picture of a foreign purchase.
I will begin with the last criterion, which is the contribution of the investment and Canada’s ability to compete in world markets, because it is important. It is the criterion the minister will consider by asking if it will make Canada more or less competitive. There is no criterion that says we want to hurt Canada's ability to compete in the world markets.
When we look at any industry today, we need to ask if it will help Canada to be more productive and play a bigger role in the world marketplace. Let us face it, we are not kidding anybody. Everyone operates in a global market. Very few businesses rely on the local market, although some retail businesses do, but even in my community of Burlington, the largest employer, a pork slaughterhouse that packages materials, has 800 employees and its major customers are overseas. It sells in Canada and in North America but it is able to reach out to other parts of the world. The company happens to be owned by an American company, with some local equity and local owners involved.
However, everybody operates in that field and we need a criterion, which we have in the Investment Canada Act. When we look at somebody else buying a Canadian company, we need to look at whether we would be better off having access to marketplaces that we might not have had access to because the Canadian company was too small, or it did not have the delivery network that often would come along with an acquisition or where another company in another part of the world have distribution networks that were not available to the Canadian company. Vice versa, if it reduces our ability as a Canadian company to access other markets or reduces our ability as Canadians to produce and sell around the world, that criterion can be used to stop an acquisition. At least it is part of the criteria.
I will talk about the compatibility of the investment with national, industrial, economic and cultural policies. We have those criteria in there so if there is a purchase of a property, or a business or assets that have a cultural impact on Canada, we have the criteria by which the minister can evaluate what the impact will be on the cultural identity of Canada. If it will hurt the cultural identity of Canada, it is an opportunity for the minister of the day to say that it is not a good investment for Canada because it is against our cultural policies. It gives the government an opportunity to evaluate it. This is the kind of review that will occur on any acquisition that triggers the Investment Canada Act.
Regarding the effect of the investment on competition within the industry and industries in Canada, a key component is we do not think it is a good thing for foreign investment to come into Canada and create monopolies. We on our side of the House believe in competition. We have made policies, whether through free trade or industry, through our industry committee and our industry minister, to increase competition in telecommunications. We think competition provides better products and services to individuals because they have more choice. It drives down prices normally and also drives innovation and change because the businesses want to keep up with the competition. If they do not have any competition, they do not need to change, or improve or provide customer service. However, through competition and innovation that will happen. It is a criterion of the Investment Canada Act that is presently in place, one that the current and previous ministers have used to evaluate where we go.
That is only three of the six. There are six criteria of which everybody needs to be aware. Investments by foreign entities in Canada are not made without any scrutiny, as was indicated by the previous questioner that these things were not being applied. The minister will look at each one, whatever the circumstance might be, and at how it affects Canada. Those decisions will be made in the best interests of Canada in its long-term economic growth and prosperity.
Mr. Speaker, my colleague from did an outstanding job of presenting his arguments.
I wish to speak very briefly about this important topic that has relevance to all Canadians and for future generations of Canadians.
Foreign investment, the Canada Investment Act and Canada's economic prosperity are all closely linked. Our government has engaged with Canadians and with Canadian companies to hear directly from them what is of most pressing importance. At all times, we have heard the same thing. It is the economy, employment and how to make Canada a better place for businesses to grow and succeed.
Our government has focused on the economy with our economic action plan. We are ensuring that Canada's economic foundation remains strong. Despite the economic downturn of the past few years, we continue to lead the developed world. Canada is a premier destination for investment.
Our government has taken the necessary steps to ensure Canada continues to attract investment that promotes economic growth, job creation and prosperity for hard-working Canadians. We recognize foreign investment creates many benefits for Canada. For example, investments often result in new technologies being adopted in Canada. We all know technology is linked to increased productivity.
Our government has been a strong supporter of science, technology and research. We know these are the key building blocks of innovation. We know science powers commerce. We also know that to continue to be successful, Canada must drive product and service innovations into every corner of our economy.
Foreign investment increases the amount of research and development conducted in Canada. In 2010 nearly 15% of business expenditures on research and development in Canada came from foreign investment. Therefore, foreign investment is important to Canada because it helps to support and improve our economy and, most important, create jobs for Canadians.
At the same time, Canada does not exist in a vacuum. Canada must compete in a globalized economy, and that world is changing quickly.
While Canada has led the developed countries since the economic downturn in 2008 due to our government's careful stewardship of the economy, new challenges are emerging. Economic powerhouses in Asia and Latin America have stepped onto the world stage and have taken up leading roles. In addition, the economic rise of Asian countries is well-known. These new emerging powers are both targets for investment and sources of investment. Canada must both compete with them to attract investment, while at the same time try to attract investment from them.
The Investment Canada Act was established to encourage investment in Canada that would contribute to economic growth and provide for the review of significant investments in Canada by non-Canadians in order to ensure such benefit to Canada. The act was brought into force in 1985 to liberalize the foreign investment review regime, which had seen the precipitous drop in inward investment. The Investment Canada Act replaced the Foreign Investment Review Act, which was in place from 1973 to 1985. The Trudeau era FIRA process was not well-received and it did not do a very good job at helping Canadians attract investment. Given the foreign investment review act process, Canada's image as an attractive investment destination was in fact damaged.
After 1977, there was a sharp reduction of direct foreign investment and an outflow of capital from Canada. The 1982 recession further weakened the support for the Foreign Investment Review Act. By 1983, it was clear that the act was due for major modifications.
The Investment Canada Act replaced the foreign investment review act and with that marked a shift in purpose. Recognizing the beneficial effects of increased capital and technology on the economy, the Investment Canada Act encourages investment in Canada that contributes to economic growth and employment opportunities. The act distinguishes between investments in cultural business and other investments. Since June of 1999, the Minister of Canadian Heritage has been responsible for the notification and review of investments in cultural businesses. The Minister of Industry is responsible for all other investments and for general administration of the Investment Canada Act itself.
Canada's foreign investment policy has been one of continued liberalization. Our government has built on this by introducing legislation to increase the monetary threshold before reviews occur and removing some sectoral limitations. At the same time, recognizing the global security context, our government introduced guidelines for the review of investments by state-owned enterprises and rules for screening investments for national security concerns.
With respect to foreign investments, our government has a sound process in place to ensure they benefit Canadians. Earlier this year, we introduced targeted amendments to the Investment Canada Act that provide greater transparency to the public, more flexibility and enforcement, and an alternative to costly and time-consuming litigation.
Prior to those changes, in 2009, the government made amendments to the Investment Canada Act to provide the minister responsible flexibility to provide more information to Canadians on the review process directly. The government's focus is to make sure the Canadian economy remains competitive and productivity gains are achieved.
Sound policies and a world-class climate for business are essential for making Canada a prime destination for investment. To that effect, our government sets policy priorities that reflect this view. We create programs that support strong innovation, we put in place a globally competitive industrial policy and we support an attractive business environment that promotes and rewards entrepreneurship. Just as important, we must lead by example so that Canadian businesses are welcome investors in foreign countries, allowing them to expand their operations into new markets and to compete successfully with the best in the world.
Mr. Speaker, I am pleased to have an opportunity to speak to this, and I will be sharing my time with the member for .
We are speaking to a motion that says that, in the opinion of the House, the government should not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations, and these accessible public hearings should be on the issue of foreign ownership in the Canadian energy sector with a reference to state-owned enterprises.
So far in the debate what I have learned from the government side is that in terms of policy and direction on this, the Conservatives are simply not there. They do not have the capacity to make a decision that is in the public interest because they do have the policies that allow them to analyze public interest.
In this world today, state-owned enterprises are the norm in the energy sector across the world, whether it is Mexico, Norway, Brazil, Venezuela—in fact in most of the OPEC countries—and 75% of all oil resources are under the control of states worldwide. This is the reality of the oil and gas industry today. Only 7% of all oil and gas reserves are in countries that have a free rein on investment in oil and gas. Quite clearly, Canada is an exception, especially among energy exporting countries.
I think of all the major energy exporting countries, and Canada is the only one that allows a free rein on investment. We have a situation in which Canada is not lined up with the rest of the world. We must explain why our competitive system, as we have heard the Conservatives describe it, is going to work going forward for our children and grandchildren. In terms of reserves, 13 top oil companies are state-owned. This game is afoot around the world and where is Canada? It is stuck in the mud.
What is the feeling in Canada about energy? The general agreement, whether it is the premiers or the industry itself, is that we need a national energy strategy. Right across the country, there is a great deal of concern that we do not have one. This situation has been facing the Conservatives for the last six years, their time in government, and they have stonewalled on it. They have done nothing.
It would be easier to support ownership of any kind if there were a Canadian agreement on the maximizing of benefits from our non-renewable and finite energy sources. These are non-renewable. These are finite. When we take them out of the country, we have less in the country, not more. So the bank account is being depleted as we speak, with our resources. What is the net benefit to Canadians from that?
In the absence of a national energy strategy, how well does the laissez-faire approach work? How well is it working in the oil sands we are talking about today? One can safely say that it has been characterized by a chaotic and uncertain approach that jumps from one idea to the next. There is no control, no understanding of the environmental impacts of the oil sands. In fact, the industry itself has turned its back on the major agencies that were set up to study it and said they will not work.
Take upgrading bitumen, which is a big component in the oil sands, a big part of the money and the benefits that can be made by Canadians. In 2007, the industry was prepared to upgrade all the oil in Canada. It was prepared to invest $100 billion in upgrading. How much is it ready to do today? Nothing. There is no upgrading capacity that is moving forward today in Canada, so we have lost that. Why did industry change so rapidly? What is it about our system that allows that kind of chaotic behaviour?
There is a lack of effective research. If we look at the numbers, they show that research in the oil sands is far smaller than it is in most other aspects of the international energy scene. Why is that, when we know that the issues around the development of the oil sands are complex and become more complex the deeper we go in the ground? At a breakfast held here in Ottawa before the summer break, a professor from the University of Calgary explained very clearly what is going to happen as companies dig deeper into the oil sands and how much more difficult that is going to become.
What about the direction for markets? We are proposing a pipeline to the United States to upgrade the bitumen in old refineries down there that were designed for Venezuelan heavy oil. In fact right now BP had one of its licenses turned down to operate one of those upgraders in the United States because it did not meet environmental standards. That is one idea that we have had.
The other idea is to market it in China, in the far east, through the gateway pipeline, though it opposed by almost every person along that route. The idea is to export raw bitumen to China at the same time we are exporting liquefied natural gas to China. We are going to combine them there in an upgrader. How does that work for Canada?
We have an industry with real problems, public relations problems in the extreme with the sale of a product that we cannot manage. Moreover, we cannot maximize the return on investments. We are squandering our resources on quick and dirty action in those oil sands. That is what is happening.
How can we as Canadians make a decision today about the value of transferring the ownership of one Canadian company to a state-owned enterprise in China when we do not have a plan that we can point to for the people who are taking over the industry, saying that this is what we want them to accomplish if they come into the country, that this is how we want them to develop our country? It is not there.
What about our neighbours, the United States? What do they think about this? There is bipartisan horror at the idea of turning over 1.3 million acres of Gulf of Mexico oil leases to the Chinese. Why is that? It is because the U.S. understands the nature of offshore oil. They understand that the goal in their country is to develop the resources so that they are energy independent. They know that very well. That is why they are standing up. They are standing up for the interests of the United States.
Two weeks ago I brought up the matter of the leases in the Arctic. We just gave up a lease in the Arctic of over 900,000 square hectares to a company with almost no assets, a company that we knew was going to turn around and sell it to someone else, maybe the Russians, the Koreans, or the Chinese, who have icebreakers and deep sea drilling capacity.
Does our minister even have the power to say no to a transfer? No, he does not under the Canada Petroleum Resources Act that governs northern petroleum development. He does not have the ability to say no to a transfer.
Right across this country, we are failing our children and our grandchildren with our laissez-faire approach to an industry and energy source that countries right around the world are standing up for themselves and taking advantage of us for. That is what is happening right around the world.
Where is Canada? It is without a strategy, without a direction, flailing in the wind. That is a terrible thing to have to say in this Parliament.
Here we have a chance to change it. If the Conservatives get onside and start holding public hearings on these issues that are so important to us, that can make the difference. Stand up for Canada. Make a difference.
Mr. Speaker, I appreciate this opportunity to enter this debate on the NDP's opposition day motion.
We should say at the outset, in case people are just tuning in now, that the terms of this motion are simply to insist on public consultation to examine in a fulsome way the takeover deal of Nexen. This is not a debate about whether we should or should not allow the deal to go through. I have my own personal views on that, but we should be clear that we are calling for the inclusion of the public and a full examination and full due diligence of this takeover deal. That is all this debate is about.
If there is one thing we want to make clear in the context of this debate, it is that Canada is open for business but that Canada is not for sale. That must be driven home. Believe me, if there were a full and true examination and consultation, the Conservative Party would have a heck of a job convincing Canadians that it is in their best interest to have a foreign nation state buy our birthright from under our feet and pay cash on the barrelhead for our future in the energy field.
The Chinese are on a global acquisition frenzy. That is not overstating things. It is predicted that over a trillion dollars will be disgorged from China to acquire natural resources, pulp and paper mills, and whatever energy and resources they possibly can.
Believe me, it is the high profile companies like the China National Offshore Oil Corporation, CNOOC, that are interested in buying Nexen. However, it is simply one of hundreds of Chinese corporate arms of China Inc. The audacity of China Inc. in this global acquisition frenzy is astounding. Other ones include Sinopec, Chinmetals, PetroChina, the China Investment Corporation, and thousands more unknown Chinese corporations owned by lower levels of the Chinese government, which are beginning to venture abroad, gobbling up assets.
We would be naive, irresponsible and crazy not to examine this motion in a full, comprehensive way and put in place guidelines and rules to respond to this global acquisition frenzy.
We are blessed in this country with an abundance of natural resources. It is our children's future, and how it is managed and developed is critical. Therefore, it is not audacious on the part of the NDP to be calling upon the government to open the door to a public debate and consultation. Let us hear from the best minds in the country, for and against this idea. Let us put it all out there and have a national conversation on whether we do or do not approve of this particular takeover.
We have to keep in mind that this is not any ordinary foreign takeover. Here I would point out as an aside the contradiction in the Conservative Party's speaking points today. I am the critic for the Canadian Wheat Board, and the prairie members of the Conservative caucus were insistent that the Canadian Wheat Board had to be abolished because we could not have that kind of communism on the prairies in our grain marketing. That is the word they used. Behind closed doors, the Conservative prairie members referred to the Canadian Wheat Board as communism. A bunch of prairie farmers, banding together to act in their own best interests to get the best price for their grain was communism and it had to stop.
Yet the conservatives see no problem with selling our birthright in the Canadian oil sands to true communists, in fact communists with a terrible human rights record. If the Conservatives cannot see a ridiculous contradictions in their own talking points on that, then they are even thicker than I thought.
Petro-Canada had to be sold because it smacked of socialism. Even if we had the temerity to keep some control over a tiny portion of the oil industry so that we would at least know if we are being gouged by big oil, no, that had to go because it smacked of socialism if the nation state of Canada actually owned a piece of the oil industry below its feet.
Yet the Conservatives speakers I have heard today apparently see no problem with China Inc. gobbling up our children's birthright in the oil sands. I am against the deal, but I am only one voice. We should be consulting all Canadians. There should be a referendum on this kind of question.
The Conservatives laugh but they will not be laughing for long. They are talking about putting limits on foreign ownership by state owned enterprises. What is to stop 20% being owned by CNOOC and another 20% being owned by one of China Inc.'s other hundreds and hundreds of subsidiaries? These are not democratically elected boards of directors. They are appointed by dictatorships to act in their own best interests. I wish them good luck in trying to instill the best interests of Canadians into the board of directors of a Communist Chinese company. I do not know how they can live with the glaring contradiction in their own arguments and talking points. It drives me crazy.
We have lost virtually all of our manufacturing jobs to China. I used to have 43 garment manufacturers in my riding. I have only been an MP for 15 years. When I was first elected, there were 43 garment manufacturers in my riding and some of them had 1,500 employees. It was a huge burgeoning industry. Do members know how many there are left? There are three and only one of them actually produces any clothing. The rest of the work is now in China.
We comforted ourselves by saying that our kids will not want to work in those industries anyway, so we will let the Chinese have the garment industry. We have natural resources that we will develop and our high tech industry. However, guess what? China also learned high tech pretty good and has those jobs too. What does that leave us with? It leave us with the oil patch, our natural resources. Now we are going to let the nation state of China come in and buy up our natural resources as well? I call it economic treason. I accuse anybody who considers allowing this deal of economic treason.