The House resumed consideration of the motion.
Mr. Speaker, I will conclude my remarks by quoting some comments of a noted Canadian journalist. As sensitive as I am to the issue of plagiarism, I want to make sure that we give due credit to columnist Diane Francis and the Huffington Post
. I do not quote Diane Francis often, as we disagree on some issues. However, in this case I believe she nails it.
Dealing with the Nexen deal and the CNOOC takeover, she states:
Canadians should be upset and insulted that China's biggest grab for control of a major resource company anywhere in the world is the $15-billion Nexen deal. Clearly, China is testing whether this Boy Scout of a nation will roll over.
She goes on to state:
This is just one of many reasons why Canada must reject this takeover. Another is a warning by CSIS against foreign buyouts of strategic assets, and yet another is that polls show public opposition to the deal.
The third reason she cites is that polls clearly show public opposition to the deal.
Those are three simple reasons for the three minutes that I have left.
Frankly, the third is perhaps the most salient. Canadians have been asked about this deal and have said flatly that they do not want the government to proceed with the deal at this time.
All we are asking in this motion today by the NDP is that there be thorough public consultations. Let us get the best minds in the country, pro and con, for and against, to sit down and discuss whether or not foreign takeovers by state-owned entities such as CNOOC are in the best interests of Canadians. Is that really too much to ask?
In my remarks before question period, I pointed out that the government got rid of the Canadian Wheat Board because it was too much like communism, even though it was just a bunch of prairie farmers acting together in their own best interests. I have heard Conservative members behind closed doors say, “We're going to get rid of that communism, them commie pinkos on the Prairies and their Canadian Wheat Board”. Yet they seem perfectly willing to have a genuine communist dictatorship take over a big piece of our birthright in the Canadian oil patch, that is, our natural resources.
With the one minute I have left, I voice a cautionary note here. It is not just CNOOC. Diane Francis also points out there are hundreds of other corporate appendages of China Inc. on a global acquisition frenzy, with a trillion dollars, gobbling up natural resources and paying premium prices for them, and sometimes wildly extravagant prices because they know the true value of these natural resources in the coming decades and century.
This is our children's birthright. This is a Canadian natural resource. Sinopec, Chinmetals, PetroChina, the China Investment Corporation, and even the city of Tsingtao are currently shopping for oil companies in Calgary. We really have to reflect on whether or not we want these state-owned enterprises to be able to operate in the same way that foreign investors operate.
We are not anti-investment. We believe Canada is open for business, but Canada is not for sale, and we will not allow—
Mr. Speaker, I would first like to say that I will be sharing my time with the hon. member for . I wish to thank you for the opportunity to speak to the House today.
I will take this opportunity to describe how the Investment Canada Act works and how the makes decisions. First, the administration of the act is shared between two ministers and their respective departments. The is responsible for the review of investments involving cultural businesses. The Minister of Industry is responsible for the review of all other investments. The Minister of Industry is also responsible for all other aspects of the administration of the act, including initiating enforcement measures.
Today, I will be talking about investments for which my department, Industry Canada, is responsible.
When a foreign investor proposes to purchase a Canadian company, that investor must obey the law. If a proposed investment must be reviewed in terms of its net benefit under the act, the investor cannot close the deal without the approval of the minister responsible. The investor must provide certain information in its application. This includes a business plan for the Canadian company.
Foreign investments are reviewable if the assets of the Canadian company are equal to or greater than a threshold established in the act. The threshold for World Trade Organization member countries is adjusted each year by an amount equivalent to the change in the gross domestic product of the investor’s home country. In 2012, this threshold is $330 million. The threshold for cultural businesses and non-WTO countries remains at the levels established in 1985: $5 million for direct acquisitions and $50 for indirect acquisitions.
Under the act, the Minister of Industry has an initial period of 45 days to consider the proposed investment and decide whether it will have a net benefit. If necessary, the minister can extend this period by 30 days. In addition, the period can be extended if the minister and the investor agree.
Industry Canada only approves applications for review when it is convinced that the plans, undertakings and other information from the investor make it clear that the investment is likely to be of net benefit to Canada.
Let me be clear that in my role as minister of industry, I must make sure that an application is approved only when we are satisfied, based on the plans, undertakings and representations of the investor, that the investment is likely to be of net benefit to Canada.
To determine the possibility of a net benefit, the following factors, listed in section 20 of the act, must be taken into account. They are:
(a) the effect of the investment on the level and nature of economic activity in Canada, including, without limiting the generality of the foregoing, the effect on employment, on resource processing, on the utilization of parts, components and services produced in Canada and on exports from Canada;
(b) the degree and significance of participation by Canadians in the 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;
(c) the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada;
(d) the effect of the investment on competition within any industry or industries in Canada;
(e) the compatibility of the investment with national industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives enunciated by the government or legislature of any province likely to be significantly affected by the investment; and
(f) the contribution of the investment to Canada’s ability to compete in world markets.
As part of the review process, the Investment Review Division of Industry Canada consults with federal government departments with policy responsibility for the industrial sector involved, with the Competition Bureau and with all the provinces and territories in which the Canadian business has substantial activities or assets.
Anyone who wishes to express their opinion regarding a specific investment can do so during the review process. This is outlined in the document entitled: “Guidelines—Administrative Procedures”.
According to these guidelines, when unsolicited representations are received that may be contrary to a net benefit determination, the applicants are advised of the nature of these representations and given enough time to respond if they so wish. Once the parties consulted have been able to explain their point of view, discussions are held with the investor and the subject of binding commitments is addressed.
The Investment Review Division also conducts an independent analysis of the acquisition on the basis of the six factors pertaining to net benefits that are set out in section 20 of the act. In the course of this review, the minister responsible for enforcing the act establishes benchmarks on the basis of which the proposed transaction is examined.
For this purpose, the profile of the Canadian business which the investor intends to acquire is examined with due regard to the future prospects of this business if it were to remain independent and not acquired. This would include determining whether the business in question is healthy and has good prospects, or whether instead it has financial problems. This is an important point.
Also taken into consideration are the main strengths of the business, areas for improvement and any challenges it may face. In addition to this, other factors involved in the planned investment are considered, such as the fact that the investor is providing capital or expertise that would not otherwise be accessible to the Canadian business.
In 2011, the Investment Review Division received and dealt with 634 notices of investment. It approved a total of 15 applications for review.
Our government has also been proactive and has updated the act to reflect new conditions.
More specifically, our government introduced the following measures: in 2007, it implemented the “Guidelines – Investment by stated-owned enterprises”; in 2009, it amended the provisions on national security; it amended the act to raise thresholds so that reviews could focus on the transactions that would have the greatest impact on Canada’s economy; it introduced targeted amendments so that the minister would be in a better position to communicate information concerning the review process to the public, and lastly, it published an annual report on the administration of the act.
We need to remember that the context in which international investments occur is constantly changing. We therefore continually review the act to make sure it is up to date and effective.
With respect to the proposed investment, as I said previously, all the time required will be taken to ensure that there is a detailed and attentive review of CNOOC’s plans to acquire Nexen.
The transaction will be approved only if it is likely to be of net benefit to Canada.
With reference to the proposed investment, as stated previously, the necessary time will be taken to conduct a thorough and careful review of CNOOC's proposed acquisition of Nexen. It will not be approved unless there is satisfaction that it is likely to be a net benefit for Canada.
I am happy to have had the opportunity to speak to the House and my colleagues in order to provide details about the Investment Canada Act.
Mr. Speaker, I am thankful for the opportunity to speak to the motion before the House.
I will begin by stating that foreign investment plays an important role in the Canadian economy. Investors bring with them knowledge, capabilities and technology which can increase the productivity, efficiency and competitiveness of Canadian firms. These investments provide capital to Canadian-based companies to expand and create jobs for Canadians.
In recognizing the importance of investment, Canada has a broad framework in place to promote trade and investment, while at the same time ensuring that Canadian interests are protected.
Investment flows both ways in and out of Canada. In fact, in the past several years, Canadian companies have invested more abroad than foreign companies have invested in Canada. According to Statistics Canada, the stock of foreign investments into Canada has reached $600.5 billion in 2011, while Canadian companies are even greater investors abroad at $684.5 billion.
The Investment Canada Act provides a mechanism to carefully review significant acquisitions of Canadian enterprises by non-Canadian companies to determine if they are likely to be of net benefit to Canada. It also provides a process to review investments which could pose a threat to national security.
The motion before us asks the government to:
—not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations...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...must respect its 2010 promise to clarify in legislation the concept of "net benefit" within the Investment Canada Act.
CNOOC has filed an application for review of its proposed acquisition of Nexen Inc. under the Investment Canada Act and the is accordingly conducting that review of the proposed investment.
The review process under the act is rigorous. As part of the process, the must consider the views of various stakeholders and consult affected provinces or territories as well as other government departments.
In addition, there is room for Canadians to express their views. Any person or group that has a view on a specific investment proposal may provide those view to the minister during the review process. I might add, many of the people in my riding have expressed their views to me as their representative. We are the vehicle to express their views in this debate.
Where an investment is subject to review under the act, the minister must approve an investor's application for review before an investor can implement an acquisition. He will only approve applications where he is satisfied, based on the plans, undertakings and other representations of the investor, that the investment is likely to be of net benefit to Canada.
Also, as the investor is a state-owned enterprise, the guideline for investments by state-owned enterprises net benefit assessment, published under the Investment Canada Act, apply to this proposed investment. The guidelines clarify in the review under the ICA, as part of the assessment of the factors listed in section 20 of the act, that the minister will examine: the corporate governance and reporting structure of the non-Canadian proposal; how, and to the extent to which, the non-Canadian is owned or controlled by a state; and whether the Canadian business to be acquired will continue to have the ability to operate on a commercial basis.
As indicated in the guidelines, examples of undertakings that address these issues include: the appointment of Canadians as independent directors on the board; the employment of Canadians in senior management positions; the incorporation of business in Canada; and a Canadian stock exchange listing.
I will now take a moment to explain the confidentiality provisions of the act.
These provisions do not permit comments about specific investments to be made without the investor's prior agreement. Divulging confidential information outside the narrow exceptions of the act is a criminal infraction. 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 strong protections for the information obtained from an investor or Canadian business. This protection is necessary to ensure that investors provide all the information necessary to conduct a thorough review while preventing the harm to the investor and the Canadian business that could come from disclosure.
That said, this government welcomes Canadians' interests in this process and will endeavour to provide information whenever possible.
All approved investments are subject to monitoring to determine the extent to which the plans and undertakings provided by the investor have been implemented. An evaluation of the implementation of the plans and undertakings provided by the investor is ordinarily performed 18 months after the implementation of the investment. Monitoring may be more frequent. Additional evaluations may be performed based upon the performance of the investor and the duration of the undertakings.
The act provides for remedies where the minister is not satisfied that the investor is meeting its obligations under the act.
The decision to take enforcement measures under the act is based upon the overall performance of the investor in implementing its plans and undertakings. Decisions to take enforcement measures are made on a case-by-case basis based upon the specific circumstances of the transaction. The process for enforcing plans and undertakings provided by an investor during the review process includes seeking an order from a superior court to remedy any gap in implementation of plans or undertakings.
Our government has also been proactive in updating the act to adapt to the changing environment. In particular, our government introduced the state owned enterprise guidelines in 2007; introduced a national security amendment in 2009; amended the act to raise the review threshold, focusing reviews on the transactions that are most significant to the Canadian economy; introduced targeted changes to provide the minister with a greater ability to publicly communicate information on the review process; and published an annual report on the administration of the act.
The climate for international investment is constantly evolving. We will continuously examine the act to ensure it is up to date and effective.
Our targeted improvements to the Investment Canada Act provide greater transparency to the public, more flexibility in enforcement and an alternative to costly and time-consuming litigation.
Mr. Speaker, I would like to inform you that I am going to share my time with the member for .
Canadian resources are above all for the benefit of Canadians. When we consider a case like the acquisition of Nexen by CNOOC, the Conservatives’ penchant for secrecy and control without accountability shows in everything they do. Canadians are losing confidence in our investments because we are not in a position to determine whether an acquisition is in their best interests.
The opposition motion debated in the House today is not necessarily asking for the acquisition of Nexen by CNOOC to be rejected without an appraisal of the situation. It is basically asking that the process leading to a decision be sound. This debate is about transparency and accountability.
It is essential to hold consultations and to clarify the net benefit review process to ensure that the interests of Canadians are truly protected. When the net benefit criteria are not clear, the decision becomes arbitrary. There is neither transparency nor accountability. Even investors are not reassured by this arbitrary process. Until the act is clarified, it is impossible to weigh Canada’s interest against foreign interests.
In 2010, even the Conservatives agreed that the “net benefit” concept should be defined more clearly in the act. The then minister of industry had promised to do so. As we in the House know, the Conservatives do not come through on their promises of transparency. This is not surprising to us. Without this essential clarification, the net benefit is at the mercy of the minister’s own definition. I sincerely believe that this definition is not one that Canadians would accept.
In 2007, the guidelines added by the Conservatives to the act specified among other things that the targeted corporations should pay attention to what senior officials have to say, appoint Canadians to the board of directors and list the corporation’s shares on a Canadian stock exchange. I am not about to disagree that these factors should be taken into account, but the true concerns of Canadians relate more to employment and the environment. As it happens, environmental concerns are missing from the process, and employment is given short shrift.
In the specific case of Nexen, CNOOC has not promised to keep value-added jobs in Canada or to create new jobs. Nor has it promised anything about improving environmental performance.
With regard to the environment, it is not just the lack of promises that is disturbing. The different trade agreements that the Conservatives negotiated without paying attention to the details could prevent us from effectively protecting the environment because they would make the Canadian government open to legal action by foreign companies if it legislates in a responsible manner.
Furthermore, there is a significant risk for our jobs, especially in the processing and refining sectors. Are the Chinese not interested in extracting oil here and refining it in China? I believe that would be in their best interest. In that case, high-quality jobs in Canada's processing sector will be lost. China's refining capacity is at 85%. There are no guarantees that China will not use Canadian crude for the remaining 15%. That is hardly a net benefit.
While the Conservatives' priority is to find out who will be on the board of directors, jobs and the environment are the priorities of Canadians and the NDP. We must also not forget national security, which has been discussed a great deal recently, and security of intellectual property.
The Canadian Security Intelligence Service, CSIS, issued a warning in its most recent report:
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.
The People's Republic of China has a 64.45% stake in CNOOC and has a ministry of political and ideological affairs. In addition, China also has a party committee in the company. Better yet, the company president considers deepwater oil rigs to be its mobile national territory and a strategic weapon. All this seems to be consistent with the warnings that the Conservatives seem to be ignoring.
We must also consider that this acquisition is probably not an isolated event. China is making massive investments in natural resources abroad, which could have disastrous consequences.
For example, take China's investments in and purchases of agricultural land in Africa. The strategy is obvious: guarantee food security for China, which in turn weakens Africa's food security. It is vital that we prevent this type of phenomenon from taking place in Canada.
After making a few strategic purchases, China or any other foreign power could rapidly gain significant control of our natural resources. There is a definite risk that a precedent will be set. We are talking about the nationalization of our natural resources for the benefit of another nation. I believe this is a mistake.
The Conservatives will of course answer that investments in the economy are necessary, and on that we agree. Certainly, such investments help our economy. But while they want to have investments that are controlled outside Canada, I think the best way of promoting innovation and developing the Canadian economy is really to have Canadian investments.
In an article published in Canada Business entitled “Canadian business must invest more if Canada is to remain competitive”, journalist Hugh McKenna quoted a report prepared by Deloitte, “The Future of Productivity: Clear choices for a competitive Canada”. I took two points from that article that are being completely ignored by the Conservatives: first, the real problem with Canadian productivity is the lack of investment and capacity for expansion on the part of Canadian companies; second, the government should make the foreign investment review process more transparent.
Those positions reflect the concerns felt by Canadians. Unfortunately, the Conservatives do not seem to have the same concerns about real prosperity, jobs, the environment and the security of Canada.
They are even working against those principles by raising the threshold in the act for a transaction that is subject to the net benefit review. At present, the Investment Canada Act provides that transactions with a value of $330 million or over are to be reviewed by the Minister of Industry, but that threshold will shortly be raised to $1 billion or over. The government is clearly moving backwards when it comes to standing up for Canadian interests.
To conclude, I have to point out the perfect ironic illustration of how less than zealous the Conservatives are when it comes to standing up for Canadian interests. Although the Conservatives seem set on approving the Nexen purchase with no discussion, the acquisition of the agricultural corporation Viterra by Glencore, which the Conservatives had approved, is currently being subjected to careful scrutiny by China’s anti-monopoly agency. I find that interesting.
I repeat: as a general rule, in this debate, we should not be replacing one arbitrary approach with another.
The NDP is not calling for the deal to be simply rejected, but we want to be sure that thorough public consultations are held and transparent, accessible public hearings are organized on the issue of foreign ownership in the Canadian energy sector. We want to know what foreign governments are going to be doing in Canada, and obviously we want to clarify what the legislation says about the concept of “net benefit”.
I see my time is up. Thank you.
Mr. Speaker, I am pleased to rise in the House today to speak to the motion put forward by the NDP's natural resource critic, the member for . Specifically, the motion calls on the government to delay making a decision on the proposed Nexen takeover by Chinese state-owned firm CNOOC until such a time as full public consultations are conducted. It also calls on the government to initiate a broader consultation process on the issue of foreign ownership in the Canadian energy sector, with particular reference to the impact of state-owned enterprises. Finally, it calls on the government to respect its 2010 promise to clarify in legislation the concept of net benefit within the Investment Canada Act.
The clock is ticking, and the Conservative government stubbornly continues to study Nexen's takeover behind closed doors. Since July, New Democrats have repeatedly called for public hearings to study the ins and outs of this important transaction that would allow foreign interests to take over a portion of our oil sands, in a way that is transparent. But the and his inner circle have ignored our requests. We are now into the final stretch, and with this motion New Democrats will try once again to make the government listen to reason as well as the concerns of many citizens, experts and businesspeople.
We all know that Canada was built for trade and that foreign investment can play a positive role in building and strengthening our economy, if done right. Yet the Conservative track record on foreign investment demonstrates a lack of foresight, and the experience in my community of Sudbury is but one example of why the Investment Canada Act needs to be updated and, further, why full public consultations for major foreign takeovers are necessary to ensure Canada is taking the proper approach to foreign investment.
In the fall of 2010, this House unanimously backed an NDP motion calling for the modernization of the Investment Canada Act and specifically a clear definition of what constitutes a net benefit under the act. Further, the Minister of Industry at the time also made a commitment, both in the House and in various media outlets to bring “clarity” to the act in order to ensure that Canada's foreign investment procedures were clear for investors, for workers and for the Canadian public. Yet unsurprisingly, the Conservatives have reneged on this commitment to review and clarify the Investment Canada Act, leaving both investors and everyday Canadians in the dark.
It was my hope that this issue would have come before the industry committee, of which I am a member following the 31st general election. However, as yet, despite the government's commitment to re-examine the act, the committee has not had the opportunity to undertake a study into the deficiencies of the act. The public can take that as it may, as it has not been the New Democrats who have been stalling on this front.
One of the most troublesome aspects of the Investment Canada Act as it currently stands is the lack of a requirement for full public consultations for large foreign takeovers like the proposed Nexen deal. Put simply, without amendments to the Investment Canada Act, Canada's foreign investment regime will continue to lack transparency and accountability. That is why New Democrats are calling for transparent public hearings on the proposed takeover before any decision is taken on whether or not to approve this deal.
Like many Canadians, New Democrats have concerns about the risky hands-off approach of the government and its refusal to conduct an open and transparent review of this proposed takeover. The business sector, Canadian workers and communities need certainty when it comes to foreign takeovers, but the current review process lacks transparency and accountability. While the Conservatives have refused to hold public hearings on the CNOOC Nexen takeover, they have been busy meeting with well-connected lobbyists on the matter, including former advisers to the .
This speaks volumes about the approach taken by the government. Insiders continue to get intimate details of government plans while ordinary Canadians are left out in the cold. This is a story that has become all too common with the Conservative government. The fallout in Sudbury resulting from foreign takeovers of Inco by Vale and Falconbridge by Xstrata has made it clear to me that holding public consultations and ensuring the public disclosure of associated undertakings is necessary to ensure an open, transparent and accountable process for reviewing foreign takeover proposals, such as the one we have in front of us with Nexen.
Canadians deserve better. We need public hearings to provide clear answers to the serious questions raised by this deal and the various others coming down the pike.
A second major deficiency of this act as it stands and one that we had a firm commitment from the former Minister of Industry to correct is the highly subjective net benefit test. Specifically, the concept of net benefit is not clearly defined by the act, creating uncertainty for investors and for potentially affected communities. Therefore New Democrats are once again calling for long overdue changes to the act to clarify the criteria used to evaluate net benefit.
If it seems like New Democrats are yelling from the rooftops on this issue, it is because we have been the only party to consistently call for a cleanup of this act. Once again, the inherently problematic net benefit test is rearing its ugly head.
It is not just New Democrats clamouring for a cleanup of this section of the act, rather Canada's business leaders are also echoing this call. For instance, the president of Winnipeg-based steel fabricator Empire Industries Ltd. has described the current system as “highly subjective” and has stated that it is important to have clear ground rules.
However, because the PMO and the have continued to hide behind a cloak of secrecy in relation to this proposed takeover and have been sitting on their hands for the best part of two years in terms of bringing forward a more objective test than the net benefit, neither industry nor investors nor the Canadian public have any idea of what criteria this proposal must meet in order to be approved.
Unfortunately, as the representative for Sudbury, it is déjà vu all over again for me. Canadians need answers on their key questions and concerns to verify that this deal would be a net benefit to Canada. Unfortunately, the Conservatives have thus far only spit out repetitive talking points in place of the substantive information that Canadians are seeking.
Another instructive statement comes from Scott Hand, the CEO of Inco until it was acquired in 2006 by Vale, who has argued that the net benefit clause and specifically Canada's unwillingness to shield strategic industries despite other countries judicious exercise of this right, makes Canada a boy scout playing among other countries who play hard ball.
This speaks to the specific issue of allowing foreign state-owned enterprises to buy up what could only be described as a strategic resource. In 2006, when CNOOC attempted to purchase American-owned Unocal, a fulsome debate on the issue of both strategic resources and national security was allowed to take place. Ultimately, this bid was rejected by the U.S. government as allowing a foreign state-owned enterprise to take over a strategic industrial entity like Unocal was deemed to be against the national interest.
The notion of selling a strategic resource like Nexen to a foreign state-owned entity has also been strongly refuted by one of the people responsible for crafting the Investment Canada Act. Mr. Sinclair Stevens, an industry minister under the Mulroney government, who brought in the Investment Canada Act to replace the more stringent Foreign Investment Review Act, has stated:
While we didn’t put it in the act, the departmental view was very firm: you can’t tolerate state-owned firms taking over anything in any substantial way in Canada....
I know my time is coming to an end, but it is time to open up this issue for broader discussion. I am hopeful that the industry committee will have the opportunity to study the deficiencies in full public view and ensure the fulsome debate that Canadians expect and deserve.
Mr. Speaker, it is a privilege to be here this afternoon to address this extremely important opposition day motion put forward by the NDP.
It is an important motion for three reasons. First, it calls for public consultations on a specific deal, the Nexen-CNOOC deal, which is under negotiation. Second, it calls for public hearings into foreign ownership in the Canadian energy sector at large. Third, it calls on Canada and the government to clarify the net benefit test in the Investment Canada Act before a decision is made with respect to this specific transaction.
For the record, the Liberal Party will be supporting this motion, but let us just step back for a few minutes and look at how we got to where we are today.
This proposed acquisition has been in the works for a long time. It follows hard on the heels of the proposed potash deal, which raised so many similar concerns and issues. Both Nexen and CNOOC, as parties to this proposed deal, played by the existing rules, even though they knew that changes to the definition of net benefit under the Investment Canada Act were supposedly forthcoming.
In fact, the stood in his place with a number of front-line cabinet ministers two years ago and promised that a major review of what constituted a net benefit to Canada would be undertaken. It was never done, even in the full knowledge that this and other deals were in full negotiation.
My colleague, the member for , our Liberal industry critic, brought a motion to the industry committee almost nine months ago. Let me read it. It is simple and it is direct. He proposed that the Standing Committee on Industry, Science and Technology undertake a study of the Investment Canada Act and present a report to the House.
It turns out the committee rightly decided to pursue the study, but we do not really know what was said. Once again, the deliberations were held in camera, behind closed doors. This is a neat little trick pulled by the Conservatives across all committees to censor access to information on a very regular basis.
Since then, nothing. Did the government recall the committee over the summer months to take a crack at the study? No. Did it produce a comparative study of what other countries who have tackled these issues have done? No. Did it identify and make public the salient questions to be addressed beyond the six factors to be taken into account under section 20 of the Investment Canada Act? Absolutely not; so here we are.
Shareholders and the boards of directors of both companies involved have approved the deal. They believe their interests are best served. That is fine. That is as it should be in the free market. However, what we are talking about is Canadian interests, not shareholder interests exclusively.
It is at once the irresponsibility and the incompetence of the Conservative regime that has led us to this point. It is irresponsible and incompetent in the fact that the net benefit test has not been dealt with. It is irresponsible and incompetent in the fact that it has been dispatching the and ministers all over the world to drum up investments from countries such as China in full knowledge that proposed deals like the Nexen one, or any of the several other deals now being worked on in the oil patch, would be highly controversial. It is irresponsible and incompetent in its refusal to answer the questions that Liberals have raised for weeks, either because the Conservatives are afraid to admit they do not have the answers or they are afraid to tell Canadians the truth.
The truth is that Canadians do not have confidence that our interests are being addressed and protected. They have serious concerns and are eager to learn more about this specific deal, its ramifications and its long-term effects on one of our most important natural resource sectors.
The Conservative government promised to revisit the concept of “net benefit to Canada” in the context of foreign takeovers after the rejection of the offer for PotashCorp in October 2010. Because of its inaction, Canada is now facing a wave of foreign takeovers and the rules have not been clarified.
We understand that it is necessary for the government to retain some flexibility to exercise its discretion, since no two deals are identical, but we also believe that foreign takeovers must be done transparently and that Canadians must be informed about the guarantees involved and the reasons a transaction is deemed a net benefit to Canadians.
Let us be very clear: the Liberals are in favour of foreign investment but, since 2006—and especially since 2010—we have been calling for more transparency in foreign takeovers.
The government is not able to provide this transparency and not able to dispel the impression that the process is based on purely political considerations. For the good of our economy and future foreign investments, the rules must be clear.
As I said, the legislation must provide some degree of flexibility because no two deals are the same. Very important questions loom large and need to be answered in order for Canadians to understand what guarantees might be given and why a transaction is deemed of net benefit to Canada.
First, because we have no national energy strategy in this country, as called for by Alberta's premier and by our party for over six years, where does this and other transactions fit into our energy future? Where does it fit into our climate future?
There is no doubt that case after case with respect to our approach to energy will continue to surface, from Keystone to the northern gateway pipeline, another Conservative fiasco according to Jim Prentice, and now this Nexen deal. The Conservatives are lurching from crisis to crisis instead of defining a national energy strategy that includes changing the Investment Canada Act.
I will take a moment to answer the 's question when he responded to Premier Redford by saying that when it came to a national energy strategy he had “no idea what she was talking about”. I will enlighten the Prime Minister and let him know what we are talking about.
This is about building on the early and tentative work by provincial and federal ministers in full respect of provincial jurisdiction. It would encompass the following key elements: regulatory reform; energy efficiency; energy information; markets; international trade; smart grid technology; reliability of our electricity system; building codes; building standards; and transportation efficiency.
Furthermore, we should be conducting a full and transparent analysis of federal and provincial programs and fiscal incentives and disincentives applicable specifically to the energy sector in all of its forms: fossil fuels, wind, solar, geothermal, biofuels and nuclear, with a view to facilitating Canada's transition to a low carbon future. That is what the race is all about in the global marketplace.
However, more questions need to be raised. In the energy sector, what should the maximum ownership limits be set at, 49% or no limits? If a company commits to keeping its head office in Canada, what if it does not? Similarly, CNOOC is committing to keep all 3,000 Nexen jobs and its current management team. What if it does not? How are these commitments enforceable? When shall we demand that Canadians be on the board of directors and how many? What about Canadians on the boards of the foreign companies that are targeting Canadian companies?
When we hear about the national security interests raised recently by CSIS, when do these trump a potential deal? What exactly are national security interests? Are they related to information technology? Are they related to trade secrets? Are they related to intellectual property and patents? These things need to be better defined.
How do we treat state owned enterprises versus privately held or publicly traded companies? Should we be factoring in human rights considerations in the country from whence the acquiring company is coming?
What if Canadians have invested in a Canadian enterprise through government support? This might be from direct financial support in the form of programming assistance or it might be fiscal assistance in, for example, the writing off of assets over a shorter period of time but that is an investment made by the Canadian taxpayer in a Canadian company. However, if a company has been supported by Canadian taxpayers in one of these two forms, how should we see that investment in terms of the Canadian people? Should the Canadian taxpayers be indemnified? Should we be asking that Canadian taxpayers get some of their money back?
Another question that this transaction raises, which ought to have been addressed in committee months if not years ago by the government working with all parties, is whether foreign ownership limits by companies or sectors be brought in.
Some estimates show that today in Canada two-thirds of oil sands production is already owned by foreign companies based on shareholders. Should that be a factor? Should that be allowed to continue? Is two-thirds too high, just right or too low? None of this has been subjected to what I would call the light of evidence and analysis in a good working place like, for example, the industry committee.
Another important question that Canadians are asking about this transaction is whether can Canadians invest in the country where the buyer comes from? If not, what should we be looking to ask for? What should we be looking to leverage from that country? For example, some have said in this case that Canada ought to be demanding better access to the financial services sector so that Canadian banks, for example, can expand their operations in what is clearly a huge market.
I have another question. Will there be full compliance with Canadian labour and environmental laws? What conditions should be met with respect to enhancing community and social commitments?
It is clear that the issue of enforceability weaves its way through each and every one of those questions. Those questions are fundamental to our jobs, innovation, technologies, patents and intellectual property. They are fundamental to the deployment of Canadian capital, to growing and maintaining our expertise in our trades, in our management and, yes, even in our ownership. Those questions are also fundamental to whether Canada's companies will compete in global markets. However, all those questions have not seen the light of day despite the promise made by the government.
Now we find ourselves in a situation where Canada is being squeezed. Actually, the and his ministers are being squeezed because they have gone all over the world telling people that we are open for business. They have said, “come one, come all, everything is for sale at the highest price”. However, we now face a situation where it is going into the secrecy of cabinet, where the net benefit test is not working as it is presently construed under the act, and we are in a situation now where Canada is vulnerable.
I would suggest that all parties come together in the industry committee, support my colleague's motion for a major study on this question and come back with enlightened information for all parliamentarians to learn from so that we can set the right net benefit test for Canadians going forward.
Mr. Speaker, I will share my time with the member for .
I am quite pleased to be standing here today to talk about this. I would like to commend the member for for his role in the natural resources committee when it comes to foreign takeovers or trade deals.
I would also like to thank and congratulate the member for , our industry critic, on the wonderful work she is doing on behalf of her constituents.
I worked in the mines for 34 years and in my last few years the company that I worked for, Inco at the time, was bought out by a foreign company from Brazil. When foreign companies purchase Canadian companies, they not only export our natural resources but we import an attitude. There is an attitude the comes with these foreign companies. It is an attitude that is not just for the Canadian workers and for the communities. I will get to that later, but I wanted to bring it up right now.
As we know, the mineral industry is a boom and bust cycle. It is good for 10 years, then it is down, then it is good. Miners get laid off, miners get hired, communities boom and then there is a downfall.
Last night I went to a mining safety forum. The reason I was there was because two miners in Sudbury were killed, Jordan Fram and Jason Chenier. They were killed by what we call in the mining industry “a run of muck”. For those who do not understand what a run of muck is, it is like a mud slide or an avalanche. It is when water gets into the muck and lets go. It is not stoppable.
I went there last night to hear the speakers. Among the speakers were family members. We want an inquiry into these deaths. That is why I talked about importing an attitude a while ago. Everyone in that mine, including management, knew there was a problem. They knew because they had been sent emails. The place had been barricaded. The barricades were taken down. The member who put up the barricades and sent these emails was one of the miners who was killed. That is very unfortunate.
I want to go back to the attitude. After that forum I received an email from Tim. I want to read it so everyone will understand why I am talking about attitude. He says:
Hello Claude thank you for being part of this much needed inquiry. To me it's insane that there were no charges for what happened at Stobie. Yet a man gets fired for getting hit by a loose at Coleman.
A loose is a fall of rock. He goes on to say:
Try to understand he gets fired for not following procedure yet Stobie management disregarded one of the most important procedures in the underground setting. I was recently fired from Vale for putting in a work refusal.
For those who do not know what a work refusal is, it is when a miner finds a situation that is unsafe. The miner can put in a work refusal because he thinks something is unsafe. This guy was fired because of that.
He further states:
I will now have to go to arbitration which will take a year or two. I can't believe the fear the men and women are working in. It is one thing to talk about at the meeting but to live it every day is very sad and frustrating I was working in disbelief every day. I will give you one example but there are many. One of my fellow miners broke his ribs at work and did not report it because of the fear of discipline.
That is why I was talking about attitude. We give these companies the right to invest in Canada, but they bring with them an attitude that is un-Canadian.
I want to quote a good friend of mine, the international president of the United Steelworkers, Leo Gerard, a former Sudbury native, on the value of good-paying jobs. He states:
Virtually 90% of wages and benefits earned by our members in the Vale Inco mines, plants and smelter have been spent in Greater Sudbury. The $190 million paid out to workers in nickel bonus, which over the years equates to slightly more 1% of company profits, has found its way into every nook and cranny of Sudbury and area businesses, services and charities. Home renovations and construction, autos and trucks, boats and ATVs, department and grocery stores, men's, ladies' and children's wear stores, restaurants and theatres, corner stores and bakeries, yard sales and bingo halls, all businesses and many charities shared in the wealth and prosperity of unions' collective bargaining.
This is something that foreign companies do not understand. They try to import, along with their attitude, wages and labour practices, standards from other countries that are well below the Canadian standard. The Conservative government also does not understand economics 101, that good-paying union jobs in a town feed and grow our local and national economies.
Some takeovers are good, some are bad, some are ugly. I have a list of the good things, but it is short.
In Sudbury, these companies have donated to charity and invested significantly in clean air technologies. We all know that in order to grow, Canada needs foreign investment, there is no disputing that, and we know that Canada was built on trade and foreign investment. Foreign investment can play a positive role in building our country as long as it is done right.
Now let me speak about the bad and the ugly. We lose when we sacrifice control. I will not be able to get through my whole speech, so I will jump to the last page.
The bottom line on foreign takeovers has to be Canada, not another country. The bottom line has to be our workers, communities and local economies, not a foreign corporation taking as many resources out of the ground or our water in as fast a time as possible. The bottom line has to be a Government of Canada that represents Canada and Canadians and does not only shrug about globalization and the new economy. The bottom line has to be accountability, transparency and everyone knowing the promises made to win government approval, because promises made must be promises kept.