Madam Speaker, it is great to take the floor in the most honourable House to speak to a very important topic, Bill , the Investment Canada Act modernization.
Before I get into my formal remarks, perhaps it is a coincidence, although I do not think so, that this morning the OECD released its foreign direct investment numbers, and Bill deals with foreign entities investing in Canada, Canadians and our communities. Canada came third in the OECD ranking for the first half of 2023. First is the United States, then Brazil, ourselves and Mexico. I think that speaks not only to the confidence of foreign entities, companies and corporations investing in Canada, creating jobs, wealth and great futures for Canadians, but also to what I would say is the idea that confident governments invest in their people and their communities. That is something we, as a government, have done since 2015 with respect to the Canada child benefit, the Canada workers benefit, the implementation of an early learning and national day care plan, the support for students by eliminating interest on student debt, and the two middle-income tax cuts: the first in 2015 from 22% to 20.5%, with roughly $3 billion to $4 billion a year, depending on tax filings, in savings for Canadians, and raising the basic personal expenditure amount to $15,000, which in the fiscal year 2024-25 will deliver over $6 billion in savings for Canadians from coast to coast to coast. Confident governments invest in Canadians and Canadian communities.
I am grateful to hon. members, my esteemed colleagues, for giving me the opportunity to speak to Bill , an act to amend the Investment Canada Act.
So far, the House of Commons has voted unanimously in favour of these objectives. The bill has been thoroughly studied by the members of the Standing Committee on Industry and Technology. We encourage the House to send this bill to the Senate for consideration. Everyone already knows that this legislation plays an important role in our economy and helps make Canada a destination of choice for foreign investment.
Foreign investment in Canada is booming. We have seen it in the auto sector, the mining sector, the food processing sector, the agriculture sector and so many sectors across this country, because Canada is a destination of choice for foreign investment. It creates jobs. It creates futures.
The act helps create business-friendly conditions based on a stable and clear set of regulations.
We need a stable and clear system in place to attract foreign investment, and Bill would do exactly that.
The act encourages economic growth and employment. It provides for intervention only if an investment is potentially harmful to Canada's national security, but it also permits quick action and judgments as circumstances warrant. That is what we intend to accomplish through the amendments made by Bill C‑34.
The time has clearly come to modernize the Investment Canada Act and bring it in line with the times. Our industries are still some of the most dynamic in the world. However, Canada is confronting unprecedented geostrategic and national security challenges.
Indeed, Canada remains a destination of choice for foreign investment. It continues to grow and to create good middle-class jobs from coast to coast to coast. This investment helps businesses prosper and grow, creates good-paying jobs and ensures strong economic growth that benefits all Canadians. Canada has a long-standing reputation for welcoming foreign investment and a strong framework to promote trade while advancing Canadian interests. In fact, Canada has one of the earliest and most robust screening processes for foreign direct investments. The Investment Canada Act, the ICA, was enacted 38 years ago, in 1985. The act allowed the government to review significant foreign investments to ensure that these benefits exist. It was updated in 2009 to include a framework for a national security review of foreign direct investments.
The world in which Canada now operates is increasingly characterized by the complexity of linkages between economic competition and the geostrategic clashes. We see it on a daily basis. Globalization has brought new threats to Canada's national and economic security, but of course many benefits also. Canada must have the tools and resources to protect its assets from economic threats to national security when those are deemed so. The Investment Canada Act must, therefore, also continually adapt to these considerations. The complexity of these dynamics can be seen in the increased volume of activity under the act in recent years. Indeed, there have been more national security reviews since 2020 than in the entire previous decade. The review process is also increasingly complex as international transactions and ownership structures are increasingly becoming more complicated and, in some locations, more opaque.
The proposed modernization of the Investment Canada Act is designed to make the review process more efficient and transparent. Bill sets out a series of amendments to improve the national security review process of foreign investments and to modernize the Investment Canada Act. Collectively, these amendments would be the most significant legislative update of the act since 2019. These amendments also represent one of the multiple steps the government has taken to ensure that we can defend our economic interests, contribute to global supply chain resiliency and protect our national security. This, in turn, would help us to attract stronger partnerships with our allies to foster economic growth. A stronger foreign investment regime attracts good, beneficial investments into Canada, ones that would create high-quality jobs and opportunities for all Canadians. We have seen this with the $7-billion investment by Volkswagen and the multi-billion dollar investment by Stellantis. We see it with Honda and Toyota, in Alliston and Cambridge, where they continue to invest hundreds of millions of dollars, and billions of dollars initially, in creating quality good-paying jobs for Canadians here in the province of Ontario, with a supply chain that stretches from coast to coast.
Defending our economic interests and protecting our national security interests are of critical importance, especially in the current climate of rapidly shifting geopolitical threats. This issue is a non-partisan one. During the six sitting days that Bill was debated, the House has repeatedly stressed the need to modern the ICA to achieve those objectives. The House ultimately decided, in a unanimous vote, to refer the bill for study, because we all recognized how important it was to get these amendments right so we can protect national security while ensuring that we are not chilling useful, good investment.
Canada's foreign investment regime must adapt to the speed of innovation, which we know moves very quickly these days. In recent years, intangible assets in the knowledge economy, like intellectual property and data, have grown in importance in defining Canada's economic strengths and, at the same time, pose new challenges in terms of how these are to be managed in order to ensure that the benefits occur to Canada and Canadians. The government recognizes the value of the intangible economy, its growth and the relevant opportunities for all Canadians, particularly in artificial intelligence and intellectual property. These new innovations are driving new ways of doing business, with huge opportunities for Canadians. The government will support this growth as it helps drive Canada's economy and supports highly skilled, good-paying jobs.
It is great to see the city of Montreal become a cluster for artificial intelligence, with a number of companies investing in that city. It is great to see the Kitchener-Waterloo corridor here in Ontario continue to be the leader in the tech sector. It is great to see the city of Toronto continue to see the investments from domestic and foreign firms in fintech, and so many other types of businesses in this knowledge economy, but to do so—
Madam Speaker, I sit on the industry committee with the hon. member, and I appreciate his intervention. We will always talk about the Investment Canada Act and how foreign companies are investing into Canada and creating good-paying, middle-class jobs for Canadians from coast to coast to coast. That is what I am doing in my speech this morning.
Tools such as the Investment Canada Act must also be modernized to offer additional protections in light of changing geopolitical and technological advancements and to prevent hostile actors from exploiting Canada's expertise and capacity for innovation. We must all be aware of geopolitical risks, and that they and instability are now fixtures in our operating environment, especially for businesses. Hostile state and non-state actors pursue deliberate strategies to acquire goods, technologies and intellectual property. They do so in ways that are fundamentally incompatible with Canada's interests and principles. We also know that foreign investments can be used as a conduit for foreign influence activities that seek to weaken our norms, values and institutions.
Members will recall that the Investment Canada Act played an important role in Canada's response to the Russian invasion of Ukraine. As early as March 2022, we issued a policy statement saying that any investment, controls or influence by the Russian State will also support a determination by the minister that there are reasonable grounds to believe that such an investment could be injurious to Canada's national security, regardless of its value. The statement sends a clear message about our commitment to protecting Canada's economic security from unwanted investment. Moreover, Canada's Indo-Pacific strategy is clear that the region will play a critical role in Canada's future over the next half-century. The significant opportunities for economic growth in the region are also accompanied by challenges related to the objectives of certain world powers that do not share our democratic and liberal principles.
We must respond to this reality in a number of ways, including in the way foreign investment is assessed and examined. In short, the Investment Canada Act plays a key role in protecting Canada's economic interests from hostile foreign actors. It is broad in scope and allows Canada to respond to changing threats that may arise from foreign investment, while protecting Canada's openness to beneficial international investment.
Again, I would like to say that this morning, the OECD stated its numbers for foreign direct investment in Canada, which OSFI operates through the Investment Canada Act to a large degree. Canada, for the first half of this year, came in third place behind the United States and Brazil. That is all the OECD rankings of over 30 countries. We are on the right path of continuing to grow the economy, attracting foreign investment from all over the world, along with our domestic companies investing. The act is broad in scope and allows Canada to respond to changing threats that may arise from foreign investment, while protecting Canada's openness to beneficial international investment.
The package of amendments proposed in this bill is designed to assure businesses and investors that Canada has a clear, predictable and stable regulatory regime. The nexus between technology and national security is clear and is here to stay. Rapid technological innovation has provided Canada with new opportunities for economic growth, but it has also given rise to new and difficult policy challenges.
More and more, Canada is being targeted by hostile actors. That threatens both our national security and our prosperity. Our government must therefore adapt our tools to more effectively defend us against current and future threats.
All around the world, foreign investments are now coming under much closer scrutiny from a national security standpoint, also considering various factors such as the impact of the COVID-19 pandemic, the repercussions of climate change on security, global supply chain disruptions and changing geopolitical considerations.
We are equipping ourselves today to face the threats of tomorrow. Canada will remain a destination of choice for foreign investment.
Now, more than ever, we need to make sure we are doing everything we can to foster an innovative, healthy and growing economy. The guidance and decisions issued over the past several years make clear that some transactions, particularly those by state-owned or state-influenced investors, may be motivated by non-commercial interests and imperatives that could harm Canada's national security.
I will repeat that these types of investments in sectors deemed sensitive currently face enhanced scrutiny under the Investment Canada Act. Our government believes that an effective review regime must be robust, transparent and flexible to adapt to a changing world and now is the time to make these changes. I believe the last changes were made in 2009. That is why we stand today to vote in favour of this bill, which represents the most significant amendments to the ICA since 2009.
We are making important moves now to review and modernize key aspects of the act while ensuring that the overreaching framework to support foreign investment to grow our economy remains strong, open and, I would add, flexible. Our record as a government makes it abundantly clear that where national security is concerned, we will not shy away from decisive action. Our assessment of risk keeps pace with evolving economic and geopolitical circumstances.
The ICA already gives us much of the authority we need to intercede and address national security risks that can arise from foreign investments. These amendments build on a strong foundation and will improve the mechanics around national security review of investment. Now is the time to act decisively so that we can make sure that Canada will continue to gain the economic benefits of investment while strengthening our ability to address threats to our country and ensure its future prosperity.
We recognize that Bill has undergone a rigorous, robust study spanning across 11 meetings. I applaud the members of the industry committee on this process. During those meetings, we heard from a variety of legal and subject-matter experts, who testified about the benefits that foreign direct investment has on Canadian businesses, the importance of protecting Canada's intellectual property and the need to ensure a regime that is capable of tackling the emerging national security challenges that Canada and our security partners are facing in the liberal democracies of the world.
We have engaged meaningfully with opposition members to discuss their perspectives and concerns and have worked collaboratively to bring new amendments that will further strengthen the bill. We have worked together to ensure that Canada's foreign investment regime continues to be the gold standard.
Bill will provide us with better tools to protect our national security. It will also help to bring Canada into greater alignment with our international partners and allies. My colleagues heard from witnesses at INDU about how important it is for Canada to have a regime comparable to its allies. Having a comparable regime helps to address common threats and maximize our collective effectiveness.
We all know that the amendments proposed in Bill will contribute to that important balance. We have to protect Canadians and Canadian businesses while ensuring that investors continue to see Canada as a destination of choice.
Yes, Canada is the first destination of choice for foreign investment.
We know that Canada and our allies share similar national and economic security concerns. Our allies are concerned with threat actors operating in multiple jurisdictions to secure a monopoly in critical access in technology. We see that with critical minerals. It is becoming increasingly more important to share information with allies to support national security assessments to prevent these threats from happening.
This new information-sharing authority strengthens co-operation between Canada and other like-minded countries to defend against an investor that may be active in several jurisdictions seeking the same technology, for example, and having motives ill toward. That said, Canada would not be obligated to share such information where there are confidentiality or other concerns.
I want to thank my esteemed colleagues for their attention today. I can assure members that our approach is pragmatic, principled and collaborative. It provides a solid framework to address evolving geopolitical threats while allowing Canada's review regime to be more aligned with our international allies and in the interests of Canadians. The collaborative efforts during the INDU committee ensure that we meet these goals, which is why I believe that this bill, as amended, should be adopted and referred to the Senate.
We are confident that with Bill , Canada will continue to encourage positive investment that will grow our economy and create good jobs in all ridings across Canada. I do not think there is a riding in Canada that does not have some form of foreign direct investment in it or that is not affected by foreign direct investment. It should always be done in a positive, long-term and sustainable manner without having to compromise on national security. We know that in today's world there are actors, foreign-state actors and non-state actors, who have ill intentions towards the liberal democracies of the world, including our blessed home here in Canada, and so we need the best of both worlds.
I hope all of us can work together to stand for Bill to get it to the Senate for further study and make this bill law to strengthen Canada's economic and national security.
It has been a pleasure to speak to this bill this morning. It was great to see the OECD comment with respect to Canada's reputation for foreign direct investment and coming into third place for the first half of the year. We have seen flows in foreign direct investment via countries across the world, with Canada being increasingly the destination of choice. There are the Volkswagen investment and the Stellantis investment, as well as Honda, Toyota and other entities. There are investments in Kingston, investments in Northvolt in Quebec and investments in B.C. that are happening. Across the board, we see foreign companies choosing Canada to invest their dollars for their shareholders to create wealth here in Canada. It is something that is great to see. We need to encourage it from all sides of the House.
I thank hon. members for their attention this morning. I look forward to hearing their questions and comments.
Madam Speaker, I am pleased to have an opportunity to speak to a bill that Conservatives believe is critical to the safety and security of Canadians.
At face value, Bill would amend the Investment Canada Act with the intent to bolster Canada’s foreign investment review process and increase penalties for certain instances of malpractice or contraventions of the act. Canadians could consider this bill an attempt by the Liberals to take threats posed by some cases of foreign investment seriously. However, we live in an increasingly volatile world and, as we have seen over these past few months, Canada is not immune to infiltration and manipulation from abroad.
In the past, Liberals have failed to thoroughly review transactions involving Chinese state-owned enterprises. This pattern is repeating itself through Bill . Namely, clause 15 would remove the obligation for any foreign investment to be subject to a mandatory consultation with cabinet.
On this side of the floor, we believe that Canada’s economic and security interests are paramount and this bill would not go far enough to protect them. That is why we put forward 14 very reasonable amendments at committee that would have intensified the review process of business acquisitions from foreign state-owned entities. Unfortunately, the Liberals and the NDP rejected all but four of them. They are nonetheless critical to improving the bill, so I will touch on each of them.
First, the government was prepared to pass a bill that would have given carte blanche access to investment from state-owned enterprises, no matter their relationship with Canada. There were no provisions that would require any investment by a state-owned enterprise to be subject to an automatic national security review when the government introduced this bill. Our amendment reduced the threshold to trigger a review from $512 million to zero dollars, meaning that all state-owned enterprise investments in Canada must undergo a national security review.
Second, Conservatives introduced an amendment which would ensure that the acquisition of any assets by a state-owned enterprise would be subject to review under the national security review process. It would guarantee that not only new business establishments, acquisitions and share purchases would be considered under the review but also that all assets are included in this process, which is another very good amendment to the bill.
Third, when the government introduced the bill, it failed to address concerns regarding companies that have previously been convicted of corruption charges. This makes no sense to me at all. The Conservative amendment now, fortunately, would require an automatic national security review to be conducted whenever a company with a past conviction is involved.
Finally, the government would have been happy to pass a bill that gives more authority and discretion to the minister, despite multiple blunders over the past eight years to take seriously the real threats posed by some foreign investments. The original bill would have left it to the minister to decide whether to trigger a national security review when the threshold was met. The Conservative amendment addresses this oversight and would make a review mandatory, rather than optional, when the $1.9-billion threshold is met.
I do not understand why the government would not have automatically included this in the bill. It concerns me that so many pieces of legislation from the government are giving more and more authority to individual ministers and not to those beyond them to make sure that, within cabinet and the oversight of the House, those things are truly transparent and that sober thought has been applied.
These amendments, the four that I mentioned, are crucial elements to strengthening this bill, but the Liberal-NDP government also denied Canadians further protections by rejecting some other key improvements that Conservatives really do feel should have been there.
Witnesses at the committee stressed that many Chinese enterprises operating internationally are indentured to requests from the CCP, even if they are privately owned. That almost seems like an oxymoron, does it not? Instead of taking sensitive transactions seriously, the Liberals and the NDP rejected our amendment to modify the definition of a state-owned enterprise to include companies headquartered in an authoritarian state, such as China.
In addition, the coalition chose to not provide exemptions to Five Eyes intelligence state-owned enterprises. Conservatives proposed an exemption to prevent an overly broad review process, which the Liberals and NDP rejected. Rather than focusing on real and serious threats to safety, the government would rather utilize its time and resources on scrutinizing our most trusted security partners.
This makes no sense. Clearly, the government has struggled to get things done in a timely manner, and this would have been an opportunity for it to be far more efficient and to also show an improving relationship with our Five Eyes partners and allies.
Lastly, rather than supporting our amendment to create a list of sectors considered strategic to national security, the Liberals and the NDP chose to leave the process up to regulation and put it at risk of becoming a political exercise, which Canadians are very concerned about when it comes to the government, where stakeholders may invoke national security concerns to protect their own economic interests. Clearly the government has failed over and over again to show it is truly operating in the best interests of Canadians.
I am glad to say that the amendments we were able to pass turned a minor process bill into a major shift in our nation’s approach to foreign takeovers of Canadian companies, but there is still more that could be done to improve it. As it currently written, the bill would give the Minister of Industry and the Minister of Public Safety near sole authority to bypass cabinet and approve projects coming into Canada.
Given past precedent, Conservatives have been sounding the alarm for years on why this would be a critical mistake. I am reminded of when the former minister neglected to conduct a full national security review of partially China-owned Hytera Communications’ purchase of B.C.’s Norsat International in 2017.
Twenty-one counts of espionage later, the United States Federal Communications Commission blacklisted Hytera in 2021 due to “an unacceptable risk to the national security of the United States”. However, it was not until 2022 that the then minister was left scrambling when the RCMP suspended its contract with Norsat for radio frequency equipment.
Shockingly, Public Services and Procurement Canada confirmed that security concerns were not taken into consideration during the bidding process for the equipment. This, of course, raises alarms. The Liberals also failed to consult Canada’s own Communications Security Establishment on the contract. Instead, the contract was merely awarded to the lowest bidder. This is also interesting because, quite often, it seems we are hearing of funds being shared by the government with organizations that simply do not do anything for Canadians with the money they are given.
Why was this allowed to happen? Why was a piece of technology meant to ensure secure communications within Canada’s national police force contracted out to a company accused of compromising national security around the world, as well as serving as a major supplier to China’s Ministry of Public Security?
Let us go back to 2020, when the government was prepared to award Nuctech with a $6.8-million deal to provide Canada’s embassies and consulates with X-ray equipment. Nuctech is, again, Chinese-based and founded by the son of a former secretary general of the CCP.
Deloitte Canada reviewed the offer and made a staggering recommendation to the government that it should only install security equipment in Canadian embassies if it originates from companies with national security clearances. Deloitte found that Nuctech’s hardware and software had advanced beyond the government’s existing security requirements to the point that its X-ray machines are capable of gathering information and accessing information networks. This raises huge alarm bells.
Global Affairs Canada did not review Nuctech for risks to national security during its procurement process, nor was the Canadian Centre for Cyber Security asked to conduct its own review. The government often says it will do better and can do better, but these things are happening over and over again. However, all this might have been too little too late, as the government has awarded four additional CBSA contracts to Nuctech since 2017. The government’s laissez-faire attitude to national security is simply beyond comprehension.
It does not end there. The government also cannot be trusted to safeguard the security of Canadians because it cannot even follow its own rules. In March of 2021, the updated guidelines for national security reviews for transactions involving state-owned enterprises and Canada’s critical minerals. Less than a year later, the same minister violated his own rules by expediting the takeover of the Canadian Neo Lithium Corporation by Chinese state-owned Zijin Mining. Once again, this was done without a national security review.
To make matters worse, the minister defended his decision by refusing to order them to divest from Neo Lithium while ordering three other Chinese companies to divest their ownership of three other critical minerals firms. It is confusing to me that the government would be so inconsistent. The hypocrisy is astounding. The government is once again picking winners and losers, and it is disconcerting who they are choosing to be winners. This time, national security is on the table. This cannot be allowed to continue.
We have seen a pattern of missteps by the government on how programs and projects are approved. Over the last eight years, there has been an unacceptable shift toward putting more power within the hands of ministers and outside advisory councils, with little to no accountability to this place. We certainly see that, and Canadians see it, too. There is less and less of a sense of responsibility in this place to Canadians. It is as though the government can simply go ahead and provide its ministers with legislation that gives them a carte blanche ability to do things, along with organizations and advisory councils that are outside of this place and do not have the proper oversight that the House of Commons, which reflects Canadians, certainly should have.
Often, we find that appointed advisory councils are established at the minister’s discretion prior to a bill even being signed into law. That just shows the incredible lack of respect of the Liberal government to due process in this place.
Other times, we see that the Liberals just cannot seem to pick a lane. With Bill , for instance, the Privacy Commissioner’s new powers to investigate contraventions of the Consumer Privacy Protection Act were diminished by a personal information and data tribunal. In this tribunal, only three of its six members were required to have experience in information and privacy law—
Madam Speaker, I thank my colleague for making note of that, which I appreciate.
In effect, the tribunal was equipped with power equivalent to a superior court of record, which could overrule any opinion of the Privacy Commissioner.
With today's bill, we see the government choosing the path of consolidated power in the hands of two ministers. The Conservative Party will continue to push for the deletion of clause 15 to ensure that cabinet decision-making is central to the investment review process, and not a ministerial power grab. Perhaps we are looking for assistance from the Senate on that.
Cabinet decision-making is at the heart of executive power of our system of government. We want to ensure that no single minister can make the same mistakes that we have seen repeated here time and again. Canadians are depending on us to push for these things to take place. They are sensing less and less of an influence and control, as the democratic individuals in our country vote for the people who sit in this place, including ministers. Therefore, it is really important that we continue to push the government to include the whole process, especially including as well that cabinet intervention.
The Liberals missed their chance to broaden the scope of Bill so that it would be applicable to changing geopolitical realities. It was a chance to ensure that Canadians and Canadian interests would have a dominant say in what would get built and what would get purchased in our country, how our resources would be managed and, above all, ensure they would be protected from complex and risky foreign interests.
Within my own province of Saskatchewan, there is a great deal of concern about the movement into our country, even in regard to purchasing of our land. Canadians are concerned about all of it, but if there is one thing Canadians are very concerned about, it is that our land belongs to Canadians and that our agricultural, industry and others are not taken over by foreign entities.
I asked the government earlier in the debate on this bill why Canadians should allow the minister to strip away any sense of accountability to cabinet or the House and empower himself in such a way. It is not in the best interests of Canadians. It is not in the best interests of any minister who is concerned about ensuring that he or she doing what is absolutely best for Canadians by limiting it to his or her own office and to the bureaucracy, rather than taking into account the voices across the House and within cabinet that represent Canadians.
When we form government, Canadians will breathe a sigh of relief on so many levels. They can rest assured that we will always take a thorough look at the long-term implications of foreign investment with respect to how they would affect our constituents, our economy in the long term and our reputation as a safe and reliable destination for international investment and for the investment of Canadians.
As I have a few minutes, serving on the Standing Committee on Veterans Affairs, I want to take advantage of this opportunity to speak on behalf of my communities and my constituents, indeed, all Canadians, and thank our veterans and our serving members as well our reservists, who are potentially facing deployment in the near future. Everyone who serves our country and is deployed or working within the system of National Defence deserves our greatest respect and support. I encourage everyone to please ensure they go out to the Remembrance Day services. I know many have taken place this week. Unfortunately, being here, I have not been able to participate at home. However, we need to ensure that we go out, in large numbers, and support our veterans.
Madam Speaker, I want to begin by drawing members' attention to an important event that is happening tomorrow.
Last week at the opening cocktail reception for the Abitibi-Témiscamingue international film festival, Steve Jolin, known as Anodajay to rap fans, was awarded the National Assembly medal for all of the work that he does to protect cultural vitality. Sandy Boutin from the Emerging Music Festival and Madeleine Perron from the Abitibi-Témiscamingue cultural council also received awards.
Why am I talking about this? The reason is that, following his first album Premier VII, featuring the hit song J'te l'ai jamais dit, Anodajay, an artist from a remote region who raps in French, put out a second album called Septentrion, containing a cover of the classic song La Bittt à Tibi. His version is called Le Beat à Ti-Bi. Tomorrow, November 10, his record label, Disques 7ième Ciel, will be celebrating its 20th anniversary at none other than the Bell Centre. This record label, which was established 20 years ago, promotes rap and is likely the definitive source for French rap music in North America, with artists such as Koriass, Samian, Manu Militari, Alaclair Ensemble, Souldia, and many others, including Fouki and Zach Zoya, who is originally from Rouyn-Noranda.
I should mention that Rouyn-Noranda will be at the Bell Centre tomorrow to celebrate the record company’s 20 years, and I also wanted to acknowledge the talent and fearlessness of Steve Jolin. This will be a great day for Quebec rap.
Today, I rise to speak to Bill and its critical importance for us Quebeckers. This bill amends the Investment Canada Act. The Bloc Québécois supports Bill C‑34, which strengthens the federal government's powers regarding oversight of investments that could compromise Canada's national security. More specifically, Bill C‑34 reinforces the minister's authority, giving him the power to impose conditions during national security reviews and to accept undertakings to mitigate national security risks.
These essential amendments are a logical evolution in an increasingly interconnected world where foreign investments play a vital role in the economic development of both Quebec and Canada. Consider the minerals needed to produce technological goods and electrify transportation. All mineral production becomes essential, even strategic, and therefore becomes a national security concern. Consider life sciences or quantum technology businesses or artificial intelligence start-ups. In these sectors, any investment by a foreign government or a foreign firm, from a country such as China, would automatically be subject to an initial review to prepare for an in-depth study. It would be subject to a national security review and systematically rejected unless the investor can convincingly demonstrate its real benefits, meaning its net benefit for Canada. This is an important point.
Bill C‑34 and the new critical mineral policy should put an end to the acquisition of resources by foreign-controlled firms that renders our industry completely dependent. This is something I vigorously defended at the Standing Committee on Industry and Technology. These are good mechanisms for Quebec and Canada. They protect our supply chains, our businesses and our sovereignty from ill-intentioned foreign investments. Each new review process essentially copies what is done in the United States, creating the harmonization that our businesses have also been calling for. By passing Bill C‑34, we are increasing the chances that the U.S. will continue to see us as a trusted partner, which is a condition for being a preferred supplier and, most importantly, for being integrated into their supply chains.
The U.S. has agreed to include Canada in its critical minerals supply chain, and, importantly, it has backed off on the most protectionist measures in the Inflation Reduction Act, the IRA, since Bill C‑34 now meets the requirements, the main one being to align our security policies with those of the United States. This is an essential prerequisite for including Canada in its industrial modernization strategy, in particular the development of the electrification industry. I have participated in not one, but two ministerial missions on these topics in Washington. I went there two years ago with the and last year with the , who was accompanied at the time by the . That shows how current these policy issues are and how vital they are for maintaining our competitive edge.
I do thank the government for its openness in committee. The government agreed to clarify the fact that purchasing a company's assets is the same as purchasing the company itself. If a company owns a mine and resources, and we purchase that company, we also get the mine and resources. This is very important, because it means that the transaction is subject to the act. This clarification was necessary, particularly in the case of intangible assets, such as intellectual property patents, where there was a gap in the previous version of the act. It is crucial that our laws protect our national interests, including intellectual property.
There may also be a flaw in the government's overall approach when it comes to protecting intellectual property. Does it go far enough? During our study of Bill in committee, several witnesses pointed out that the government could be doing more in that regard.
We took a more nuanced position on certain amendments. I supported the idea of considering intellectual property when reviewing transactions because it strengthens our national security and protects our strategic assets.
I want to take this opportunity to mention that other ideas emerged during the Standing Committee on Industry and Technology's work. I will start with a fundamental value: transparency. One of the most important changes that the Bloc Québécois and I argued vigorously in favour of had to do with transparency provisions. That was a major issue the witnesses raised and one that came up in the technical documents that were submitted.
I insisted on the need for greater transparency around national security in the decision-making mechanisms. That calls for more information from agencies responsible for decisions related to national security. That is a legitimate request that comes largely from the professionals who support the parties involved in this type of transaction, as well as from anyone who wants to understand how the decisions are made and which criteria are taken into account.
The minister's obligation to make their decisions public represents significant progress. This will improve the public's understanding and enable individuals, businesses and all stakeholders to better understand the process and the reasons for national security-related decisions.
We got a commitment from the minister to disclose certain types of information and require parties to a transaction to disclose the names of individuals benefiting from the new company resulting from the acquisition of or merger with the Quebec or Canadian company. We are firmly committed to acting in the best interest of the Quebec nation and to ensuring that the preservation of our national interests is in harmony with our democratic values and our pursuit of open and transparent governance.
Consider, for example, the acquisition of Rona by Lowe's. Rona was one of Quebec's success stories. It was acquired by Lowe's, but we will never know the conditions set by the federal minister. Nearly a decade later, we need to consider the consequences of that. Was it because of local procurement obligations, the need to maintain a head office in Montreal or the need to keep a certain number of employees in Quebec, both at the head office and in the companies? Were those aspects respected? We will probably never know, because the conditions were never made public. If they had been, the public would have been better informed and it would have been easier to hold the company to account regarding whether or not Quebec's interests were respected. Let me remind the House that we lost a head office at that time, and that must never happen again. Greater transparency is therefore an important gain.
Now let us talk about thresholds. The Bloc Québécois urges the government to go much further and to improve overall oversight of foreign investment, with a view to preserving our head offices, our economic leverage and our control over our resources, which Bill does not do.
I would therefore ask the House to consider a new bill providing for a more complete reform of the Investment Canada Act in this regard. We tried to do it in committee because no one had thought of it when Bill C‑34 was created. Unfortunately for us, the government restricted possible amendments to the sole issue of foreign investment as it relates to national security, which is important, yes, but limited. If we could have improved one thing, that would have been a good pick. However, we were unable to go as far as adding a new provision. While this is very unfortunate, I have high hopes that a new bill could be introduced.
I think there was even some degree of consensus around the table that the government missed an opportunity to review the thresholds to which mergers and acquisitions must be subject, particularly when it comes to guaranteeing that foreign investments will have a net benefit for Canada. That is an essential condition for everyone who is interested in foreign investment.
We support Bill , but we will continue to demand loud and clear that the government introduce a new bill to examine and review the other provisions of the Investment Canada Act.
The federal government's blind spot is its failure to protect our economic levers, a critical element that is often overshadowed by more immediate concerns. The data set out in the annual report from the department's investment division, which was tabled in Parliament in October, present an alarming reality that is getting worse as the years go by.
Of the 1,255 foreign investment projects totalling $87 billion that were submitted last year, only 24 of them would have been considered to have national security implications had this bill been in effect at the time. Everything we are talking about right now would have an impact on only about 2% of projects. That is far from nothing, but it is not enough either.
The rest, or 1,221 investments, remain subject to the old lax rules with less than 1% of them being subject to a thorough review to assess their true net economic benefit.
Each year, more than 97% of investments are not subject to a review. We have a right to question the oversight capacity for transactions.
This gap in the protection of our economic levers stems from the growing fragility of the Canada Investment Act, with an increasingly high review threshold, allowing the vast majority of foreign investments to avoid any substantial assessment of their impact on our economy. It is imperative that the government deal with this blind spot by strengthening the controls and reaffirming its commitment to preserving our economic sovereignty for the long term.
Over the years, the Canada Investment Act has been watered down. The threshold for a government review of an investment keeps going up. Almost all of the investments slip through and the government does not even have the power under the Canada Investment Act to assess whether each investment is beneficial.
The current act, introduced in the mid-1980s, assumes that full liberalization of investment is a good thing, that just about any foreign investment, whatever it may be, is beneficial, resulting in the loss of decision-making levers and head offices—weakening Montreal's financial sector in the process—the total dependence of our businesses on foreign suppliers, possible land grabs and the loss of control over our natural resources. Doing nothing is disastrous.
By focusing solely on national security, Bill C‑34 does not address Quebeckers' and Canadians' gradual loss of control over their own economy. In an economy that is in transition, that is no longer something we can afford, not that we could ever afford it.
COVID-19 has also caused us to reflect on many aspects of impacts, including the devaluation of certain head office assets and dependence on supply chains. If we are not producing vaccines, for example, we are dependent on foreign vaccine portfolios. This cost us billions of dollars. I am eager to have this information. If we had domestic companies that could have been protected, maybe we would still have assets, and it would have cost much less to secure the health of our population.
To that end, we invite the government to table another bill to modernize the entire Investment Canada Act, not only the part on national security. National security is important, but so is economic security. In particular, the government should significantly lower the threshold beyond which it authorizes foreign investments without a review.
Bill C‑34, which focuses mainly on national security, also raises legitimate concerns for many Quebeckers and Canadians. Although protecting national security is a crucial part of the legislation, it should not overshadow the gradual loss of control over our economy.
As a citizen concerned for our economic future, I call on the government to go beyond a simple review of the Investment Canada Act's national security provisions and to adopt a more holistic approach to modernizing the entire act. National security is undeniably a major concern for any government. However, it is just as important to consider economic security. The economic well-being of the provinces is closely linked to our ability to protect and promote our local industries.
The federal government must pave the way for greater recognition of innovation zones and the efforts made by stakeholders in these vital zones.
For example, Abitibi—Témiscamingue is rich in minerals that are critical to the new economy. We have expertise in this area, and this could put Quebec on the map internationally. Once again, I invite and even encourage the minister and those advising him to recognize our uniqueness and the leaders of my community by working with us to increase economic activity in and around the mines. I also urge them to protect the efforts being made to develop these companies, which are so sought after by foreigners.
The government must act decisively and lower this threshold considerably in order to effectively protect our economic interests.
The Bloc Québécois has raised this concern numerous times, and we have conveyed it to the minister and his officials every time the Investment Canada Act came up for discussion. I have personally done so.
The current threshold is too high. This means that many potentially sensitive transactions are not being reviewed by the relevant authorities. Lowering the threshold for foreign investment will enable the government to better control transactions that could have a negative impact on our economy. That does not necessarily mean that all foreign investments should be blocked, but rather that we must be able to carefully evaluate each case and impose conditions, if necessary, to ensure that these investments truly benefit Quebec or the rest of Canada.
By modernizing the entire Investment Canada Act, the government can also put in place mechanisms to encourage investment in key sectors of our economy. Tax incentives, targeted subsidies and other incentives can be used to attract domestic and foreign investment in areas such as technology, R and D, manufacturing and many other vital sectors. The aeronautical field also comes to mind.
In addition, modernizing the act can help ensure that foreign investment does not compromise our economic sovereignty by allowing foreign players to take control of our strategic companies. Appropriate control mechanisms must be put in place to ensure that Canadian companies remain under Canadian control and Quebec companies remain under Quebec's control. This is necessary to protect our interests.
It is important to note that the modernization of the Investment Canada Act should not be seen as an isolationist measure, quite the contrary. We recognize the value of international trade and foreign investment in our economy. However, we have a duty to protect our long-term economic interests. In that sense, ownership of our resources is a fundamental issue.
The government is responsible for striking a balance between national security and economic security. By modernizing the Investment Canada Act in a way that takes both of these aspects into consideration, we can guarantee that our economy will remain, strong, competitive and sovereign.
I want to dig into the pandemic example a little more because there is something interesting there. Some companies, like Air Transat, lost value. Air Canada was in a similar situation. The Standing Committee on Industry and Technology did a study on the Investment Canada Act and its potential repercussions.
I believe that Bill is essentially the product of the recommendations that came out of the work we did in committee at the height of the COVID‑19 pandemic. One of my concerns back then was potential loss of value due to a major economic factor such as COVID‑19. Given the current inflationary context, we may still be heading for a recession. Interest rates have gone up a lot. We know that the situation with the Canada emergency business account is key to the survival of our SMEs. About 80% of them have not yet started repaying their loans. Many businesses are in danger.
Had we been able to lower the thresholds and provide better protection for these businesses, maybe we could have saved these strategic assets. Based on the overall current context, we believe that lowering the thresholds is still appropriate. Economic growth can never be taken for granted.
Lastly, by focusing mainly on national security, Bill C‑34 fails to adequately address the fact that Quebeckers and Canadians are gradually losing control over their own economy. It is imperative that the government table another bill to modernize the entire Investment Canada Act by significantly lowering the foreign investment thresholds, introducing incentives to stimulate domestic and foreign investments in strategic sectors, and protecting our economic sovereignty.
As I have said before, national security is important, but so is economic security. Our future depends on it.
Mr. Speaker, I am very happy to rise here today once again to speak to Bill , which would update the Investment Canada Act. I spoke to this bill on Monday. It is now Thursday and not much has happened in the interim. We did consider a report stage amendment and voted on it, an amendment that would have taken some of the powers vested in the minister in this new act and moved them to cabinet. That amendment was defeated, so we are basically back to where we were when it came out of committee at report stage. I will therefore be repeating some of my comments from Monday, naturally.
This act is designed to do two main things. It is designed to ensure that foreign investments in Canada have a net benefit for Canadians and that foreign investments are not detrimental to our national security.
As I said previously, many Canadians will know this act from its first iteration, back in the seventies, as the Foreign Investment Review Act. It was brought in at that time because there was a rash of foreign takeovers, predominantly American takeovers, of Canadian companies. American companies were moving in as the economy was booming in the fifties and sixties. There was money for these companies to expand. They moved north and started to buy up Canadian companies. I remember that at that time, to go way back, there was real concern in Canada about this trend of foreign companies taking over Canadian companies, sometimes moving their operations entirely out of the country, sometimes just keeping them as branch plants of larger multinationals.
The Foreign Investment Review Act was brought in then to deal with this situation. It reviewed these transactions as they took place, and the Foreign Investment Review Agency approved about 90% of them. Canadians are open to investment. We know that we need investment to grow our economy, but 10% of those applications were turned down by the Foreign Investment Review Agency in the seventies and early eighties. That brought criticism to the agency by both Liberals and Conservatives, who thought we should be open for investment and should not be turning down some of these applications.
In 1984, Brian Mulroney brought in this act, the Investment Canada Act, to replace the Foreign Investment Review Agency with Investment Canada, of course saying he wanted to welcome foreign investment. True to his word, under the Mulroney government, the new Investment Canada entity did not turn down any applications for foreign takeovers.
The Liberal governments that followed Mulroney's, those of Jean Chrétien and Paul Martin, had the same record, with not one application being blocked. The Harper government was a different story. Harper blocked the sale of British Columbia-based MacDonald, Dettwiler to the American company Alliance based on both financial benefits to Canadians and the critical technology argument.
On the other hand, in 2012, the Harper government allowed the $15-billion sale of Canadian oil company Nexen to the China National Offshore Oil Corporation, owned by the Chinese government, and the $6-billion sale of Progress Energy to Malaysia-based Petronas. Then, on the same day, the Harper government changed the Investment Canada Act to block state-owned foreign investments in Canadian oil and gas companies. It was a good thing but essentially closed the barn door after the horses had left.
Legislation regulating these foreign takeovers in Canada of Canadian companies has changed from time to time over the past few decades. Foreign investment trends have changed as well. The share of investments in Canada by the United States has declined over the past few decades, but it still leads the pack. It is still the main country, not surprisingly, dealing with foreign takeovers of Canadian companies because of its close proximity to us and the history of co-operation between our countries. It is followed by the Netherlands, the United Kingdom, Luxembourg, of all places, Switzerland, Japan, China, Germany, Brazil, France and Bermuda, although I assume, as I said on Monday, Bermuda and Luxembourg are there because that is where Canadian companies are sheltering their profits; they are not bringing investments from those countries. It is clear that we need to keep up with the times in regulating foreign investment, and Bill is another example of that.
Information and data are the new oil, and earlier versions of the Investment Canada Act were essentially blind to that. I have talked to numerous companies over the years, especially tech companies. At the natural resources committee and now at the international trade committee and the science and research committee, one story I have heard repeatedly from companies is that while small Canadian companies, especially tech companies, work hard to develop new technologies, say in hydrogen energy or AI advances, when it comes to expanding companies to get their products to market, they need investments. These companies develop technologies and do all the testing, and when they have a product that people want, they have to invest to expand their operations to get their products to market. We often call this stage the “valley of death” because so many companies fail at that.
In the Canadian tech ecosystem, we do not have big Canadian tech companies that can help invest in smaller companies, so too often the investment they attract is taken over by foreign companies from the United States, Europe or China. With those sales goes the intellectual property, the ideas behind that new technology, and the real core of the company's value disappears from Canada immediately.
The present version of the Canada Investment Act allows companies to report takeovers after the fact, so a foreign takeover could happen and then it is reported to Investment Canada. However, when that happens, for instance with a tech company takeover, we need some way of reviewing the takeover before the transfer of intellectual property happens.
Bill has a pre-implementation filing requirement for certain investments to give early visibility to situations where there is a risk that a foreign investor will gain access to sensitive assets or information immediately on closing a deal, because if critical intellectual property is involved, it is usually too late to stop the transfer of that information if it is done after the fact. It is not like the old days when the main value of a company was in the factories it owned or in the rights to natural resources, that sort of thing. This new pre-implementation filing could help put a stop to that, where necessary.
As an aside, on top of this, we really need to develop domestic measures to help develop and protect intellectual property here in Canada so that companies are better prepared when they get to that stage and can keep intellectual property in Canada, where it can be used to help grow our economy. Canada is the leader in many areas that are now very important in the world of technology, such as AI and, as I mentioned, the development of hydrogen energy and fusion. There are various technologies that we are the leader in, and we risk losing that leadership position if all of this intellectual property gradually leaks away.
What are some other things that would make this bill even better? First, the act should mandate the review of an acquisition by a state-owned enterprise of a company previously reviewed by the ICA. This refers to situations where a foreign company takes over a Canadian company and Investment Canada reviews it, finds the company is okay, as it looks like Canadian interests would be protected, and then okays it. After that happens, sometimes the foreign company is taken over by, say, a foreign state.
This has happened several times with Chinese companies, and I will talk about a couple of them. It is a real concern. I mentioned Monday the story of a company called Retirement Concepts, which owns and operates seniors residences in British Columbia, Alberta and Quebec. These are long-term care homes taking care of our seniors. I have told the tragic story of a family's loss of both parents to inadequate care in the Summerland Seniors Village, which is one of the Retirement Concepts care homes in B.C. that is very close to where I live. Suffice it to say that Retirement Concepts has a checkered history of investigations for its operations.
Even after that, in 2016, Chinese insurance giant Anbang, then a privately held company, bought Retirement Concepts. The transaction was reviewed and okayed by Investment Canada, but less than a year after that purchase was okayed, the Chinese government seized the Anbang company and jailed its chairman for fraud. Perhaps it knew something the Canadian government had missed when that review was carried out.
Suddenly, we have the Chinese government owning a company that is one of the largest providers of long-term care in Canada, and certainly the largest in British Columbia. Not only is it one of the largest providers of long-term care for our seniors, taking care of our mothers, fathers, grandfathers and grandmothers, but it is known to provide very poor care for seniors in many situations. In fact, in 2020, the British Columbia government had to seize management control of four care homes run by Retirement Concepts because of continuing problems of poor care. It returned that control just over a year later, but it is an indication of the lack of priority Retirement Concepts has placed on the care of seniors.
At present, I do not see any direct provisions in the ICA that would allow Investment Canada or the minister to review the subsequent acquisition by a state-owned enterprise of an ICA-approved takeover or merger by a foreign private company. We have to change this.
The NDP put forward an amendment that would allow for the review of a takeover by a state-owned enterprise of a previously approved acquisition of a Canadian firm. This could be done by establishing the power to require a mandatory divestment of all Canadian assets by entities in these specific circumstances. This is an example of where we could and should take a big step in that direction.
I have been told the NDP amendment to fix this was ruled out of order because the government claimed it now has the power to enforce the divestment of any state-owned purchase. If that is the case, then it should act on Retirement Concepts without delay. This would not only take the Chinese government out of the business of taking care of our seniors, but would be a step toward taking all for-profit enterprises out of seniors care. There is not place for profit in our health care system, and that includes seniors care.
Anbang also features in another cautionary tale about foreign takeovers in Canada, one that highlights the risk of exposing Canadians' privacy and digital rights. This was again in 2016. Anbang was very busy in 2016 buying up Canadian companies. The Chinese company Bluesky Hotels took over InnVest, a Canadian real estate company that invests in hotels and owns over 100, in a deal worth $2.1 billion. It was the biggest owner of Canadian hotels.
It is alleged that Bluesky is just a front for Anbang, because that company initially wanted to acquire InnVest, and the executive in charge of Bluesky is a former employee of Anbang. However, Investment Canada reviewed and approved the takeover. As I mentioned, a few months later, Anbang was seized by the Chinese government.
This development has raised significant concerns regarding privacy issues, among other things. China's Ministry of State Security was reportedly behind the massive cyber-attack against the Marriott hotel chain, compromising the personal information of 500 million guests. This has heightened the concerns of the employees and guests of InnVest hotels. Therefore, we need to amend the Investment Canada Act to allow for a privacy protection review.
Another factor to consider in investment reviews is preventing publicly funded research and development from leaving the country, resulting in the loss of jobs and, basically, the theft of taxpayer dollars. A company called Nemak received $3 million from the government's automotive supplier innovation program. However, in 2020, Nemak closed its plant in Windsor, where those funds had been used to create new products for General Motors, and transferred the technology and those jobs to its operations in Mexico.
An NDP amendment passed in committee would allow for the review of a foreign takeover, which would consider intellectual property that was developed with funding from the federal government and issue remedies to retain the benefits in Canada. Therefore, a situation such as that of Nemak would not happen again. The foreign investment review would now also include the effect of the investment on the use and protection of personal information of Canadians. This would help prevent such situations as the one we saw with Bluesky and Anbang. The federal and provincial industrial, cultural and economic policies affected by foreign investment would now be included in the review as well.
I will conclude by running through some of the amendments that were passed at committee that strengthened the bill or, at least, changed it.
One amendment was to allow the investment made by a foreign entity, especially state-owned enterprises, to be fully reviewable, regardless of the size of the investment. Before, there was a lower limit that would trigger a review. In addition, in clause 8, there was the NDP amendment, which I mentioned, that would trigger a review on a takeover of a company by a foreign company that would see the loss of intellectual property and technology that had been funded by the federal government.
There is an amendment that would expand the investment review to include partial investments by foreign entities; another amendment would include a non-Canadian who has been convicted of an offence involving corruption as part of the investment review process. Hopefully, if they found out that the head of a company such as Anbang was charged with fraud, that would trigger a review right away and probably result in the cancellation of that transaction.
There is another amendment to impose interim conditions on both the foreign entity and the target Canadian business during the review process, as long as national security risks are not increased. Another amendment that involves national security instructs the minister to provide copies of any order concerning a foreign investment review to the National Security and Intelligence Committee of Parliamentarians and the National Security and Intelligence Review Agency.
I will finish by saying that, in this new world where ideas and data are more valuable than the natural resources we have so long relied on, we need a new regulatory framework to protect our industries, our workers and our companies.
Mr. Speaker, I am not that up on technology and social media to be able to talk about chatbots.
The point is, as other members have made reference to, that things have changed considerably, and one of those things is dealing with technology and amplifying the issue of AI.
It is interesting when I listen to the Conservatives, and their critic in particular. They have so many reservations about seeing this legislation ultimately pass. We saw that in their statements today and in the questions they are posing. Earlier today, one of the Conservative members stood in her place and talked about how bad the Government of Canada, that we kind of sneak around to do things, and then asked why we would want a minister to be responsible. I asked the member to reflect on an incident that occurred a number of years ago.
When Stephen Harper was the Prime Minister of Canada, he ventured over to China and I believe brought back a commitment to bring panda bears over from China. What was not well advertised was that he put in place an investment protection agreement. The other day I made reference to it as a free trade type of agreement. The member for stood in his place and demanded that it was not a free trade agreement, but rather it was an investment protection agreement.
We can play with words all we want, but the bottom line is that agreement was done in complete secrecy. Therefore, when Conservatives stand up and talk about how we are going to give all this power to the minister, I think they should reflect on Prime Minister Stephen Harper and the manner in which he put into place a substantive agreement known as an investment protection agreement between Canada and China.
If we contrast that to many of the things the Conservatives are saying during the debate on Bill , I think they would be a bit surprised with what would have happened had they had the same principles they have today back when that agreement was signed with China, because we know what their attitude toward China is today.
I say that because, when I think of the legislation, I believe that having the authority lie with the minister, who has an obligation to consult with the public safety minister, which is often not mentioned, adds a great deal of strength to the legislation. Ultimately, there is accountability for the minister that takes place in different forums, whether it is through question period, orders for return, the minister going to committee or in the form of written letters. Today there are many types of mainstream media outlets that members can go to, as well as social media. There are many different ways in which the opposition is able to track, oppose and raise the level of public debate on issues.
Therefore, I do not share the concerns that members across the way have with this legislation now giving more authority to the minister. The minister can now request a further national security review.
We need to recognize that the primary purpose of this legislation is to protect Canada's best interests on the issue of foreign investment. It is interesting. We have heard in the chamber a great deal about foreign interference. We have had committees study it. We have had a public inquiry of sorts looking into the issue of foreign interference.
Investment is another way in which countries can, in fact, cause issues related to foreign interference concerns. I would have thought that would have elevated the need to see this type of legislation not only being talked about, but also passed.
The New Democratic critic was talking about amendments, as was the Conservative critic. They were talking about the amendments that were not passed. There are two issues that I would highlight, which the members did not reference.
One issue is that, in approaching the committee, the government was very open to improving the legislation through amendments, if the amendments could improve the strength of the legislation. What we saw, as we often see, at least in this government, was a willingness and an openness not only to listen to potential amendments, but also where it makes sense and adds true value in terms of the strength and scope of the legislation, to see the amendments pass. We saw that at the committee stage. We saw significant amendments proposed and passed. Not all amendments passed. A member referenced one of the amendments that he was concerned about, but then he was assured that the minister already would have the authority to be able to do it, and the amendment was not approved.
The point is that today the legislation is even stronger than it was prior to going to committee. That is why we, including me, pushed very heavily to get Bill out of second reading so that we could get it to committee stage and look at potential amendments.
Members can correct me if I am wrong, but at the end of the day, I believe that the legislation is going to be receiving all-party support. I am not too sure about the Green members, but I do believe it will be receiving substantial support.
I know there are other pieces of legislation that the opposition has concerns about. The Ukraine trade agreement is one of them. Much to my surprise and the surprise of many, it would appear that the Conservative Party might not be supporting that particular agreement. It is important. It is an important part of foreign investment, and let me tell members why.
At the very beginning, back in 2015, when we took office, we made it very clear that as a government we wanted to be there to support Canada's middle class and those aspiring to be a part of it. I suspect that if members were to do a search in Hansard, they would find that I have re-emphasized that on many occasions. That is the type of action and the type of budgetary and legislative measures that we have put into place to support Canada's middle class and those aspiring to be a part of it, not to mention the many other policies to assist in lifting other individuals, including seniors and children, out of poverty.
A big part of that is to recognize that Canada is a trading nation. When I say it is a trading nation, we can look at the number of agreements that were signed off by this government. Never in history has a government signed off on as many trade agreements as this has. That is a clear fact.
No doubt there was some preparatory work done under the previous administration, but the signing off and the finalizing of those agreements were done under this administration. Trade is important to our communities in all regions of our country.
I have referred to HyLife, as an example, in the community of Neepawa, Manitoba. At HyLife, they process literally hundreds, if not thousands, of pigs every month, and likely thousands of pigs are processed every day in Neepawa. Think about the jobs created as a direct result, whether in the farming community or on the factory floor. Colleagues may be surprised to know that the last time I had a tour of the facility, 98% of what was coming off the floor was being exported to Asia.
That particular firm is not alone. I think it amplifies how important trade is and the opportunities that trade provides. Think about investments. Having those trade agreements encourages more investment, foreign investment. When people look at those direct jobs I referred to, they should think about the indirect jobs that are a direct result of those. Farming and working in factories, and every job in between, could be classified as direct jobs. Indirect jobs would be selling cars, and making restaurants, houses and appliances. Those are all indirect jobs because of the economics of having that particular processing facility, all of which demonstrates why trade is so important.
Let us compare Canada to any other country in the world, including the U.S.A., and it has trade agreements that expand the world. As a result, as part of having those special relationships with countries around the world, it sends another message that Canada is not only a good country to trade with but also a good country to invest in. I believe, if we apply that perspective to the advancements we have seen in small businesses in every region of our country, whether small, medium or big, we should all be concerned about how money is flowing into the country and being invested in companies that are already up and running. As I indicated, if we think back to foreign investments in 2009-10, the world was very different, with respect to technology and AI.
There are so many other factors at play. That is why it is important that we bring forward Bill . By doing that, we are ensuring Canadian interests are, in fact, protected. An ideal example of that would be any foreign company investing in a company in Canada for the purpose of taking it over and then potentially shutting it down, or taking the technological advances or AI development within it and taking it out of the country, thereby limiting potential growth in that area, especially in areas of expertise.
My friend from the Bloc referred to the industries in the province of Quebec. In the preamble of my question to him, I pointed out that there are a lot of similarities between Quebec and Manitoba. Manitoba's aerospace industry is very important. The other day, I met with someone at StandardAero, and we talked about the importance of the aerospace industry and engines. That company has been in Manitoba for over 100 years.
There are all sorts of things that take place in our specialized industries, whether it is aerospace or hydro, again, something we have in common with the province of Quebec. There are certain sectors throughout the country in which I suggest we are on the leading edge, and we need to be very cognizant that some outside characters might not necessarily be acting in good faith when they say they want to acquire company X. That is why it is important that this legislation passes. It is important that the has the ability to make those decisions and to work with the .
There are many other ways to ensure there is public awareness and a high sense of accountability, which I alluded to earlier. It is why I am hoping the Conservatives, the opposition, will recognize the value of the legislation. It is now at third reading. It is in a great position to pass and, hopefully, time allocation will not be required.
Mr. Speaker, it is a pleasure to stand in the House today and talk about Bill , which is the Liberals' attempt at increasing security on foreign investments in this country.
Before I get under way, I would like to announce that I am going to share my time this afternoon with the hon. member for .
This is an important issue in the country, and it is an important bill, Bill , that we are facing here today. We cannot simply allow authoritarian regimes whose values and goals are fundamentally opposed to ours here in Canada to control important infrastructure or resources in this country. We must protect Canada's national economic and security interests. However, after eight years in power and two years after the industry committee presented this report on the issue, the government is finally trying to take action on the file. I want to acknowledge the work done in the committee both on the initial study and on improving the legislation before us. I think further improvements definitely can be made, but I will get into that a little later.
The world, as we know, is changing every day. Quite frankly, we all know this is kind of a dangerous time right now. National security needs to be top priority, even though the government has decided to take $1 billion out of the national defence fund at this time. It is unreal that the Liberals would even think of doing such a thing. Internationally, we have seen conflicts sprouting up almost every month. We have the Russian invasion of Ukraine as a perfect example of an authoritarian dictator willing to do whatever he wants to get whatever he wants. We look at the resources involved and ultimately how Russia will use violence to violate the sovereignty of its neighbour next door.
Domestically, we are seeing what countries will do to increase their influence and control where they cannot simply invade. Russia and Beijing are actively interfering in our elections, which we know is a fact. Kenny Chiu, whom I sat with in the last Parliament, is not here, because of the interference from Beijing. Also, foreign state-owned enterprises have acquired interest and control in many Canadian companies, intellectual property and other assets. They are gathering data daily on our citizens and they are exploiting that data. Just today, on the front page of the national newspaper, The Globe and Mail, the headline reads “Huawei still filing patents tied to work done with Canadian universities after Ottawa's restrictions.” It goes on to say that “The Chinese tech company Huawei Technologies is still seeking patents for research it conducted in partnership with publicly funded universities in Canada, more than two years after Ottawa began restricting funding for academic collaborations with connections to foreign states considered national security risks”.
Huawei has filed patent applications for research on 5G wireless; artificial intelligence, which has been brought up in the House in the last hour; semiconductors; and the optical communications done in collaboration with academics and investors at the University of Toronto. We have see it at Queen's University, the University of B.C., Western University and McMaster University. All those universities, they say, are fulfilling pre-existing contractual partnership agreements. However, let us make no mistake: All of the commercial rights to this property, which has been invented by Canadians and funded by Canadians, are now owned exclusively by Huawei. This is what we are talking about in Bill . I have more to say on Huawei and what it has done in my province of Saskatchewan. I will come to that.
The end goal, obviously, is to take over as much of Canada's economy as possible in order to make us beholden to foreign powers that have no interest at all in democracy, freedom and the rule of law. We can see this happening all over this country. We see Chinese state-owned enterprises buying up farms, fisheries, mines and other things.
Even in my province of Saskatchewan, when I drive around, I will see signs in the ditch saying that if people want to sell land, they should call a certain 1-800 number. If they call that number, it could be a third party. Indirectly, what is happening is that somebody in Beijing or China is wanting to buy Saskatchewan farmland. Saskatchewan farmland, as we all know, has gone up considerably over a number of years because, in my province, we are proud of it. We want to feed the world. This is what we are seeing in this country in ditches everywhere. I mentioned Saskatchewan, and I have been to Manitoba, Alberta and elsewhere, and I know there are signs in ditches saying that that if people want to sell land, they should call a 1-800 number. When they do, they get a third party talking on behalf of probably China or other countries.
We are in a situation where people need to be able to trust that their Parliament and their federal government are protecting them and their country. Unfortunately, this is another example of the Liberal government's doing something too late with Bill . The bill would not go far enough to address the risks faced by all 40 million of us Canadians. Given recent events, it needs to be much stronger.
I can recollect that in 2021, the industry committee studied the act and put out a report explaining how the act could be improved. Clearly, the government mostly ignored that report, because in Bill , the government addressed only two of the nine recommendations that the committee put forward at that time. Let us fast-forward to this year at the industry committee, meeting once again. My Conservative colleagues were able to make some modifications to improve the bill and address some of the gaps, including important amendments that would ensure a more rigorous review process of investments and acquisitions by foreign state-owned enterprises. Those amendments were to lower the threshold for national security reviews of foreign purchases by state-owned enterprises, make it mandatory for the minister to conduct a national security review when that threshold is met and, finally, create an automatic national security review whenever a company has been convicted of corruption charges. These were important and necessary improvements to the bill. I am very glad that the committee saw the common sense of these amendments and adopted them.
However, the legislation still would not go far enough. The NDP-Liberal government rejected amendments that would have further improved the legislation and properly and fully protected Canadians. One of the rejected amendments, one which I think is crucially important, would have modified the definition of a state-owned enterprise to cover companies or entities headquartered in an authoritarian state like China. I understand the potential concerns with such an amendment; the nationality of the company should not usually be sufficient to label it a state-owned enterprise.
This is where I was going to get to Huawei and the reaction of the industry minister, a couple of years ago, in not making a decision on Huawei. I think it has cost my province of Saskatchewan $200 million. The province was invested into Huawei for 4G in the province of Saskatchewan. It was waiting for the minister of industry to make a decision on Huawei. It took him months. Finally, he made the decision, but the province of Saskatchewan was into Huawei for over $200 million, so it had to put on the brakes and then reinvent itself. This has cost Saskatchewan and others in this country millions of dollars. This is something that our allies in the Five Eyes alerted Canada about long before the minister made the change, and it has cost Canadians a lot of money.
I just wanted to make those points. I am concerned about Huawei, as it is taking information from the five universities still today, when actually Huawei should have been out of this country long ago.
Mr. Speaker, I rise today to speak to Bill , a bill that attempts to strengthen the Investment Canada Act with significant amendments.
As we approach the discussion on Bill , a critical examination is warranted. It comes after an extensive period where our national interests have been left vulnerable to foreign entities.
After eight long years under the Liberal government, the urgency to safeguard our economic and security interests seems to have taken a back seat, as it has taken us this long to look at protecting Canada's economy.
The core concern here is the significant presence of state-owned enterprises, particularly from the People's Republic of China, the PRC, within the Canadian economic landscape. This is not a matter of casting doubt on foreign investment as a whole, which has long been a source of innovation and growth within our economy. However, there is a distinction to be made when such investments are linked to foreign governments with agendas that do not align with Canadian values or interests.
Bill proposes to strengthen the Investment Canada Act, yet one cannot help but ponder whether the measures are sufficiently robust.
This bill does introduce mechanisms that might allow us to better scrutinize these investments. Indeed, the imposition of stringent penalties and the elevation of national security reviews are steps in the right direction. However, the specifics with which we address the challenge posed by the PRC are lacking.
It is imperative to understand that the issue at hand is not one of mere procedural delays or legislative enhancements. It is a matter of national sovereignty and the integrity of our economic and security infrastructure.
The amendments within Bill would grant the minister enhanced powers to investigate and intervene, yet there remains an imperative to want to question the thoroughness of this approach.
Have we provided a framework robust enough to contend with the sophisticated strategies employed by state-owned enterprises, particularly those backed by the government in Beijing? The PRC has demonstrated its capacity and inclination to wield economic leverage as a tool of broader geopolitical strategy. The foresight is to anticipate the sectors of our economy that may be targeted for acquisition, and control is crucial.
The legislation mentions the creation of a list of sensitive sectors that would warrant automatic review, yet it does not preclude the possibility of loopholes being exploited.
Let us turn our attention to the particulars of Bill , where we must sift through the substance of proposed reforms.
The bill, as it stands, attempts to pre-emptively secure investments that might pose a risk to national security by instituting a mandatory filing requirement. This is indeed a prudent move, but how we define specified investments and the criteria for such pre-emptive measures must be crystal clear to avoid any grey areas that could be exploited.
In simplifying the process for the minister to act on national security reviews, we are placing significant trust in the judgment and efficacy of a single point of failure. While streamlining may expedite action, it also bypasses layers of scrutiny that can be vital in making balanced decisions. In the hands of one, the decision may be swift, but the question remains, will it be thorough?
Strengthening penalties for non-compliance sends a clear signal. It communicates the seriousness with which we take these matters. However, the deterrent effect of these penalties lies in their enforcement. Without a track record of rigorous enforcement, penalties on paper may not translate into a meaningful deterrent in practice. We must not just increase fines; we must demonstrate that we will impose them.
Also, granting the minister authority to impose conditions and accept undertakings opens the door to inconsistencies and influence of which we must be wary. When we consider the removal of the Governor in Council's involvement in the initial stages of a national security review, we must ask if we are centralizing power to the point of vulnerability. Oversight is not an enemy of deficiency, but a bedrock of democracy.
In continuing discussion, we must bear in mind the history that brings us to this juncture. We are not operating in a vacuum, but against a backdrop of past decisions and actions that have left us questioning the robustness of our investment review process. As we proceed with this dialogue, it is crucial to reflect on past actions that serve as a backdrop to today's discussions on Bill .
We cannot ignore instances where our review mechanisms seem to falter, where foreign acquisitions proceeded with what some would argue was insufficient scrutiny. The case of Norsat International and subsequent dealings involving sensitive technology raises an eyebrow to the effectiveness of our past reviews.
This is not about pointing fingers, but about understanding the gravity of what is at stake. The acquisition of Neo Lithium Corp. by Zijin Mining and the Canada Border Services Agency's use of Hytera Communications equipment, despite espionage charges against Hytera in another allied nation, illustrates a pattern we cannot afford to ignore.
Our legislative framework should not only close the doors to such occurrences in the future, but also serve as a deterrent. Moreover, the pace of global change does not afford us the luxury of reactive policy. We need proactive measures that ensure the safety and security of our nation's interests. This includes comprehensive reviews of state-owned enterprises' acquisitions, regardless of size, especially when countries with aggressive postures on the global stage are involved.
As we bring these concerns into the present context, the urgency to address them becomes clear. We are at a crossroads where the discussions we make today may shape our economic and national security for years to come.
Bill is a step, but there is concern that it does not go far enough. We must ask ourselves, is this legislation merely a reaction to the past oversights, or is it a visionary move to secure our future?
While it makes strides in certain areas, it falls short in terms of automatic reviews and clarity in defining strategic sectors. In the ideal world, every investment would bring mutual benefits without compromising our national interests, yet we know the world is far from ideal, and the bill in its current form does not fully rise to the complex challenges we face.
Part of our duty is to ensure the security of Canada's future. Our duty is to enact legislation that does not just respond to yesterday's challenges, but anticipates tomorrow's threats. While Bill moves to tighten the reins on foreign investment and strengthen our defences, we must ensure it is not a case of too little, too late.
This is not just about adjusting the mechanism of the Investment Canada Act. It is about safeguarding the heart of Canadian innovation and security. Our vigilance in reviewing and improving this bill will demonstrate our unyielding commitment to the prosperity and security of Canada.
Let us ensure that this legislation is more than a response to past oversights. Let it be a steadfast guideline of our future economic sovereignty. This is our duty and it is one we must undertake with the utmost seriousness and dedication.
I appreciate the opportunity to address these crucial issues. Let us proceed with a clear vision and a firm resolve to protect the interests of Canada. I look forward to taking questions.
Mr. Speaker, before I begin, I would like to advise that I will be splitting my time with the very hon. member for .
I am pleased to rise today to speak to the bold moves taken by the government to address economic and national security threats to Canada through Bill , an act to amend the Investment Canada Act. I would also like to highlight the great collaborative work done during the committee's study to make the bill even stronger.
Bill sets out a series of amendments to improve the national security review process of foreign investments and modernize the Investment Canada Act. Collectively, these amendments are the most significant legislative update of the act since 2009. These amendments also represent one of the multiple steps the government has taken to ensure we can defend our economic interests, contribute to the resiliency of the global supply chain and protect our national security. This, in turn, helps us to attract stronger partnerships with our allies and to foster economic growth, a strong foreign investment regime and good beneficial investments in Canada, ones that will create high-quality jobs and opportunities for Canadians.
Defending our economic interests and protecting our national security are issues of critical importance, especially since our current climate of rapidly shifting geopolitical threats. This issue is a non-partisan one. During the six sitting days that Bill was debated, the House repeatedly stressed the need to modernize the Investment Canada Act to achieve those objectives. The House ultimately decided in a unanimous vote to refer the bill to study because we all recognized how important it was to get these amendments right so we could protect national security while ensuring we are not chilling useful and good investments.
We recognize that Bill has undergone a rigorous, robust study that spanned 11 meetings. During those meetings, the committee heard from a variety of legal and subject matter experts who testified about the benefits of foreign direct investment on Canadian business, the importance of protecting Canada's hard-earned intellectual property and the need to ensure our regime is capable of tackling the emerging national security challenges that Canada and our security partners are facing. We have engaged meaningfully with opposition members to discuss their perspectives and concerns and have worked collaboratively to bring new amendments that further strengthen the bill. We worked together to ensure that Canada's foreign investment regime continues to be the gold standard. The bill would not only provide us with better tools to protect our national security, but also help bring Canada into greater alignment with our international partners and allies.
The industry committee heard from witnesses about how important it is for Canada to have a regime comparable to its allies. Having a comparable regime would help to address common threats and maximize our collective effectiveness. One example of how we have aligned our regime closely with our allies through Bill is the new requirement for prior notification of certain investments. The United States, the United Kingdom and Australia all have introduced something similar within the past two years, either through recent amendments or stand-alone regimes.
The United States amended its foreign direct investment laws and added new types of transactions for government review. For the first time ever, it mandated notifications in transactions involving critical technologies, certain critical infrastructure or the sensitive personal data of American citizens. These regulations came into effect in February 2020.
Australia updated its law on foreign direct investment in January 2021. It introduced authorities to protect national security, including powers for the Australian government to require mandatory notification for transactions involving a national security business before the transactions are implemented.
The United Kingdom introduced a new regime for national security and investments in 2021. The U.K. legislation created a mandatory obligation to secure clearance for transactions that would acquire control of a business in 17 sensitive sectors before the transaction is completed.
The new pre-implementation filing requirement for Bill would allow Canada to have even better and earlier oversight over investments in certain sensitive sectors, especially when they give investors material access to assets and non-public technical information upon closing, such as cutting-edge intellectual property and trade secrets.
This amendment would enable the government to prevent irreparable harm through the loss of these intangible assets. Investors would now be required to file notification in time periods set out by regulation.
I want to emphasize that this amendment is a targeted approach limited to only certain business sectors. Across the board, a pre-implementation filing requirement would have an unnecessarily burdensome impact on businesses and investors without improvements to national security protection. Our targeted approach would provide greater certainty and transparency to businesses and investors.
Another example of Bill better aligning Canada's regime with those of its allies is its introducing the authority for the Minister of Innovation, Science and Industry, after consultation with the Minister of Public Safety, to impose interim conditions on an investment. This would reduce the risk of national security injury taking place during the course of the review itself, such as through the possible transfer of assets, intellectual property or trade secrets before the review is complete. This amendment is similar to the U.K.'s new power that allows its government to impose interim orders while the review is being conducted, preventing foreign investors from obtaining confidential information or accessing sensitive assets or sites until after the review is complete.
Finally, Bill introduces the authority for more direct information sharing by the minister with international counterparts for national security reviews to help common security interests. Previously, the minister had a limited capability to share case-specific information with their international allies. We know that Canada and our allies share similar national and economic security concerns. Our allies are concerned with threat actors operating in multiple jurisdictions to secure a monopoly in critical assets and technology. It is becoming increasingly more important to share information with allies to support national security assessments to prevent these threats from happening. This new information-sharing authority strengthens co-operation between Canada and other like-minded countries to defend against investors that may be active in several jurisdictions seeking the same technology. That said, Canada would not be obligated to share such information where there are confidentiality or other concerns.
I thank esteemed colleagues for their attention today. I can assure members that our approach is pragmatic, principled and provides a solid framework.
Mr. Speaker, it is an honour to rise today to speak to the modernization of the Investment Canada Act.
As many who are following this debate know, this act was last revised in 2008, so this legislation represents the most significant update to the act since that time. It would ensure that we can address changing threats that arise from foreign investment and would do so while our government continues to welcome foreign direct investment.
As my colleague before me stated, we are rising in the ranks of foreign direct investment, but at the same time, we are also facing global threats unlike ones we have ever faced before. This is a really appropriate time for us to get in line with other allies of ours and update our act to make sure we are keeping Canadians safe as a whole.
Speaking of Canadians, the other day, a young adult in my riding wrote to my office. He is a first-year political science student. He wrote to me about concerns with foreign interference, and some of what he said was quite interesting. He proposed three different areas in which the Government of Canada could do better in order to make sure we are safe from foreign interference threats.
He wrote to me about the recent statement made in this House about Hardeep Singh Nijjar's murder. However, he went a lot further than just this instance and talked about our democracy as a whole and what we should do to protect it now. He said that we are seeing very bold covert operations taking place in our country, whether it is disinformation campaigns, hacking, political manipulation or espionage. All of these things are rising, and there are concerns regarding the traditional boundaries of espionage. He says, there is a shift toward more overt and covert interference in international affairs by state players.
Interestingly, he writes that countries like China, Russia, Iran and India are assembling economic blocs and seem to be more open to taking chances to further their geopolitical objectives. He further says that although covert operations on Canadian soil are not new, Canada is a desirable target due to its advanced economy, technology and abundance of natural resources. He says it is concerning that these problems are converging and that foreign actors can profit from Canada's defining characteristics by taking advantage of our society's openness and variety. It is in our communal responsibility to confront these threats, and we must work together to stop foreign meddling from undermining the core values of our country.
He continued to talk about strengthening cybersecurity and safety measures regarding actors who seek to take over our resources, which we have seen. There has been concern when it comes to agriculture and infrastructure as well. I thought it was very interesting that a lot of these things tie in.
It is an important time for us to be taking these types of measures to make sure we continue to protect Canadians, Canadian interests and our economy at the same time, doing it in a transparent way as we continue to have more and more free trade agreements with countries around the world. Since our country has more agreements, especially those signed by this government, than any other country in the world, we need to make sure we also have the safety nets in place to make sure that, through these agreements, we do not increase our chances of risk.
This bill is an extremely good effort, and I was excited to see that, through the committee process, many amendments were made to further strengthen this legislation. The Conservatives and the New Democrats have all had input. From the speeches I have heard in this House, it looks like we may differ slightly, but there is core support to make sure that this legislation passes, keeps Canadians safe in the future and continues to increase the economic prosperity of this country.