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View Alexis Brunelle-Duceppe Profile
BQ (QC)
Mr. Speaker, I will be brief.
My colleague from Regina—Lewvan did not dare to use the word “hypocrisy”, but I am going to.
My colleague from Winnipeg North reached the height of hypocrisy in his speech. He told us that the prorogation of Parliament did not really harm our work. I think it is unacceptable to minimize the prorogation of Parliament.
The report on the Uighurs was supposed to be published in August, but it was not released until October 19 because the government prorogued Parliament. The publication of that report was important for the Uighur community.
I find what he said today to be appalling.
View Kevin Lamoureux Profile
Lib. (MB)
View Kevin Lamoureux Profile
2021-05-10 19:37 [p.7001]
Mr. Speaker, to be very clear, I agree fully with the Prime Minister's decision to prorogue, given the priority of this government in fighting the coronavirus. It was the right thing to do. We came back in with the throne speech on September 23. I would encourage people to read it. It reset the agenda for the House of Commons. Unfortunately, as we continue to go through this day after day, the Conservatives seem to want to lose that focus and the Bloc seems to have bought into the Conservative con job.
View Sébastien Lemire Profile
BQ (QC)
Mr. Speaker, I will pick up where I left off earlier. I am pleased to speak to the report on the work of the Standing Committee on Industry, Science and Technology, of which I am vice-chair.
I would like to remind members that this study was carried out in the context of the COVID-19 pandemic and examined what action was taken to support our economy.
I would like to highlight the initiative of the member for Calgary Nose Hill, who moved this motion—
View Sébastien Lemire Profile
BQ (QC)
Mr. Speaker, I am pleased to attempt to begin my speech a third time. I acknowledge my colleague from Red Deer—Mountain View, and I am pleased that he is interested in hearing this speech, especially since he is a member of the Standing Committee on Industry, Science and Technology, which I appreciate. He is always there to stand up for the people of his riding, as is the member for Windsor West, who is present and who I hope will be able to give a speech soon.
We are not debating Bill C-19 right now. We are debating the Investment Canada Act. As I was saying, the member for Calgary Nose Hill, who was co-chairing the industry committee with me at the time, moved this motion so that we could study the Investment Canada Act. In the context of COVID-19, we had very legitimate concerns about the devaluation of Canadian and Quebec businesses, which could be at risk of being acquired by foreigners at bargain basement prices. We had the real and legitimate concern that head offices could be moved out of Quebec or Canada, benefiting foreign investors.
China is obviously one potential aspect, but there were many other issues, such as Air Transat and Air Canada. These airlines were seeing a significant increase in liabilities coupled with a significant decrease in passenger numbers. They were becoming vulnerable, which was why the Standing Committee on Industry, Science and Technology met and invited witnesses so that we could protect these companies.
Based on the report summary, “The Investment Canada Act (ICA) allows the federal government to review foreign investments. The ICA provides two distinct processes: a net benefit review and a national security review.” There are two key words.
For me, the net benefit for Canada must always be demonstrated. We expect some transparency from the government in this regard, particularly from the Minister of Industry, who will be able to place conditions on a sale.
Obviously, I am thinking of the acquisition of Rona by Lowe's, which happened in our own backyard. We never found out whether the federal government had laid down any conditions. It obviously must have, to allow the acquisition of Rona by Lowe's. The problem is that since these conditions were never made public, it was easy for Lowe's to back out of its commitments a few years later. Quebeckers are no longer attached to Rona. We saw brick-and-mortar businesses in cities across Quebec close their doors. The key issue is supply. A company like Rona would buy goods from Quebec and Canadian suppliers. Now that it is owned by an American company, it will favour the suppliers that can offer the lowest possible price. For an American company, that lowest possible price will be in the United States.
I just want to provide some background and say that, in its report, the committee recommended a more cautious, responsive, and transparent approach to regulating foreign investments.
I submitted a supplementary opinion on behalf of the Bloc Québécois. Although the report contained enough to make it positive, relevant and constructive, we believed that it was missing some important information, mainly surrounding the issue of reviews. I would like to read to my colleagues the Bloc Québécois's supplementary opinion, which is simply entitled “Better Protecting Our Companies” because that is what this is all about.
Can we trade in our neo-liberal economy for an economy where we protect our domestic market, for a Quebec economy and a Canadian economy where we can be independent, do business with local suppliers and keep our economy going in an independent manner?
It is important to remember that, in the context of COVID-19, we were dependent on other countries, whether it was for personal protective equipment or any other health-related issues, such as vaccine production. We lost eight months because of that.
I want to remind members of the context in which our study was conducted. I think it is absolutely fundamental. It is more important than ever. We need to come back to the principle of a strong domestic economy where we protect our national interests and where we buy from Quebec and Canada.
Here is the Bloc Québécois's supplementary opinion, which is entitled “Better Protecting Our Companies”.
The industry committee's report is an important and welcome change in terms of foreign investment control. The Bloc Québécois welcomes this shift after a decade of inaction, but we would have liked the committee to go even further.
In our opinion, the report should have suggested that the government bring the review threshold for foreign investments down to a reasonable level so that it can determine which investments are truly beneficial. Hence this supplementary opinion.
The federal government's foreign investment policy these past years can be summarized in two words: deregulation and permissiveness. The policy provides for increased scrutiny when national security is at stake, and ongoing oversight when investors are foreign countries. The fear of China is real.
However, the floodgates are open for all other foreign investments, which are approved automatically and without review. Statutory review mechanisms, which the government readily insists on protecting in every trade agreement that it signs, are essentially rendered ineffective for foreign investments.
In 2013, the Conservatives set the tone by announcing that they would raise the review threshold used by the federal government to determine whether foreign investments are truly beneficial.
From 2015 on, the Liberals have been doubling down on this change. Between 2015 and 2020, the threshold applicable to “private sector trade agreement investments” increased from $369 million to $1.613 billion. The result is striking: the share of reviewed foreign investments fell from 10% in 2009 to 1% in 2019. You read that right: under the current rules, 99% of foreign investments are now approved automatically and without review.
This lack of oversight comes at a bad time. Over the past 30 years, the nature of foreign investment in OECD countries has changed. New investments are down, while investments in the form of mergers and acquisitions of existing companies are up. I would add that this trend has only been exacerbated by the COVID-19 pandemic.
Between 2010 and 2015, only 54% of foreign investments in Canada went toward new entities, while the remaining 46% went toward mergers and acquisitions, where foreign investors took over a number of our companies, either in part or in full.
Canada is doing significantly worse than other industrialized countries in this regard. New entities receive 72% of foreign investment in the U.S. and 78% in France, compared to only 54% in Canada. And the trend continues to this day: from 2018 to 2020, mergers and acquisitions accounted for $90 billion of the $244 billion in foreign investments in Canada.
Simply put, over the past three years, foreign companies have invested $90 billion to take over a number of Canadian companies in part or in full. This $90 billion in takeovers has led to the downfall of head offices and turned them into regional offices with little power.
Quebec has gained significant economic and financial leverage since the Quiet Revolution, enabling it to pursue a policy of economic nationalism—the intensity of which varies from one government to the next—that gives Quebeckers greater control over their economy.
Our economic nationalism has two components. On the one hand, we are open to foreign investment as a driver of growth and development. On the other hand, we invest in Quebec companies to keep them intact and fuel their growth. And we protect our head offices because we know how important they are as decision makers.
Quebec does not, however, want to shut the door to foreign investment. Our economy is and will always be open to the world, and openness toward foreign investment is essential for enabling Quebec to access major trade networks, which is crucial for guaranteeing the prosperity of our relatively small-scale economy.
As Jacques Parizeau wrote in 2001, even before China joined the World Trade Organization, “we do not condemn the rising tide; we build levees to protect ourselves.” Unfortunately, weakening the Investment Canada Act has caused those levees to break.
One striking realisation is that the federal foreign investment legislation was being gutted at a time when Quebec was becoming concerned about foreign takeovers and the collapse of our companies' head offices.
In 2013, the same year that Ottawa announced that it would raise the threshold for reviews under the Investment Canada Act, Quebec went in the opposite direction and established the Task Force on the Protection of Québec Businesses.
The task force was established by a Parti Québécois government, co-chaired by a former Liberal finance minister and composed mostly of businesspeople. It reflected Quebec's consensus for protecting our businesses.
The task force began by noting that Quebec's 578 head offices provide 50,000 jobs that pay twice the average salary in Quebec, in addition to 20,000 jobs for specialized service (accounting, legal, financial and IT) providers. That is huge.
In addition, Quebec companies tend to favour Quebec suppliers, while foreign companies with a foothold here rely more on global supply chains, which has an obvious impact on our SMEs, particularly in rural Quebec. As we have seen during the pandemic, global supply chains are fragile and make us entirely dependent on foreign entities.
Furthermore, head offices are essential for Montreal’s financial sector, which is in turn essential for SMEs across Quebec, since it gives them the financial tools needed to spur their development. Quebec’s financial sector is responsible for 150,000 jobs and generates $20 billion, or 6.3%, of its GDP. A large part, close to 100,000, of these jobs are in Montreal, which ranks 13th among the world’s financial centres according to the Global Financial Centres Index.
Lastly, companies tend to concentrate their strategic planning, scientific research and technological development where their head office is. In other words, a subsidiary economy is a less innovative one.
The task force’s recommendations were mainly addressed to the Quebec government: make more equity investments in companies, facilitate the distribution of employee shares and better equip boards of directors against hostile takeovers.
However, the power to legally regulate foreign takeovers to ensure that they are beneficial for the economy and society is in Ottawa’s hands. And at a time when Quebec was concerned about foreign takeovers of its key economic assets, the federal government chose to relinquish its power to keep foreign investments in check.
Quebec and Canada are two contrasting economies.
While Quebec upholds economic nationalism, Canada focuses on deregulation. That is because our economies are different.
Quebec’s economic nationalism encourages Quebec companies to grow. However, Canada’s economy is largely based on major foreign companies’ subsidiaries. Whether in the automobile industry, with Ford Canada, GM Canada and so on, or in the oil industry, with Shell Canada and Imperial Oil, Canada has had a subsidiary economy for a long time.
As for Canada’s large companies, they operate in industries that are protected against foreign takeovers by federal law, such as finance, rail and telecommunications. Canada, unlike Quebec, cares very little about protecting head offices because it does not believe that doing so is in its national interest. Nevertheless, Canada’s stance is informed by policy difference, not contempt for Quebec’s interests.
It is a welcome albeit incomplete shift.
A new wave of major investments from companies linked to the Chinese government has been a game changer. Canada is starting to realize that it needs to better control foreign investments and make sure that they are in fact beneficial before green-lighting them.
The Bloc Québécois is pleased that this issue has finally surfaced in the context of a study and in the report of the Standing Committee on Industry, Science and Technology.
The report suggests that the government should tighten restrictions on investments from foreign governments and investments that could impact national security; better protect strategic sectors of the economy; better protect intellectual property to ensure that China cannot access our technology; and increase the transparency of the government’s net benefit review process. The Bloc Québécois fully supports all of these proposals.
However, the committee did not take the next step needed to protect our economy, businesses and head offices, namely, lowering the review threshold. Hence this supplementary opinion, in which the Bloc Québécois speaks on behalf of a broad consensus of Quebeckers.
Even if the committee did not adopt our proposal, we hope that it will provide the government with some food for thought. After all, the pandemic has shown us that global supply chains are fragile and that it is unwise to be completely dependent on foreign decision-makers. All the more reason to protect our companies here at home.
I will add a few more points to this presentation of our supplementary opinion, beginning with the importance of ensuring that we can protect our intellectual property. I would like to highlight a few recommendations. One of our proposals in the report reads as follows:
That the Government of Canada protect strategic sectors, including, but not limited to: health, the pharmaceutical industry, agri-food, manufacturing, natural resources, and intangibles related to innovation, intellectual property, data and expertise.
I believe the report forgot to mention the aerospace sector, because I am positive we voted for it.
When the committee discussed it, it was important, and I want to recognize the interventions of Jim Balsillie, whom I just had to name in the House. We know him well for his leadership in the Canadian and Quebec economies. He has appeared numerous times as a witness before the committee, most notably on the importance of being able to protect innovations, intellectual property, data and expertise. That is absolutely essential in a knowledge-based economy.
One of the Bloc Québécois's recommendations is that the Minister of Innovation, Science and Industry justify their decision whether or not a transaction is to Canada's net advantage. We want more transparency, an explanation of the factors leading to this decision and that the minister make public the conditions imposed for the acquisition by foreign investors to ensure that there is follow-up. When the information remains secret, a company can easily ignore the conditions because it is not accountable to the people. The foundation of a democracy is accountability to the people.
For me, the debates we had at the Standing Committee on Industry, Science and Technology about the recommendations to be made centred around the recommendation that the Government of Canada lower the review threshold to 2015 levels, or $300 million in 2000 dollars. Unfortunately, this is not what happened.
I recognize that when the Conservatives amended the Investment Canada Act they were trying to protect Quebec and Canadian businesses from Chinese investments. At the request of the Conservatives, the Liberals sought to make no changes to the Investment Canada Act. It seems that that thinking has not changed much since 2000.
The recommendation that I made concerning the threshold of $300 million in 2000 dollars was not accepted. This threshold would be revised every year, which is surprising. However this provision recognizes that the mechanism, which I wanted to strengthen, already exists. The threshold will be adjusted annually using formulas based on nominal GDP set out in the act and calculated in accordance with the principles set out in sections 3.1, 3.3 and 3.5 of the regulations.
Another part of our argument focused on thresholds, but other parties did not want to protect our businesses unless there was a national security risk. The goal is to protect our economy by displaying strong economic nationalism that enables us to make choices for our economy without opening ourselves up to takeovers by foreign investors.
View Alexis Brunelle-Duceppe Profile
BQ (QC)
Mr. Speaker, I have to send a heartfelt thanks to my colleague from Abitibi—Témiscamingue for his speech. We can see how well he knows the file and how passionate he is about it. It is obvious. I would like him to talk a little more about what is missing from this report.
View Sébastien Lemire Profile
BQ (QC)
Mr. Speaker, I thank my colleague from Lac-Saint-Jean for his intervention.
The Standing Committee on Industry, Science and Technology is currently conducting a study on the green economic recovery. Two weeks ago, Benoit La Salle from SRG Mining appeared as a witness to talk about the critical and precious metals aspect. There is no guarantee that these metals will remain under Quebec or Canadian ownership, because, at this time, it goes to the highest bidder. However, the highest bidder is not necessarily what is best for Quebec and Canada. These metals are is the oil of the future, what oil was in the early 19th and 20th centuries. The modern-day equivalent is precious metals like lithium and graphite.
If we cannot protect our deposits and our companies that acquire these deposits, if we cannot supply our companies, like Lion Electric, which everyone applauds and governments subsidize to ensure growth, if this company cannot procure lithium, then it will all be for naught, because we will not be able to make the investments needed to ensure the growth of our economic development. These are examples that really matter to me.
View Earl Dreeshen Profile
CPC (AB)
Mr. Speaker, the member for Abitibi—Témiscamingue does a great deal of work on our committee, and I certainly appreciate what he has done.
We heard from probably 25 expert witnesses on this issue. He mentioned Mr. Balsillie and the encouragement he was giving everyone to make sure that we understood the importance of intellectual property.
I am curious if the member could describe the frustration he has over the fact that six of the nine recommendations the committee spent a lot of time on and the witnesses spoke to were rejected by the Liberal members on our committee.
View Sébastien Lemire Profile
BQ (QC)
Mr. Speaker, I thank my colleague from Red Deer—Mountain View, who inadvertently gave our committee a somewhat amusing demonstration of how important it is for all Canadians to have a safe and reliable Internet connection at all times. That is the subject of another study that we, including my colleague, conducted at the Standing Committee on Industry, Science and Technology.
I also want to talk about his dedication to agricultural issues. When I talk about having an economy of business owners, about food safety and sovereignty, and about all kinds of issues connected to protecting our economy, the member for Red Deer—Mountain View is there to stand up for farmers. I often hear him doing so.
I want to reiterate that my frustrations about our recommendations are about how important it is for the minister to be accountable. If the Conservatives retake power, or whoever Canadians choose to form government, in the short, medium or long term, I hope they will remember how important it is for the minister to be accountable and transparent. This is essential because we need predictability.
The other aspect is to set thresholds as low as possible so that the government can intervene and protect our businesses from foreign takeovers.
View Brian Masse Profile
NDP (ON)
View Brian Masse Profile
2021-05-10 20:04 [p.7005]
Mr. Speaker, I want to recognize my colleague for how co-operative he is. It has been good to work with him. The industry committee generally has a good reputation for taking a thoughtful and less partisan approach. I want to thank the member for his really solid contribution here. He came really well prepared and that needs to be acknowledged.
I want to ask him a specific question about Rona's takeover of Lowe's, especially given the pandemic and that lumber materials have been increasing in price. What we have now is a loss of competition and supply, and I think that really affects people's quality of life in a different light than ever before.
I would like to ask for the member's reflections on that, because Rona is, of course, a proud Quebec company that exists not only in Quebec, where its foundation is from, but across our country.
View Sébastien Lemire Profile
BQ (QC)
Mr. Speaker, I thank my colleague from Windsor West.
To be honest, I must say he is a mentor to me at the industry committee. I think it is important to mention that. If I am not mistaken, he has been a member of that committee for around 15 years. He always takes a constructive approach as he stands up for the interests of his constituents. I learn a lot from him.
As for the acquisition of Rona, a company founded by Rolland and Napoléon, yes, that has major consequences. The main problem that we have in Abitibi—Témiscamingue is the labour shortage. Why are we unable to attract labour? One of the reasons is that we do not have any more housing. Why do we not have any more housing? Because now it costs too much to build.
The price of materials is staggering. Construction in Canada is stalled because we cannot get our materials. There are many reasons for that. There is the federal government's lack of investment in the forestry industry. We have to ensure we have a significant domestic market in Canada and Quebec. There is also access to suppliers and price negotiations.
How can we help our economy back home? It is not a simple matter of increasing the value of the Canadian dollar only for our materials to become more expensive. Suppliers have to shop locally to build homes and meet the needs—
View Damien Kurek Profile
CPC (AB)
View Damien Kurek Profile
2021-05-10 20:06 [p.7006]
Mr. Speaker, I appreciated hearing the member talk about the importance of safeguarding resources during this COVID time, and would ask, on a bit of an expanded note, if that includes the safe, ethical, environmentally friendly oil that comes from Alberta.
However, more specifically to the debate at hand, we have seen massive disruptions in the supply chains because of COVID-19, which has put a specific stress on many corporate interests across our country. Certainly, the scope of this report and its relevance to the current pandemic is to ensure that there are safeguards so the disruptions that have taken place because of the pandemic do not put Canadian business and industry at risk. I wonder if he could comment further on that.
View Sébastien Lemire Profile
BQ (QC)
Mr. Speaker, I thank my colleague from Battle River—Crowfoot.
I would not go so far as to say that the oil in Alberta is ethical, but that is a debate for another day.
I would like to talk about something that floored me. Members will remember the airplane that departed China and was diverted by the U.S. government. This plane was carrying PPE and medical supplies that hospitals across Quebec and Canada desperately needed. I do not know how much it cost or how the federal government negotiated to try to bring those supplies back to Canada, but this situation goes to show just how vulnerable we are. I also do not know how much the government's vaccine portfolio cost, since Canada and Quebec were unable to manufacture their own vaccines.
Having an economy of business owners and economic nationalism means not being reliant on foreign takeovers or foreign economies. It means not being caught up in bidding wars with other countries and their needs. A mask can cost us four or five times more because demand is very high.
In theory, a G7 country with a strong economy should be able to produce its own equipment. That is what COVID-19 laid bare and what the Investment Canada Act can also demonstrate.
We almost lost our flagship businesses, whether it was Air Transat or Air Canada. When Air Transat was for sale, had the shareholders received an interesting offer from a foreign country that was ready to invest a little more money because the company was vulnerable, we might have lost out. In the end, who would be the losers? That would be the consumers, the citizens of Quebec and Canada.
View Brian Masse Profile
NDP (ON)
View Brian Masse Profile
2021-05-10 20:09 [p.7006]
Mr. Speaker, I am pleased to rise today to talk about this report. It is a very important one. The discussion of the Investment Canada Act has been very lively for many years.
This report is the result of a motion from the member for Calgary Nose Hill, and there was much support to bring it to fruition. I want to thank all the witnesses who came forward to present and also those who made submissions. I also want to thank the staff. Our legislative crew is excellent. The researchers and analysts always did a good job during the process on a very complicated issue. We have a report that is quite extensive, about 50 pages of materials that have been condensed, reflecting some of the concerns that emerged from the sale of Canadian companies, but also the loss of sovereignty, in some respects, in the lost investments.
I will start, though, by discussing something that took place in the debate tonight that related to the parliamentary secretary. It will be interesting to see how the Liberals configure their position out of that. I asked about recommendation 2, which is, “That the Government of Canada introduce legislation to amend the Investment Canada Act so that thresholds are reviewed on an annual basis.” The Parliamentary Secretary to the Prime Minister, if we think it is significant, responded by saying he supported the recommendations of the committee, yet the Liberals put in a dissenting opinion. They could have put in a supplementary opinion, but they put in a dissenting opinion, which said, “Under the ICA, the annual net benefit review thresholds are reviewed and revised by the Minister on an annual basis, rendering the proposed legislative amendments unnecessary.”
Since the parliamentary secretary represents the Prime Minister, I am wondering whether he is having second thoughts to the committee members or to the Minister of Innovation, Science and Industry, who did not address this, or whether the parliamentary secretary is freelancing by himself on this issue. I do not know which it is, but it will be interesting to sort that out because that is the reality of what has been presented to us today.
The reality is that the thresholds have been raised over a number of years and have created quite a concern among Canadians and businesses. They have been raised because of the iconic ones that we have lost, Falconbridge, Inco, a whole series that are name- and brand-recognizable firms. However, what has been presented, and what the previous speaker so eloquently discussed, is that there are smaller firms right now that go under the radar of the threshold and are gobbled up on a regular basis. In fact, there has been an exponential increase.
Part of the discussion we had at committee and part of the report is that, under COVID-19, a lot of vulnerable businesses could be purchased by non-democratic governments. I do not want to speak to just one particular country at the moment, but the reality is that some countries are using their public assets to purchase Canadian companies. With the COVID-19 issue related to the vulnerability of businesses, we have a lot of start-ups and medium-sized businesses that are very vulnerable to this.
This issue goes back quite some time, at least from my perspective. I first raised it at the industry committee with regard to non-democratic governments buying Canadian companies back in 2004. I had discussed it before, but we actually had hearings at that time. There was a headline in The Globe and Mail, “Chinese bid prompts MPs to eye revising investment act”. That was because of Noranda being purchased by China Minmetals.
At that time, I raised the question as to whether it is appropriate to have that type of investment, because it is a non-democratic government. It is not necessarily that it is China, but there are others as well. China decided to go on a purchasing spree after 2000 across the globe, and that included Canada. If we look at the sliding scale of purchases and investments, they are quite significant. That brings up a lot of questions about privacy and control of ownership of different types of assets, and, I would say, it has played itself out in terms of the housing market and speculative approaches that have had significant consequences for Canadians.
I pushed for it, and it came back in Parliament again in 2007. A Toronto Star article said, “Security may be factor in buyout review”. When I pushed for Industry Canada to look at this again, it was about looking at a national security clause in review, which has now been introduced as part of it, because a lot of companies were being purchased that were important to our national security.
This comes from my interest in it representing Windsor, Ontario where the manufacturing centre has been part of our DNA since our establishment as a community and as part of Canada. During the First and Second World War and recently, manufacturing has been part of our heritage. In fact, during the Second World War, we were very much a logistics centre for producing materials to fight fascism.
I have always viewed manufacturing as part of our national structure of defence and also our national importance of connecting people to jobs and meaningfulness and also self-determination. If we did not have that capability, we would not be able to do the things that we do today. Back at that time, it was maybe more raw materials and turning them into things that were used, versus today where there is lack of that vision.
I will always remember and I reference quite often the Prime Minister going to London, Ontario and saying that we actually had to transition out of manufacturing. That was pretty offensive because we do not need to just do rip and ship. One of the tragic things about our oil and gas industry is that we do not have enough refining capacity. I have seen Oakville, for example, lose Petro-Canada. I have seen several other refineries close down as opposed to being invested in, often because of the loss of Canadian control or they no longer became investment opportunities because of a lot of different issues. We lost the capability there.
We have lost some of the capability right now for our forestry industry, as we have a lot of our industry co-owned between Canada and the United States. There does not even have to be collusion, there can just be a disinterest in competing against ourselves and lowering market prices because there is no real interest to do so.
Canada has had some of our natural resources purchased. I mentioned the mining industry to be prioritized because it goes to foreign markets for value-added manufacturing that the Prime Minister wants us to transition out of. That is unfortunate because the value-added economy of manufacturing is important today in this new age for innovation.
When we are looking at solar, wind, alternative energy and also the innovation that is taking place, I often point to what is taking place in Detroit, basically two kilometres from where I am right now. It has billions of dollars going into new electric vehicles and manufacturing there and we do not have the same here. We have some piecemeal and some very important projects taking place that are exciting, but we do not have a national strategy and we do not have the same type of investment taking place. In fact, in Detroit there was over $12 billion of investment in the last number of years and for all of the Canada in the last five or six years, we were at around $6 billion, which is basically not in the game any more with respect to where we should be.
This report did get a response from the minister. There have been some modest improvements to the bill and there has been some strengthening related to national security review, but they did not make some of the bigger changes that we had asked for. I had done some work with Unite, a labour union in British Columbia. It represented a number of companies that had basically been taken over by the Chinese state. I will not get into the full details, but I am going to read this recommendation that has not been implemented:
That the government of Canada immediately introduce legislation amending the Investment Canada Act to allow for the establishment of a privacy protection review of and the ability to enforce Canadians’ privacy and digital rights in any ICA approved acquisition, merger, or investment.
That is the one that I want to talk about. The one that did get pushed through, which I am pleased about, also allows for divestment issues to take place and the minister did move on that. That is important.
I want to pivot because we are looking at some of our privacy laws right now and people need to be aware that we have a Privacy Commissioner in Canada. The United States does not have that; other places do not have privacy. Our privacy laws affect everything from our capability to be involved as a citizen and our own personal life, but also our businesses, and our ability to share information, to work collaboratively and to be connected in terms of mergers and so forth in a more modest way.
We have asked for this to be part of the actual law, because with those expectations we can keep data and information under a review process. I will give a specific example of the Canada census, which I had worked on, to show the vulnerabilities.
It is ironic, because the census is taking place right now, and I encourage everybody to sign up for it. My riding, for a lot of different reasons, has one of the lower rates of compliance, which needs to be improved. Often it is because of language, but there are other reasons as well. However, it is important to fill out the census for government supports and services, and a whole series of things.
At any rate, at the time, our census was actually outsourced to Lockheed Martin. It may sound bizarre to some people that an arms manufacturer would actually get hold of our Canada census, but it did. It had won the contract, and it did that in a number of places. However, because of the Patriot Act, it was going to assemble our data in the United States. It would have allowed all of our census information to be vulnerable to the Patriot Act.
The way the Patriot Act works in the United States is that we would not have control over our data. The U.S. can access that data and then the company that is actually giving it up through the act is not even allowed to report it to us. The act is a fallout from 9/11, when a series of laws were put in place.
The data was going to be moved from Canada, but we fought hard, and we were able to get the data to stay in Canada and actually be processed here, protecting the data from that.
Ironically, Lockheed Martin is no longer doing our census. It was one of those things where we outsourced to be “efficient”, but it turned out to be a loss, because we had to actually pay more money. On top of that, the company is no longer around, and we are back to where we started from, and so that shortcut did not work.
I really believe that there should be a privacy screen as part of takeovers. When we look at the complications that Facebook and other companies have had with some of the privacy breaches, even being held hostage, it is important to note that we are very vulnerable, but we still do not have laws to protect companies.
The University of Calgary had a security breach and actually paid money to have its privacy protected. We do not even have a sense of the entire situation right now, because a number of companies have compromised privacy. They make payouts and different types of restitution, but they do not have to make it public. Some of it does go public but some of it does not; it just depends upon the situation.
When we look at foreign takeovers and the Investment Canada Act, I would point to a few takeovers that have really affected people in their day-to-day lives.
My colleague raised Lowe's and Rona, and I thank him for that, but it is a great example of the consequences, because we have lost competition there. We basically had two competing companies that have been erased off the chessboard, so to speak. Now we are very vulnerable, and there is no motivation to compete. In fact, not only is there less competition, it has made housing more difficult, fixing up our properties more difficult and small businesses are more dependent upon one provider. It has had significant economic consequences.
I opposed that merger and appealed to the government to stop it, but the government refused. I think the parties signed a side agreement to maybe keep their headquarters here and that is about it. However, eventually the stores closed, and I cannot think of a worse situation that we have right now, because we are now dependent upon a one-source provider. We have lost those jobs, but more importantly, the competition.
Another example, which may seem less significant but true, is when Future Shop was taken over by Best Buy. Again, how did that benefit consumers? We lost another competitor, the Canadian franchise company of Future Shop, and for electronics, we are made very vulnerable to being one-source supplied. We have lost that competitive element.
One of the worst examples ever is Zellers being bought out by Target. Here we had Zellers making a profit during a time when chain retail was having difficulty. It had a union, wages just above minimum wage and benefits. Then Target came in, bought up Zellers and promptly shut the stores down in a failed operation. The jobs were lost, the workers lost their benefits, and we lost competition, and for nothing. We had a phony U.S. chain come in here and basically do a social experiment. We lost a significant part of our retail market economy. We have not recovered from that in many respects, because we do not have that type of competition any more.
I think about London, Ontario, where Caterpillar took over Electro-Motive. That was an important one, because those were good manufacturing jobs. That was about union busting and driving out competition.
One of the more iconic ones was when Stelco was taken over by U.S. Steel in Hamilton. We still are feeling the repercussions of that. We lost production capacity, which was an important part of our long-term history of manufacturing steel in the Hamilton region. An exceptional skilled-labour workforce was thrown out because U.S. Steel wanted to wind down operations.
I do not think we are going to continue having the type of situation we are seeing at the moment because of COVID. However, we have a lot of situations with smaller companies. There can be a better way.
I do not want this to be a negative speech because it is about raising awareness. There have been some wonderful cases where we have fought back and we have seen Canadian companies remain. I would point to the Potash Corporation of Saskatchewan. In 2004, the Australian company BHP Billiton was trying to take over the Potash Corporation. We fought that and were successful.
The second example I can think of is MacDonald, Dettwiler and Associates and Canadian space and satellite technology. We were able to prevent some of that takeover, and some of that is Canadian innovation.
I want to touch on something that is often forgotten. When we look at some of the tax on research and development, and incentives such as SR&ED credits and a whole series of others, we have to remember that as we are building up some of these companies, and providing subsidies for them to do research and development, we should have an obligation to stay Canadian and so should they. That is one of the things that we have to recognize. When we are giving incentives, whether they are direct or indirect subsidies, there is an obligation and an investment by the Canadian public. Therefore, if we were going to have a so-called free-market economy, where we get government out of the way, we would not be doing tax credits or subsidies for a whole series of things. We choose them as a democracy and as an innovative society to make advancements. If we do not actually get the fruits of those investments, they do not make any sense at the end of the day.
We have talked a bit about thresholds, but we are not seeing the action that we need to. We have much more work to do on this, and so much awareness is necessary. It is a very complicated file, but there is no doubt that it is sometimes captured in some of the iconic companies in the bigger acquisitions that take place. Let us not forget the small and medium-sized businesses that fly under the radar and under the requirements for review, that we just get notifications that we are losing. That is a poor choice for a country, especially if we are trying to build up our small and medium-sized businesses. We need to protect those assets and develop them better.
I will conclude my speech by again thanking the staff and the analysts for all the work that went behind this report. I know that some have diminished the importance of this debate for different reasons in the House of Commons, but I appreciate it because it has been important. At least we have it on the record, and I know that the House of Commons worked really hard to present issues in front of the government and the minister, as food for thought and also for making a difference.
View Earl Dreeshen Profile
CPC (AB)
Mr. Speaker, I thank the member for Windsor West who is the dean of the industry committee. We always learn a lot by listening to him. I believe at our last meeting, we had Dan McTeague lamenting the lost Liberal legacy as far as industry and business are concerned.
I would like to ask the member if he could comment on the expert testimony that we have seen. Although he did not mention it in his speech, could the member comment on one of the recommendations, and the discussion that we had, where the Liberals felt there was no need to compel the minister to consult with our security agencies during a national security review? In the past, the minister actually did not consult with CSIS or RCMP while doing these reviews. Most experts we heard said the minister does not normally even bother consulting with them.
Is it a good idea to leave it as it is, with so much discretion of the minister?
View Brian Masse Profile
NDP (ON)
View Brian Masse Profile
2021-05-10 20:30 [p.7009]
Mr. Speaker, I have had a chance to serve with my colleague a couple of times at committee and it has always been very positive. I am glad he raised this question. Although I did have it circled at one point, I did not mention it. The recommendation states:
That the Government of Canada immediately introduce legislation amending the Investment Canada Act to compel the Minister to consult with the Canadian Security Intelligence Service, the Royal Canadian Mounted Police, and the Canadian Security Establishment in the national security process.
The member brought up a really good point that this would mandate it and ensure that it would get done, as it has not always been done. He made an excellent point that it is about best practices and good practices, ensuring everything is thorough and consistent. The most important thing about the Investment Canada Act, especially when it comes under the scrutiny and fairness review, is that this consistency should be there. I know he had raised this and had been a champion of it. It has been a missed opportunity, because some of it gets done, but not all of it. It is not consistent. That would bring some solid resolution to even the challenge of a decision under the Investment Canada Act.
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