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Results: 1 - 15 of 26
John Knubley
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John Knubley
2015-02-05 12:26
These amendments were done very much in the context of the 2007 five-year review. I think there was an assessment at that time around the issues of the burden to businesses with respect to PIPEDA.
I think there are five very specific, and I would add limited, amendments in this area to improve and streamline the obligations of business. One is related to business contact information; we're talking here of an email address or a fax address. This would exclude all types of business contact information, provided this information is only being used to communicate with the individual with respect to their employment, business, or profession.
Of business transactions, the most concrete example is mergers and acquisitions, and if two businesses are going through both a merger and an acquisition then it's deemed appropriate to share information without consent.
Christopher Padfield
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Christopher Padfield
2015-02-05 12:28
It's very specific and very common sense. A lot of them come from that second Parliamentary review. Because in PIPEDA consent lies across everything as a principle, there are some very specific circumstances.
I think the business transaction is a great one. When companies are looking to merge, they don't want to have to go through and get consent from every customer on each side of the border, which is the way PIPEDA kind of reads now. You have to go back to each person or client and get their individual consent that you can share their information with the other company when you go through that transaction. It just doesn't make sense.
Christopher Padfield
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Christopher Padfield
2015-02-05 12:28
It simplifies that process. It covers and protects the key people involved because it makes sure that there are contractual obligations. If the transaction doesn't happen, the company that receives information has to destroy the information. It's a very clear, common-sense approach to business transactions.
Even on the data breach side, we've streamlined the approach of data breach to minimize the number of tests and how the reporting is done to make sure that it's only meaningful reporting for Canadians. It minimizes the burden on industry in that reporting system.
Mark Rowlinson
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Mark Rowlinson
2014-11-18 9:04
Thank you very much, Mr. Chair.
My name is Mark Rowlinson. I'm the executive assistant to the Canadian director of the United Steelworkers Union. I'm here to comment on the amendments to the Investment Canada Act found in part 4, division 9 of Bill C-43. The United Steelworkers represents more than 200,000 workers across Canada, including many thousands of employees employed by the former Inco, the former Alcan, and the former steel company of Canada, Stelco.
Under the Investment Canada Act, successive federal governments have allowed foreign investors to take over these iconic Canadian companies and then attack the livelihoods of Canadian employees. Based on these and other experiences, our union has long believed that the Investment Canada Act and its enforcement mechanisms must be strengthened to ensure that foreign investments in Canada are truly beneficial for our members and for all Canadians. Our recent experiences with these corporations add even more urgency to the need to strengthen the Investment Canada Act.
I'll just give you one quick example and that's the example of Stelco and U.S. Steel.
After receiving approval to take over Stelco in 2007, U.S. Steel shut down Canada's largest steel blast furnace in Hamilton in 2010. The company also sought to eliminate its defined benefit pension plan by locking out workers in Hamilton in 2010 and 2011 as well as in Nanticoke, Ontario, in 2009 and again in 2013. The Government of Canada filed a lawsuit against U.S. Steel for breaking its Investment Canada Act commitments but then settled that lawsuit in December of 2011 based on the company promising additional investment in its Canadian facilities. U.S. Steel has since announced the end of steel and coke production in Hamilton. Moreover, on September 16, 2014, just two months ago, U.S. Steel placed its Canadian subsidiary into CCAA protection. It is clear that the company will never live up to its Investment Canada Act commitments and there are now considerable fears in the community of Hamilton that U.S. Steel is going to try to walk away from a pension liability that now exceeds $800 million, leaving thousands and thousands of Canadian workers with substantial cuts to their pension benefits.
Finally, a few days ago 13,000 workers in the telecommunications sector joined our union, employees mostly of Telus and Shaw cable systems. I can tell you that these workers are also very concerned that if foreign companies like Verizon attempt to push their way into the Canadian telecom market, the Investment Canada Act will not provide adequate protections to ensure that such investments provide a net benefit to Canadian workers.
We believe that the Investment Canada Act amendments in Bill C-43 are insufficient to prevent the pattern that we see at Stelco. Bill C-43 would require notification when a foreign investor acquires a Canadian enterprise because that enterprise has defaulted on foreign financing. Requiring such notifications is certainly an improvement over the current state of affairs in which the government does not even know how many Canadian enterprises fall under foreign control in this manner. However, such acquisitions will continue to be exempt from a full review.
The other notable Investment Canada Act amendment in C-43 is to allow the minister to disclose why a proposed takeover was accepted or rejected following a national security review. Again, this provides the same limited transparency for national security reviews as currently exist for net benefit reviews. The minister is allowed, but not required, to provide information to the public. While we accept that the minister may need some discretion for national security reviews, net benefit reviews should, in our submission, be more transparent. The great obstacle to enforcing Investment Canada Act commitments is that they are kept secret. We still do not know precisely what Vale, Rio Tinto, or U.S. Steel promised to the Government of Canada to gain approval for their takeovers. Simply disclosing decisions is insufficient if net benefit reviews continue to be conducted behind closed doors. Surely the best way to determine whether a foreign acquisition will be of net benefit to Canada is to hear from the Canadian employees, suppliers, and communities that will be affected. The review process should be open to the public with opportunities for workers, their organizations, and other stakeholders to comment on proposed takeovers.
In summary, Bill C-43 sheds a small amount of light on two aspects of the Investment Canada Act that are now completely in the dark: foreign acquisitions through the realization of security for loans and national security reviews. But Bill C-43 fails to address the glaring lack of transparency and other significant flaws in the net benefit review process. The United Steelworkers believes that the government can and must do more to make the Investment Canada Act work for Canadian workers.
Thank you and I look forward to your questions.
View Arnold Chan Profile
Lib. (ON)
Thank you, Mr. Chair.
I want to thank the witnesses for summarizing a series of complex issues in such quick time.
My questions are mostly related to the Investment Canada Act, and are particularly for Mr. Wakil.
As you recall, in 2010 the government at the time stopped the takeover of Potash Corporation and committed to making changes to the Investment Canada Act. At that time, the Prime Minister indicated they would provide greater guidance regarding the definition of “net benefit”.
Then in 2012, Minister Paradis announced that Canada would move the threshold from $300 million to $1 billion as the basis for review. The current standard is set at $334 million today.
My question for you, sir, is this. Would it not have been more useful for the investment community if Canada, the Prime Minister, and the Minister of Industry had made these changes through proper study instead of trying to do things on the fly? Do you have any particular comment with respect to this particular instance?
Omar Wakil
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Omar Wakil
2014-11-18 9:23
That is a bit of a loaded question the way you posed it. I'm never going to say that it's inappropriate to carry out a proper study. What I can say to you—our substantive point—is that in practice I think there is sufficient understanding of the net benefit standard to allow us to advise clients on a day-to-day basis. I appreciate that the threshold change from $300 million to $1 billion has not yet been implemented. I think, as a practical matter, that is due to challenges in coming up with some defined terms and regulations that the government and, frankly, the private sector have been struggling with and trying to identify.
Those are certainly issues that need further reflection and consideration, but they're not having a chilling effect in the way that people may believe they could have. What we're saying today is that there ought to be more transparency with respect to national security reviews in the form of aggregated data. We welcome the government's move to increase transparency with respect to the outcome of individual transactions, and we think that's a good and positive step. We think that could be supplemented, however, by more statistical data about the number of national security reviews that have happened to allow us to provide greater guidance to our clients.
We understand that it's early days in the national security review process and that the administrators are going to go through teething issues that have to be worked through, but we do believe that the time has come for that increased transparency and disclosure of data.
View Raymond Côté Profile
NDP (QC)
My sincere thanks to Mr. Warawa for caring about my very esteemed colleague's fate. If he took the hand offered by the opposition, in terms of splitting such a monstrous bill or agreeing to review the opposition's proposed amendments, we could probably very easily speed up the process of passing government bills.
That being said, there is a situation in the riding of Beauport—Limoilou that is a bit similar to the one presented by Mr. Rowlinson. When the White Birch Paper mill in Stadacona was taken over by American Peter Brant, it had 1,600 employees. After a long labour dispute or after a lockout that lasted over two years, it barely has 200 people now.
The lockout took place when the company was placed under the protection of the Companies' Creditors Arrangement Act. Unfortunately, in that dispute, retirees were held hostage and lost most of their pensions. Actually, the company forced a restructuring and a transfer of funds to a new fund under a different form. In addition, Mr. Brant sold White Birch Paper mill to an American investment fund of which he is a shareholder. He sold his own company to himself.
I often find that my government colleagues are a bit naive. It would be touching if the consequences weren't so tragic. The reality is that employees and retirees were harmed. I am constantly in contact with the president of the Stadacona retired workers association. Many retirees have passed away without receiving their due, and even their loved ones will probably not receive the benefits.
The Investment Canada Act is an important act that could have a slightly broader scope. Above all, it could create a climate of trust for all the company's partners. We are talking about the trust of investors, and you were right in saying that investors must be able to trust in order to plan to settle in Canada. However, I would like to check whether you also think that the trust of other members of Canadian society plays just as important a role in helping us build a strong economy.
Mark Rowlinson
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Mark Rowlinson
2014-11-18 9:42
Thank you very much for the question.
That is exactly what we are saying. Indeed, when the legislation has an impact on foreign investment, the government and investors are not the only ones who need to be consulted; the community, workers and retirees also need to have the right to participate in discussions.
Although the agreement between the investor and the government was made public, that does not mean that all the information provided to the government also needs to be released, be it for White Birch Paper or even Rio Tinto.
For instance, when Rio Tinto forced a six-month lockout on our members at the Alma plant in Quebec, just after buying Alcan—another fairly similar situation—it would have been desirable to know what the agreement between the investor and the government entailed.
At the end of the day, if a multinational does not do what it said it would do, there should be a remedy for workers and the community. Multinationals should make investments as agreed. That is what we are calling for. We believe that this is not only in the best interests of the government and investors, but to a greater extent in the best interests of the community as well.
Jenifer Aitken
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Jenifer Aitken
2014-11-06 9:42
Thank you, Mr. Chair.
Hello.
I am the Director General of the Investment Review Division at Industry Canada.
I am here to speak to division 9 which contains amendments to the Investment Canada Act. These changes are found at clauses 186 to 190.
The first amendment in clause 186 removes an exemption from the notification requirements under the Act. It amends paragraph 10(1)(c) of the Investment Canada Act so that foreign investors will be required to file a notification under the act when they acquire a Canadian business through the realization of security on a loan.
This requirement applies where the acquisition is not subject to another federal approval. Other approvals could arise under the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, or the Trust and Loan Companies Act.
Proposed subsection 186(2) provides that part IV of the Investment Canada Act continues not to apply to this type of acquisition. Part IV is the part of the Investment Canada Act that governs reviews of foreign investments on the basis of their likely net benefit to Canada. The effect of these two subclauses, 186(1) and 186(2), is that this type of transaction will now be subject to notification under the act, but will continue to be exempt from net benefit review. This is a long-standing exemption from net benefit review, and is in place so as not to closely affect credit markets.
A notification is a form specified in regulations calling for information about the parties and the transactions. This means that through the administration of the Investment Canada Act, the government will now receive information about transactions in which a foreign investor has granted a loan to a Canadian business, the business has defaulted, and the lender acquires the business by realizing on security. This additional information will contribute to the data about foreign investment that is collected by Industry Canada.
The next amendments are provided under clause 187, which contains amendments to the confidentiality provisions in section 36 of the act. Section 36 contains strict confidentiality provisions with certain exemptions that permit limited disclosure of information, for instance in the context of a net benefit review. These amendments in subsections 187(1) and 187(2) will permit disclosure of the notices that are issued at each stage of the national security review process in the act.
Proposed subsection 187(1) lists the notices that can be sent during a national security review process, and permits disclosure of information in these notices. Proposed subsection 187(2) permits disclosure of the effect of a Governor in Council order at the end of a review. Subsection 187(3) provides for protection of information in a Governor in Council order if the disclosure of information would prejudice the investor or the Canadian business.
The effect of these amendments will be to provide discretion for more information to be disclosed about the process of national security reviews, while continuing to protect confidentiality of investors' information or national security information. For example, the government will be able to disclose that a notice has been sent to an investor that an order for review may be made, that no order has been made, or a notice that an order for review has been made, or that an order has been made after a review. These provisions create a discretion, but not an obligation, to make such information public.
Finally, there are some amendments to the Economic Action Plan 2013 Act. These amendments provide authority for amendments to the regulations under the Investment Canada Act to allow flexibility to extend timelines for national security reviews under the act. One of these amendments is being repealed, but the others will remain in place and will be used when the regulations are amended. This is a housekeeping change that is required for the national security review regulations. The authorities remain in the act and the Economic Action Plan 2013 Act, to provide for extensions to the national security review process time periods that were announced in 2013. These will provide the government with additional flexibility in the time taken to conduct careful and thorough national security reviews.
Thank you.
View Ted Falk Profile
CPC (MB)
View Ted Falk Profile
2014-11-06 10:19
Thank you, Mr. Chairman.
Ms. Aitken, I'd like to start with you.
We are providing amendments to the Investment Canada Act that will put more teeth into the act and strengthen it. Can you tell me how big a problem is caused by Canadian companies having foreign financing, defaulting on it, and then surrendering their ownership or shares to the control of the foreign entity? Is that a big problem?
Jenifer Aitken
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Jenifer Aitken
2014-11-06 10:19
Right now there's no notification for it under the act. These changes would provide for a notification and then we would start to get information and have a sense of the scope of those transactions. We know that is a manner in which a Canadian business can be acquired. I can't say exactly how many of those transactions there are now but once we start collecting that data, we will have more information.
Alexandre Lavoie
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Alexandre Lavoie
2014-10-07 13:17
The motion asks the government to apologize to the people of Hamilton for approving U.S. Steel's takeover of Stelco in 2007, make public the commitments of U.S. Steel made under the Investment Canada Act, and guarantee the pension benefits of the company's 1,500 employees and pensioners if it goes bankrupt.
The motion does not concern a question that is outside federal jurisdiction. It does not clearly violate the Constitution Act. It does not concern a question that is substantially the same as one already voted on by the House of Commons. It does not concern a question that is currently on the order paper or notice paper as an item of government business.
View Andrew Saxton Profile
CPC (BC)
Terrific. Thank you.
My next question is for Gregory Thomas.
Gregory, welcome.
Would it be your assessment that the amalgamation of government bodies such as ACOA and ECBC is an effective way of providing government services while respecting taxpayer dollars?
Gregory Thomas
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Gregory Thomas
2014-05-15 17:53
We certainly wholeheartedly support these reforms as well as the administrative tribunals and the administrative tribunal support services.
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