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.