44th Parl. 1st Sess.
February 3, 2023 10:00AM
Madam Speaker, I know that the government has put in these policies and made some of these amendments here, but these are only as good as the minister's own scrutiny of transactions. In 2019, this minister's predecessor approved the sale of the Tanco mine in Manitoba to a Chinese mining business. That mining business now controls the only lithium-producing mine in Canada and the mine that produces most of the world's cesium. The minister did not ask them to divest, but he asked three others.
Why would he not implement a divestment of that particular investment, if he cares so much about state-owned enterprise interference?
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Madam Speaker, I appreciate my hon. colleague a lot and I think we can work together in making sure that this bill would better protect Canada.
When we make decisions in matters of national security, I think it would be comforting to the members and the public that is with us today that these decisions are made on the basis of advice from our intelligence agencies and experts. Obviously, my role as Minister of Industry, as well as the role of my colleague, the Minister of Public Safety, is to make sure that we act on the basis of intelligence that we receive.
I would remind my colleague, and he will know very well, because he knows me quite well, that I never hesitate to take action. I blocked three transactions recently, where Chinese companies were trying to take equity interests in mining companies in Canada.
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Madam Speaker, I want to commend the minister for his leadership. I say that because this was a request that the Bloc Québécois made in a supplementary report for the Standing Committee on Industry and Technology, which looked at the Investment Canada Act. It is nice to see that the government wants to better protect our businesses.
However, in my opinion, national security goes hand in hand with economic security. It is important to protect our head offices, particularly in Quebec. The Quebec economy depends on SMEs and the Investment Canada Act sometimes becomes a weakness or an obstacle for the province. The threshold issue could have been addressed in Bill C-34, but obviously the minister decided not to go that route.
How can we ensure that our head offices are properly protected? How can we do a better job of that? Do we need to think about investment thresholds, particularly if we are on the verge of a recession?
In the context of COVID-19, we saw how an airline company can be devalued very quickly. Would the ability to rely on clear thresholds have been of net benefit to Canada?
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Madam Speaker, I will first thank my colleague, for whom I have a great deal of respect. He works with us on industry files.
Members will recall that Bill C‑34 concerns the part relating to national security. We know that the Investment Canada Act has two parts. The amendments we are proposing are actually amendments pertaining to national security.
As a Quebecker and as someone who is in close contact with SMEs across the country, I understand my colleague's point quite well. As a government, we must certainly do everything we can to keep head offices in Canada. We also have to attract more head offices.
I believe that my colleague will recognize that, with respect to batteries for example, we are creating a new industry in Canada, an industry that did not previously exist. We have attracted significant investments. As I was saying in my speech, Bloomberg ranked Canada second in the world for its battery ecosystem. We will continue to stand up for the interests of Canadian businesses.
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Madam Speaker, I am pleased to stand here today and talk about this bill. New Democrats, on this file, go back to 2003, with China Minmetals and state-sponsored takeovers of Canada's oil fields, where nobody really wanted to intervene at that time. Each year, there are thousands of files that are never even reviewed going through the lens.
I thank the minister for bringing this forward. My question goes to the point regarding the investments that we have had in the past, and some were not looked at, like smaller SMEs as noted beforehand, but also other industries. We have seen in the past that in this House we have had to fight to save Canada's potash industry with regard to MacDonald Dettwiler and others.
With the smaller SMEs and some of the innovation that is taking place, how can we, in Parliament, give this to a minister to decide if they are going to include the public safety minister? Where is the lens for the rest of Parliament in this legislation?
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Madam Speaker, my colleague and I have worked together for a number of years now.
We need agility. My colleague is very knowledgeable and he knows that we live in a world where a number of companies are trying to use different schemes to go around the law so they will not be subject to a national security review.
What we want is additional powers for the minister to make sure that we better protect our national security. This bill would achieve what the member just said: having more agility, for example, to make sure that, during the review, we protect intellectual property. Today, there is not even, in the law, a possibility for the minister to prevent the exchange of information while we do the review. When it comes to intangible assets, irreparable harm can be done.
I hope the member will support this bill, because we need more agility.
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Madam Speaker, the minister spoke about the importance of innovation. While my question is not directly about the bill, it is related and I hope it is allowed.
One area where we need innovation is in telecommunications. The prices are going up for people in my community and across the country because of reduced competition. The minister will soon be making a decision about a proposed merger between Rogers and Shaw. We both know this merger is not innovative. Innovation would be giving consideration to what the Province of Saskatchewan has already done, building a national, publicly owned telecommunications network.
Will the minister give this idea consideration in lieu of allowing even less competition in the telecommunications industry?
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Madam Speaker, my colleague and I work very well together. I am happy to talk about telecoms this morning. I think the member and Canadians watching at home know that the principle I have applied since I became Minister of Innovation, Science and Industry is to make sure that we reduce prices for Canadians. The way to do that in Canada is to have more competition and at the same time to have innovation. We want a fourth national player because we have found that in our market this is the best way to make sure we bring prices down for Canadians.
Going back to Bill C-34, I hope the member supports it, because what the bill is asking for is to get to the modern economy. A colleague like him who understands so much about innovation will understand that a lot of it is about intangible assets. This law would give better tools, not only for me but for future ministers who will have to protect Canada's national security.
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Madam Speaker, today is a significant day in regard to what is taking place with NASDAQ. When we look at all the economic indicators, Canada is doing relatively well. A lot of innovation is coming to our country.
There was something very significant that occurred today and I would like to hear the minister talk about that historical event.
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Madam Speaker, that is one of the best questions I have heard in a long time. I am delighted.
The credit goes to all the men and women employees of OpenText. It is thanks to their talent, expertise and know-how that today we can celebrate a moment in Canada's history. For the first time in our nation's history, the NASDAQ bell was rung out of Canada. We did that here in Ottawa. We should all be proud because OpenText is becoming one of the largest software companies in the world. It just made a recent acquisition. There were hundreds of employees and the vice-chairman of NASDAQ. We were live in Times Square. It is not very often that we see Canada live in Times Square to celebrate the talent and expertise of our people.
It is a lot like Bill C-34, which would protect the IP, the intellectual assets and the know-how we have in this country. I think all members should be really proud. If they are looking for something to do today, they can give a phone call to one of the employees of OpenText to thank them for their good work so we could all celebrate as Canadians.
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Madam Speaker, the minister told me he is going to Washington next week. I know there is a Chinese surveillance balloon going over the U.S., and I understand the government has withdrawn its terrible firearm amendments to Bill C-21. When the minister is there, if he spots it, maybe he could do something about it with an appropriate firearm.
After eight years, the government is finally getting around to making some administrative changes to the Investment Canada Act. Why is this important? Because foreign direct investment is increasing and causing us great problems in Canada.
I would start off by informing the House that, while we think these amendments are inadequate to deal with the things that are happening, we will be voting in favour, in principle, at second reading of this bill. These amendments improve the bill, just not enough. However, we will be seeking considerable amendments to improve this bill at the committee stage.
The minister went through some of the things the bill does, and I will start by commenting on a few of them. I think the preimplementation filing change required in certain industries when a deal is done, that the filing and notification go to Investment Canada, is good. It should happen after closing. I would have hoped the minister would make all investment applications subject to prefiling. I do not know what the point is of looking at a foreign direct investment after it is closed; it is very difficult to unwind a transaction.
The minister spoke about the streamlining of the process to speed it up within the 45 days. We have some concerns about removing cabinet from that process, not necessarily up front, because I think that process to start it is an important one. However, when the review comes back from officials, either for or against it having a national security or net benefit issue, we believe that should go to cabinet in all cases. I know the experience during the Harper government was that when these things came back to cabinet, there was robust discussion on every one, and this resulted in a better decision, Therefore, we think that the power to actually decide that at the end of the day should still rest with cabinet.
It does add the ability for the minister to create a list of targeted industries through regulation. We would like to learn a little more about what industries the minister is going to address. I think there are industries outside of the list. These include, to be parochial in my neck of the woods, seafood and other areas that are being targeted in the food sector by state-owned enterprises from less co-operative countries.
The interim conditions and all of that in the bill are a good addition to the bill.
We want to explore the area of the legal process appeal issues around secrecy for national security or commercial reasons a bit more at committee. We just want to make sure we understand that, in the future, we are not going to be blocking information the public should have. I think there are some transparency provisions in this bill that say if the minister rejects an acquisition, the reasons for this have to be fairly transparent and public. I do not believe there is a requirement to do that now.
However, there are some things we do not believe the provisions address. Let us start with the record of the current government regarding China's takeover of many of our important assets. The other thing the bill does not do, and I will talk about this in a few minutes, is deal with the sale not just of companies, but of the assets of companies.
In 2017, there was, and still is, a company called Norsat out of British Columbia, which also owns a company called Sinclair in Toronto. It was acquired by Hytera in China, which is partially owned by the Government of China, in the critical telecommunications business. Even though he was urged many times in the House, the minister of industry of the day refused to do a national security review of that acquisition. The minister has the freedom to say that he does not think it is a problem and he is not going to do it. Therefore, no national security review was done of that acquisition.
That is a problem because now we come to January 2022, when Hytera was charged with 21 counts of espionage in the United States in and then banned from doing business in the United States by President Biden. Yet eight months later, the RCMP bought radio frequency equipment to go into the communications system, giving the Chinese state-owned subsidiaries access to all the locations of the RCMP communications services. There was no public security review of that. These are the things that still fall through the cracks.
As I mentioned earlier, Manitoba-based lithium mining company, Tantalum Mining Corp., known as Tanco, was purchased in 2019. Again, the previous minister, not this one, refused to do a national security review of that acquisition. When this minister asked three Chinese state-owned enterprises to divest their Canadian critical mining assets, he did not even include this one, yet it is the largest producer of lithium and cesium in Canada, and all of it goes to China.
In 2020, we all know, the Department of Foreign Affairs bought X-ray equipment from a Chinese state-owned enterprise to go in all the embassies. I believe this minister may have been the minister at that time. No, he was not, but it was a Liberal minister, obviously, who said it was okay and did not back off on it until it was raised in this House.
In March 2021, as the minister referenced, the minister updated and enhanced the guidelines for national security reviews in the absence of an updated act, although an update could have been done. In January the minister did not even follow his own guidelines when he had a divestiture order that included neither the Neo Lithium Corp. nor the Tanco Corp.
In December, I mentioned Hytera and the Canada Border Services Agency. Of course this week we learned, although it is not an acquisition, that the scientific arm of the army of the People's Republic of China is doing research on artificial intelligence and supercomputing in our universities, our 10 biggest universities. They own the IP from that, and it is partially funded by Canadian taxpayers.
These are the things the bill does not address. It is a shameful situation that we are actually helping the largest surveillance state in the world, which used that technology not only on its own citizens but also to repress the Uighurs, and we actually helped develop that technology. Of course we know it uses that technology here. In 2017, China passed a national security act, and clauses 7 and 10 of that act require all citizens and all companies to spy on companies and people in the world. It is against the law for a company based in China to not spy and steal technology and information from companies abroad. We have allowed these takeovers to happen in the last eight years under the Liberal government.
There are several areas that we need to talk about for additional improvement. There was a really good House of Commons industry committee report, which our leader was the vice-chair of in the last Parliament. Most of the recommendations have been ignored by the Liberal government, even though government members put the recommendations forward. Not only is the Liberal government ignoring the recommendations that the official opposition put forward, but it is also ignoring the recommendations for improvement to the Investment Canada Act put forward by its own members of Parliament.
Recommendation number one in that report dealt with state-owned enterprises. What it asked for was that state-owned enterprises for all countries that we deem to be authoritarian or hostile to Canada have an automatic review. The way that is done is by reducing the financial threshold for the automatic review. Right now, that is $415 million. A state-owned enterprise can come in and buy anything it wants in Canada for under $415 million, as my friend from the NDP referenced in his question to the minister, without any scrutiny by the government.
Even in my own community, four fish-buying businesses were bought by Chinese state-owned enterprises on the south shore of Nova Scotia in the last quarter. That is important because those businesses set the price of what they get from fishermen. They set what the fishermen get. Through that process and through China's buying two international freight corridors, China now controls all lobster and the access to the departure of lobster from the Halifax airport. None of those transactions would be reviewable under this act. As a result, my lobster buyers would not truck their lobster to the Halifax airport, because China has taken it up. Rather, they would have to truck it to New York and Chicago to get our lobster to Asia. That is just a small part.
We know the Chinese enterprises are buying farms. They are buying up all kinds of key assets in this country, and none of that gets reviewed. Therefore, we would encourage and would be seeking amendments to this bill in committee to move that threshold for state-owned enterprises to zero in the act, requiring the minister and the department to follow that.
The government did not include any provisions that I can see in the net benefit for that issue of state-owned enterprises in foreign countries actually getting control of industries, let alone a particular asset. We are not looking at the concentration control, particularly of hostile actors going after that strategically. I know there is a provision in the bill that would allow the minister to create a list of targeted industries. We are a little skeptical that the list would be as comprehensive as it needs to be and would reflect a zero-dollar review, given the record of the current government over the last eight years. It has not even sought national security reviews of state-owned enterprises from China when it had the authority to do so on those acquisitions.
The bill does not include a provision to actually list countries. Other countries have looked at that. In addition to selected industries, the minister should have the authority, through regulation, to have a list of state actors and countries that we do not believe are advantageous for our economy or are actually a threat to our economy if they continue to try to buy not only our companies but the companies' assets. I will come to this in a minute.
The bill would change the process, which I referred to earlier, of the involvement of cabinet. We would like to probe this a little more in committee, but I understand the need. The 45 days has not changed in the Investment Canada Act and there is obviously a need for speed. Therefore, the point that the minister has put forward here, which is that at the beginning of the process, the minister and Minister of Public Safety can determine when that goes in without having to go to cabinet, and this would speed up the process. We believe that is a reasonable thing, but we would want to explore that a little more in committee. However, it is on the other end that we have the problem because perhaps not all ministers of industry are as diligent as this one.
I do know, in the short time I have been working with the minister, that he is the most accessible minister I have had a chance to work with since I have been in the House, and he is co-operative. I know he understands and is concerned about what the opposition members think in terms of looking at amendments to the bills, and he takes our suggestions seriously. We want to look at this issue wherein a minister who was perhaps not as diligent would be less involved in making the right decision when it is determined to be a net benefit, or not, or when the research comes back and says it is a national security interest, or not. Whatever the recommendation from officials, we believe it should always go back to cabinet for discussion before the final decision is made.
The act does not attempt to change definitions of state-owned enterprises or look at the issue of what constitutes control.
One does not have to buy 50% of a company to control a company. Someone can buy small percentages of it, get a number of seats on the board or change management, which Hytera has done. It has changed management in Sinclair and Norsat. None of those things are really looked at very strongly in Bill C-34 and need a little more consideration.
One of the interesting things brought up by the industry committee at the time of that report, and I think my friend from the NDP was on the committee, was the issue of subsequent takeovers. A Canadian company may be acquired by a company or an industry that we think is okay, and it gets approved as it is not from a state-owned enterprise. Subsequently, though, down the road, that company can be bought by a state-owned enterprise. There is no provision in this bill to give the minister the power, when that happens, to automatically relook at whether, in that transaction, we should be forcing the divestiture of that Canadian asset from that future transaction of a state-owned enterprise down the road.
That is very important, because Russia and China are getting more aggressive at doing these things. They come in through the front door but also through the back door, and we need to be very vigilant about that.
The minister mentioned intangible assets. This is a big area. In 2009 it was not so much part of the economy, but it is big now. One of the ways our economy can be harmed is not just through the purchase of a company, but through the purchase or sale of some of its assets. It could be simply that it is not just the taking over one of our mining companies, but that one of our mining companies is selling a strategic mining asset, like a particular mine, to a state player we are not comfortable with. It could be that a database gets sold. It could be that a particular artificial intelligence or knowledge-based patent we have and own in Canada gets sold. That company may still remain Canadian, but more and more companies are looking, when they develop these things, at those assets.
Probably the worst example in Canada is Nortel. When Nortel went into bankruptcy, it had the most patents, I believe, of any technology- and knowledge-based company in Canada. The Canadian liquidator's responsibility was to maximize whatever it could get for the assets. China quite regularly goes in and pays four, five or six times what a business is worth. That is what it did in my riding last quarter. It paid five times what the business was worth. It paid $10 million for $2-million-valued businesses, which is way below the threshold.
It took advantage of the Nortel situation, and almost all of those patents were sold by the liquidator to a Chinese state-owned enterprise that became Huawei, which is banned now in the United States. It took the government only five years to figure that one out. We helped create Huawei through our weak rules around foreign investment in state-owned enterprises in assets, and not just the companies, so we need to have more study and understanding. We can look at those in committee, and I know the minister is taking this seriously. I see him nodding there, so hopefully we can work with the government to improve Bill C-34.
Nonetheless, the bill is an improvement over the existing act and would give the minister and the industry some much-needed clarification. Therefore, for the most part, at this stage, we will be supporting this, but we will be seeking many more amendments in committee. I look forward to hearing from the very experienced member, the shadow minister for industry from the NDP, who has been in the House for a long time and has been on the industry committee for a long time, to see what he proposes, in terms of his speech but also his work in the House.
I will conclude there, and I look forward to the debate by all members in the House on this bill, which is very important for Canadians.
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Madam Speaker, as I was listening to the hon. member very carefully, I think he gave all the reasons we need to modernize the law on investment in Canada. A number of examples he mentioned would be addressed by this revamping of a law that was crafted in 2009, the last time we did that. I think I like it, because in a way he listed all the reasons we should be doing that. By providing more agility to the minister, we would be able to answer these questions.
Canadians are watching because it is Friday morning. Will the member and his party support our bill to protect the national security of Canadians? Will he support the bill?
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Madam Speaker, I think I made it fairly clear that we will be voting for Bill C-34 at second reading. We want to see a number of improvements in the bill.
We are disappointed it has taken eight years to get this bill to Parliament and that a lot of the decisions the government made and let go in the acquisition of many of our assets by Chinese state-owned enterprises probably would not have happened if the amendments Conservatives seek in this bill were in place and had been in place earlier on in the government's tenure. There would not have been the flexibility of previous industry ministers under the Liberal government to ignore the public security threat.
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Madam Speaker, I applaud the minister and my colleagues.
At the end of last year, we learned that the RCMP had allowed Sinclair Technologies, a company with ties to communist China, access to its security systems. We then were witness to a failure of regular surveillance mechanisms and a failure by the government to try to control access to our technologies by this company controlled in part by China. It took a long time before the government finally decided to end this contract.
My colleague is more familiar with Bill C‑34 than I am. With the new amendments to the Canada Investment Act, is Sinclair Technologies the type of company the minister, who is not listening to us right now, should pay particular attention to?
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Madam Speaker, it is an important question, and I will answer it this way. There is a first stage to preventing what happened.
By the way, as the Minister of Public Safety said in committee this week, just because a piece of RCMP equipment is not connected in the data links of the RCMP communications, all the people who service it get access to all the RCMP locations of their equipment, can understand what the RCMP communications structure is and provide that intelligence back to China, as required under Chinese law.
The issue would have been stopped if there had been a national security review. This bill would do nothing on procurement. It would not have any ability to stop the RCMP and Canada Border Services from acquiring technologies from China.
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Madam Speaker, I appreciate the work that is done alongside the member in the fisheries committee.
We know that one of the big components of Bill C-34 is to promote economic security and combat foreign interference by modernizing the Investment Canada Act to strengthen the national security review process and to better mitigate economic security threats arising from foreign investment. When I think about threats to foreign investment, I immediately, as a fellow fisheries committee member, think of the threats to foreign investment in our fishing industry.
I am wondering if the member can share his thoughts on how this relates to, as just one example, Royal Greenland's takeover of processing plants in Newfoundland, and if it does not relate to that, what we need to do to move forward.
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Madam Speaker, I really enjoy sitting on the fisheries committee with the member for Nanaimo—Ladysmith. She brings a lot of good value to that committee, as does the member for Cape Breton—Canso.
That is an important question because this is below the threshold. The fisheries industry, which is a strategic food industry for Canada, is not, in any of the lists I have heard from the minister, generally listed as an industry that should be protected. Our food industry is below the threshold for review because these acquisitions are smaller companies that are way below the review, whether it is from China or the United States.
We are seeing more and more on the B.C. coast that many of the fisheries licences are owned by Chinese state-owned enterprises, and on the east coast we are seeing the processing side of things and the fish-buying things in Newfoundland and Nova Scotia being acquired by countries from all over the world, but primarily China.
I understand there is nothing in this bill that would stop those types of things coming. I would like to explore this a little more in committee. Perhaps the only thing would be, at this stage, if the minister put fisheries as part of the food strategic investments on his list.
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- Feb/3/23 10:59:39 a.m.
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Madam Speaker, I rise to honour the late Hon. David C. Onley, the 28th lieutenant governor of Ontario, an iconic Canadian broadcaster, educator and disability rights advocate, and a long-time resident of Scarborough and Rouge Park. Onley contracted polio when he was just three, leaving him to use a motorized scooter throughout his life.
One of Onley's greatest wishes was for all people with disabilities to have the opportunity to fully participate in every aspect of society. He became Canada's first news anchor with a visible disability. In 2007, he became the lieutenant governor of Ontario and used his position to remove physical barriers to Ontario's 1.5 million people with disabilities. After leaving office, Onley continued to inspire and advocate for people with disabilities, namely as a senior lecturer at the University of Toronto's Scarborough campus, where he talked and inspired a new generation of advocates, including several of my current and former staff.
I give my deepest condolences to his wife, Ruth Ann, and his sons, Jonathan, Robert and Michael. May he rest in peace.
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- Feb/3/23 11:00:50 a.m.
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Madam Speaker, we often hear things like “one person cannot make a difference”, but today I would like to share a story about someone who proves otherwise.
Yvonne Hazeldean, an immigrant to Canada who ran analytical labs by day and raced cars by night, is a trailblazer who is quietly one of the most influential women in Calgary. Yvonne's persistence has elected dozens of candidates, and then that same persistence has held them all to task when it comes to doing what they said they would do. Yvonne's legacy proves that one woman can change the world. I know that I would not be standing here without her support. When I speak in this place, I often catch myself using mannerisms and the passion that she exudes.
Recently, she has experienced some very severe health challenges, so now it is my turn to lift her up, as she has done so many times for me and my team. On behalf of the entire Calgary community, we love Yvonne. She proved that one woman can change the world.
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- Feb/3/23 11:01:56 a.m.
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Madam Speaker, the long-term care standards were released this week. We will have many opportunities to discuss this document. We must, however, hold fast to the unwavering belief that every senior deserves the right to live in dignity, safety and comfort, regardless of which province or territory they call home.
I am pleased that this government has made the largest investment in home and community care in Canada's history, an unprecedented $6 billion. As chair of the national Liberal seniors' caucus, I ask that all governments work together to recognize that the unique and often diverse needs of aging persons is a critical pillar of all health care programs and decisions. This is our moment to place partisan politics aside and work collaboratively to support aging Canadians.
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