44th Parl. 1st Sess.
February 8, 2023 02:00PM
Madam Speaker, Bill C-34, an act to amend the Investment Canada Act, has good intentions. It seeks to improve controls and give the Minister of Innovation, Science and Industry more authority over foreign investments in Canada. The Bloc Québécois fully supports this commitment to better protecting the economy of Quebec and Canada from foreign interests that may be harmful to us.
The new review process is essentially the same as the one used in the United States. Adopting it increases the chances that the U.S. will continue to see us as a reliable partner. That is a condition for being a preferred supplier that is well integrated into their supply chains. At a time when protectionism is on the rise among our neighbours to the south, a trend that could seriously disrupt our economy, that is an important asset, and the Bloc Québécois applauds it.
Bill C‑34 is in addition to the new critical minerals guidelines that the government adopted in October 2022, and that apply to 31 minerals that are critical for the long-term economic prosperity of Canada and its allies. Bill C‑34 and Canada's new critical minerals strategy should help stop Chinese companies, among others, from taking over our resources.
All these developments are positive, but they are only half-measures. That is why the Bloc Québécois is asking the government to go much further in controlling foreign investments in general. The bill under consideration is limited to investments affecting national security. This category of investment is extremely sensitive, so focusing on it is justified. However, it represents only a small fraction of all foreign investments made in Canada. It is clear that the safety net provided for in the new system created by these proposed amendments to the Investment Canada Act is inadequate.
Here are some figures. Of the 1,255 investment projects filed last year, under the new rules being proposed in Bill C‑34, only 24 would be subject to review. Clearly, this is like a grain of sand on a beach. This bill would affect only 2% of all investment projects filed last year. The other 1,221 projects from last year would remain subject to the new rules. Those rules provide for a review to determine whether a project will truly provide a net economic benefit to Canada.
There are six criteria then used to assess whether a transaction is beneficial. That said, I would draw the attention of my colleagues to the fact that a review is only triggered when a project exceeds a certain monetary threshold, as my colleague from Pierre-Boucher—Les Patriotes—Verchères explained.
That is where the problem lies. Over the years, the threshold at which the government must assess whether an investment is economically beneficial has been significantly increased. It has more than tripled in the last 10 years. At the same time, the number of investment projects is increasing every year, and that must be taken into consideration.
The consequence of this aberration is that virtually all projects are rubber-stamped without additional review. Last year, of the 1,255 projects submitted, only eight were subject to a review under the Investment Canada Act. That is less than 1%.
The member for Winnipeg North says that the law is being amended, so it must be good. The Liberals have created a bill that does not affect even 1% of the projects. That is not very ambitious. It reminds me of yesterday's smoke show on health transfers.
The review rate was 10% as recently as about 10 years ago, in 2009. In reality, this measure has become essentially ineffective over time. It might as well not exist; it would not make much difference. The situation is such that foreign investments are rubber-stamped without analysis, save for exceptional cases. Understandably, less than 1% certainly qualifies as exceptional.
Everyone knows how much I love history, how passionate I am about it, and I believe that building our future depends on having a good understanding of the past so we can learn from our successes and avoid repeating mistakes. I would like to share some snippets of history to illustrate why we need to do more to control foreign investment.
Since the Quiet Revolution, the Government of Quebec has established some important economic and financial levers. These tools enable it to pursue a policy of economic nationalism designed to give Quebeckers more control over their economy. That does not mean Quebec is not open to foreign investment. We are open to it because it can drive growth and development. However, we believe the priority is supporting our own businesses to help them grow so we can protect the significant decision-making power of our own corporate headquarters.
In 1988, former Parti Québécois premier Bernard Landry lobbied for the North American Free Trade Agreement, better known as NAFTA, which was signed with the U.S. and Mexico in the early 1990s. Quebec's strategy worked. Quebec's decision to invest in its businesses paid off, and many flagship companies headquartered on Quebec soil grew.
As the figures show, the presence of head offices is important. There are currently close to 578 head offices in Quebec. This represents approximately 50,000 jobs that pay twice as much as the Quebec average. On top of that, head offices provide nearly 20,000 other jobs for specialized suppliers such as accounting, legal, financial and computer firms, and so on. Structurally, companies headquartered in Quebec also tend to favour procurement from local suppliers, which creates a positive economic circle. Finally, companies tend to concentrate their strategic activities, such as scientific research and technological development, where their head office is located.
As the Bloc Québécois science and innovation critic, I have to emphasize how important this characteristic is, since Canada ranks last in the G7 when it comes to corporate investments in research and development. This statistic can probably be traced to the fact that the Canadian economy has always been recognized as a subsidiary economy. One might think of the automotive sector, with Ford Canada and GM Canada, or the oil sector, with the Shell Canadas and the Imperial Oils of the world.
There is no shortage of examples of the harmful effects that ill-advised foreign investments can have on our economy and even our prosperity. Here are just a few.
First, there is the loss of decision-making powers and head offices, which condemns us to being a subsidiary economy, where foreigners decide for us. Second, there is the weakening of Montreal's financial sector as a global finance hub. Third, there is the total dependence of our businesses on foreign suppliers and supply chains that are more fragile than ever. We saw that during difficult times, such as the COVID‑19 pandemic. Fourth, there is the possible land grab by rich foreigners who do not care about our social and economic priorities. That is a concrete example. Fifth, there is the loss of control over our natural resources, which are our country's greatest asset.
By focusing exclusively on national security, Bill C‑34 does not address Quebeckers' and Canadians' gradual loss of control over their own economy. I want to reiterate that we invite the government to amend its bill to make it much more bold and ambitious and to modernize the entire Investment Canada Act and not just the part on national security.
As always, the Bloc Québécois strives to be a constructive partner, and as such it is recommending three types of amendments. The first is to lower the review threshold to prevent most foreign investments from being approved without review. The second is to pay special attention to strategic sectors of the economy. The third is to develop a tighter process for transactions involving control over intellectual property patents.
I hope the government will listen to our practical proposals and modernize this bill.
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Madam Speaker, I thank my colleague from Winnipeg North for that good question. I like these concise questions that are on topic and are neither provocative nor arrogant.
To answer my colleague's question, there are indeed several sectors. I am thinking about the biopharmaceutical sector in particular.
In the early 2000s, there were a lot of pharmaceutical companies in Canada, primarily in Quebec. They are all gone now because of the underinvestment in research and development and the underinvestment in programs to develop them.
I think that we need to focus on our own expertise and protect what we have. We are in a globalized economy, and competition is fierce. I encourage my colleague from Winnipeg North to realize that Canada is the only G7 country that cut its investments in research and development. That is too bad. As I said, Canada is the only G7 country that is still unable to stimulate the private enterprise economy.
There is a parallel to be drawn. As I explained very clearly in my speech, when we have fewer head offices, we have fewer means of intervention. This creates jobs in parallel, including with partners in nearby supply chains. Understand this: If we allow others to make decisions for us, people overseas will not take us into consideration as much.
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Madam Speaker, this is a very interesting subject. We have to avoid the intellectual shortcuts that people sometimes take in the House.
I sure appreciate the opportunity my colleague gave me. My colleague from Pierre-Boucher—Les Patriotes—Verchères gave us a very good example. Rona was purchased by foreign interests, a company called Lowe's, not to name names. It was then resold for a pittance. The company the government had invested in was originally valued at over $3 billion, but it was sold for $400 million.
Our constituents are watching us. They placed their trust in us, and they want us to manage their investment with great care. In this case, it was a total failure.
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Madam Speaker, I thank my colleague for her question. I touched on this subject briefly in my speech. People with foreign interests or economic interests coming to invest here do not always have our social investments at heart.
She mentioned seniors' homes. I fully agree that we need to pay close attention in modernizing the bill, and we must consider that the interests of foreign investors will not always align with ours.
She makes an interesting point. I gave the example of land grabs. Everyone here needs to eat, just like the general population. It is the same thing. The Bloc Québécois will certainly be able to work with my colleague.
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Madam Speaker, I want to acknowledge my colleague, the member for Halifax, who is also the Parliamentary Secretary to the Minister of Innovation, Science and Industry. It is all well and good to use figures that suit the government. We are used to that with the Liberal government.
My colleague mentioned that Canada is ranked second among G20 countries for foreign investment. That is excellent. We attract companies, but we do not invest. Canada is ranked last among G20 countries for investment in business research and development. I also want to remind my colleague that Canada is the only G7 country that has reduced its investment in research and development in the past 20 years.
It is fine to present figures that look good. However, does he agree that Canada has one of the worst records when it comes to investment in business? Even the magazine Science says that researchers do not want to come to Canada because the scientific ecosystem is lacking and there is not enough funding.
What does my colleague have to say about that?
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