44th Parl. 1st Sess.
February 8, 2023 02:00PM
Madam Speaker, I would like to thank the member for her interesting speech. What is unfortunate is that there is a major problem in Bill C‑34. I do not understand why the government has not addressed it.
It had the opportunity to modernize the Investment Canada Act. It addressed national security. That is a good thing. However, there is another aspect, the net benefit review, which has an extremely high threshold. At this time, the threshold for the review of an investment is between $1.3 billion and $9 billion.
Does my colleague not find this threshold to be too high, and that it makes no sense to not examine investments that fall below that very high threshold?
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Madam Speaker, I would like to mention that I will be sharing my time with the member for Rimouski-Neigette—Témiscouata—Les Basques.
We are here today to talk about Bill C‑34. To date, there has been a great deal of discussion about national security, which is the main part of the bill. This bill seeks to reinforce the powers the minister has to take action to protect national security. This is not a bad thing; it is even a very good thing, but decidedly, it does not go far enough.
I also want to talk about one of my concerns relating to another aspect of the Investment Canada Act, which, unfortunately, the bill under consideration does not address.
In fact, there are a number of things in the Investment Canada Act. First, people abroad who want, for example, to purchase a company, invest in a mine, start a research firm or make any significant investment whatsoever have to fill out a form and give notice of their investment indicating their intention.
Then, the federal government must determine whether it wants to review the actual investment. It can review it based on national security criteria, which is what this bill is about. The bill seeks to give the minister more power and to tighten the review criteria.
The other review criterion has to do with the net benefit for Canada. That is something that is a little more vague and that is not very clearly defined. I would even go so far as to say that there is not much on the subject in the current act. That gives the minister a lot of latitude in determining what constitutes a net benefit for Canada. In some unforeseen circumstances, it might be good for the minister to have the latitude to use their judgment. However, it would be good to have a bit more accountability and proactivity on the part of the government with regard to the use of the act.
I would like to talk about where the review threshold was when I was first elected in 2015. I would note that the minister is not obligated to conduct a review. Reviews are mandatory only beyond a certain threshold. When I was elected in 2015, the review threshold was $369 million. What is it now? Better be sitting down for this. It has been indexed, but let us just say it is indexing on steroids. Today, in 2023, the threshold ranges from $1.3 billion to $1.9 billion. That means not all transactions go through a net benefit review if they are below that threshold.
The $1.3-billion threshold is for businesses with which Canada does not have a trade agreement, while the $1.9-billion threshold is for those with which it has agreements, such as the U.K., the U.S., the EU and so on.
This means that some Quebec companies are not protected by the current review threshold. These companies are very important to Quebec's economy, which is very different from Canada's economy. The Canadian economy relies heavily on subsidiaries of U.S. companies, but Quebec's economy is more about small and medium-sized businesses. Slowly but surely, some small businesses grow by dint of hard work and even end up getting listed on the stock exchange.
Some of these major Quebec corporations that are publicly traded and are not protected under the current review threshold include Héroux-Devtek, which has a market value of $560 million, Lassonde Industries, which has a market value of $805 million, Cascades, which has a market value of $909 million, TC Transcontinental, which has a market value of $1.3 billion, and Resolute Forest Products, which has a market value of $1.6 billion.
All of these companies could disappear overnight. Any big shot from the U.S. or any other country on the planet could come in and take them over. The minister would not even look at it. It would be rubber-stamped. Thank you, good night, goodbye to that company. These are major, strategic corporations in terms of Quebec's national interest, and the federal government will not even look at them. It could not be bothered to take the time to analyze the transaction. It is unbelievable.
Worse, in some situations, a review is conducted, but it is not always very rigorous. Let me give an example. My riding was home to a company called Rona. Everyone in Quebec knows Rona. It is a major hardware store that sells all the building materials used in homes. In 2016, the company was sold for $3.2 billion to the American company Lowe's, a company in the same sector.
What happened? A review was supposed to take place because, at that time, the threshold was set at $369 million and it was exceeded. However, immediately after the transaction, some potential wrongdoing came to light. The former board of directors was fired, as was its president, Robert Dutton. Complicit in this was the president of the Caisse de dépôt et placement du Québec, who allegedly planned his exit in order to facilitate the sale of Rona, since it was blocked the first time around, in 2012. This former president of the Caisse de dépôt et placement du Québec is now working for the Liberals. His name is Michael Sabia.
What is interesting is that when we learned about this, we immediately wrote to Minister Bains. We asked him to take a look at what was happening before authorizing the transaction. We just wanted to put it on hold to see if it was a good idea for Quebec or not. What happened? The minister rubber-stamped it. He did not ask any questions. Before we knew it, the company was gone. That is sad. The company was re-sold for $400 million U.S. when it was originally purchased for $3.2 billion. That loss of value signals an abysmal failure. It was sold for a pittance to another U.S. company after Lowe's fell flat on its face in Quebec.
Well, after the minister approved the transaction, we wondered why he made that decision and what his thought process was. There should have been a net benefit to Canada review. We submitted an ATIP request to see what documents and analyses helped the minister make his decision. The answer we got was surreal. Here is what it said: We carried out a comprehensive search and regret to inform you that we found no documents corresponding to your request.
There are no documents. The minister referred to zero documents and zero analyses to make his decision about net benefit to Canada. That is what passes for rigorous analysis by the Liberals for a company worth $3.2 billion, a massive company of strategic value to Quebec. What do people buy at hardware stores? They buy building materials. Building materials are made from raw materials. What do we produce here? We produce wood, nails, shovels and so on. The products that end up on the shelves in those stores are products we make in Quebec.
What happens when a foreign company buys that company? The foreign company has its own suppliers already. For example, an American company will use American suppliers because it already does business with them. Quebec suppliers get kicked to the curb. That is what happened, unfortunately. Many Quebec suppliers lost their orders.
Now Rona will have a second chance with its new owner. We hope things will improve, but it is sad. What happened was the Liberals could not be bothered to review the transaction to see whether it was beneficial or whether it was even over the threshold. That is a big problem. I find that really odd. When a company comes here from overseas and takes a heavy-handed approach, often our first instinct is to assume that they are much better than us, that they are much bigger and therefore unbeatable. We think we have no choice but to sell, so we immediately roll over.
Companies like Target come to mind. When Target came along, the owners of Zellers sold all their stores. It was a fire sale. Run for your lives. Target was going to come in and kill everyone. What happened to Target? It did not last a year before it shut down. Another example is Provigo. Provigo was a Quebec company, a large grocery store chain that created competition. Now we have Loblaws, which exists in the market and is up against Metro, but there used to be other players, too. Unfortunately, when Provigo disappeared, there was less competition, which resulted in higher prices in grocery stores. Today, there are no longer any Loblaws grocery stores in Quebec. Loblaws put the Provigo signs back up. They realized that the Loblaws stores were not working.
Just because a foreign company comes here does not mean that it will succeed. We too have good, solid companies. We should be proud of them. We should ask questions before rubber-stamping any old transaction. Unfortunately, it seems that this government does not understand that. There was an opportunity with Bill C‑34 to do more to defend our companies, and it did not do so. I am really disappointed.
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Madam Speaker, the member opposite is pretty much telling us that they are going to modernize Bill C-34, that it is a good thing and that we should be pleased.
I am pleased that Bill C‑34 will be updated somewhat; what is sad is that that requires rigour. The problem is that there is no rigour.
Is there a way to come up with a more rigorous bill, one that would require rigour? That is what I would find more interesting and make me happier.
Let us look at an example. In 2021-22, there were 1,255 notices of foreign investment. That is a lot. How many were examined? How many were reviewed?
Not even 1% of investments were reviewed. That is absolutely crazy, but that is what the government considers to be rigorous. It approves everything and has lost control.
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Madam Speaker, I totally agree with what the Conservative member said.
It does not make any sense for an enterprise owned by foreign interests, not just private interests, but state-owned foreign interests, to be able to buy anything under the threshold he mentioned without any oversight. The government is not even bothering to look at whether it is a good thing or not. A review should be automatic when a state-owned enterprise buys a company here.
That does not mean blocking the transaction. The idea is not to block every purchase that might happen here. The same goes for private interests. The idea is for the government to at least review the purchase and ask questions rather than just letting everything go forward. Right now, the government is sticking its head in the sand and not seeing what is happening. It is blind.
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Madam Speaker, obviously I agree with my NDP colleague, who raises a really good point.
I would add one thing: out of sight, out of mind. That is true in general. It means that the more distanced the executives are from the company's operations, the less interested they are in the company's well-being and results. It means that the further away the owner of a company is geographically from what is happening here, the less accountability there is and the less likely the company owner is to take our national interests into account in their daily business decisions.
That is something the government needs to keep in mind when deciding whether to authorize transactions.
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Madam Speaker, if I am not mistaken, the member across the way is an accountant by training. So am I, as it happens.
He has been an MP in the Liberal government for a few years now. If I am not mistaken, he, like me, was elected in 2015. In 2015, the net benefit review threshold was $369 million. Today, the threshold is $1.9 billion. There is quite a gap between $1.9 billion and $369 million. However, it was the member's government that raised the threshold year after year. In any case, it does not even review 1% of investments.
My question is the following. As an accountant, does he think that $1.9 billion is pocket change?
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Madam Speaker, I found my Conservative colleague's speech very enlightening. I find it interesting that he pointed out that there have been cases in the past, which were investigated after the fact, where there was an obligation to conduct a national security review. The government does not seem to have done the work it was required to do and analyze whether the investment was a good idea or not.
The bill under consideration, Bill C‑34, is intended to provide a bit more authority. At the end of the day, if the requirement is the same, if the government is not doing its job any more than it is now, does my colleague think that anything will change?
I find it peculiar because he talked about a case. In my riding, there was a case where there was also an obligation to review. Thanks to an access to information request, it was discovered that there had been no review. It seems that the government is systematically delinquent when it comes to its own obligations. How does that happen?
Does that not worry my colleague?
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