44th Parl. 1st Sess.
October 26, 2023 10:00AM
Mr. Speaker, my colleague brought up excellent points. I wonder what he thinks about the fact that, in natural resources, we have had Vale, Rio Tinto, Xstrata and United States Steel take over the Canadian companies Inco, Alcan, Falconbridge and Stelco. What happened? We gave up all of our natural resources to foreign companies.
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Mr. Speaker, the member for Windsor West has been a long-time member of the industry committee and has a good knowledge of the various industrial sectors.
I want to ask him about the impact of foreign ownership on certain segments of the industrial sector. For example, almost every company in the steel or aluminum industry is foreign-owned, and none of those steel and aluminum sector companies have had any capacity during the last 20 years. The stagnation we see with this foreign ownership does not impact the economic security of Canada, which can also be related, in one way or another, to the national security of Canada.
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Mr. Speaker, Bill C-34, otherwise known as the national security review of investments modernization act, seeks to update and strengthen the Investment Canada Act with the aim of protecting Canada's national security when it comes to foreign investments in our country.
As tensions rise around the world, Canadians, our businesses, our intellectual property, our private data and our natural resources must be protected from bad actors who seek to undermine our sovereignty and exert influence on our institutions and way of life in Canada. For eight years, the NDP-Liberal government has not taken sensitive transactions seriously and has failed to conduct full reviews of transactions involving Chinese state-owned enterprises, which has seriously jeopardized the security of Canadians and our government.
According to Statistics Canada, China's share of Canadian assets under foreign control doubled from 1.9% to 3.8% between 2015 and 2019. Large shares of key industries are also under foreign control, including 40% of all assets in Canada's oil and gas industry, 48% of wholesale trade, 44% of manufacturing, 30% of mining and quarrying and 25% of professional, scientific and technical services. With so much of Canada's economy controlled by foreign companies and governments, it is crucial that we ensure foreign investments do not pose a threat to our national security and prevent bad actors from weaponizing Canada's economy and our own resources against us.
Let us take a look at some recent examples of investments the government missed.
One example is the Neo Lithium Corp. and Zijin Mining. In March 2021, the minister of industry updated and enhanced guidelines for transactions involving critical minerals and state-owned enterprises. Just 10 months later, the minister ignored those new guidelines, allowing a Canadian mining company, Neo Lithium Corp., to be acquired by Zijin Mining, a Chinese state-owned enterprise, without a security review.
Another example is Sinclair Technologies and Hytera Communications. In December 2022, the RCMP awarded a contract to supply sensitive hardware for its communications systems to Sinclair Technologies, which is directly linked to Hytera Communications, a company partially owned by the Chinese government and a major supplier of China's public security ministry. It was revealed in December 2022 that the CBSA used Hytera's technology and communications equipment in 2017. Hytera has been charged with 21 counts of espionage in the U.S. and banned from doing business in that country. In 2017, when Hytera acquired B.C.-based telecommunications company Norsat International, the parent company of Sinclair Technologies, the minister of industry failed to request a full national security review.
Conservatives have long called on the current government to take swift action to ensure that, any time a foreign state-owned enterprise seeks to invest in a Canadian corporation or asset, the government conducts a thorough review. At second reading of this bill, Conservatives voted to advance the proposed legislation to the industry committee, upon which I sit, with the clear expectation that significant amendments would be made. At industry committee, Conservatives tabled a number of amendments to ensure these reviews would take place and to strengthen this legislation as a whole.
Some of the amendments tabled by my colleagues and me at industry were adopted. However, many more were voted down by the government.
We wanted to modify the definition of “state-owned enterprises” to include any company or entity headquartered in an authoritarian state. We wanted to list specific sectors necessary to preserve Canada's national security rather than the systematic approach applied or recommended by public servants. We wanted to exempt non-Canadian Five Eyes intelligence state-owned enterprises from the national security review process, to prevent an overly broad review process for an ally such as the United States or Australia. We wanted to allow the Government of Canada to maintain ownership of intangible assets that have been developed, in whole or in part, by taxpayer-funded dollars. The committee members rejected those things.
We wanted to allow the minister to go back and review past state-owned acquisitions through the national security review process, allowing for a flexible review process. They rejected that ministerial power.
We know that public servants do take a risk-adverse approach in crafting regulations and providing advice during the legislative process. That is not necessarily a bad thing. That is a good thing. However, politicians must be willing to make the tough decisions, weighing the potential benefits against the repercussions of any decision.
Going back to that first rejected amendment, Conservatives moved to include companies headquartered in an authoritarian state in the definition of state-owned enterprises to ensure that they are automatically subject to security reviews. We just want to protect our sovereignty.
Public servants warned against calling out certain nations like this, as it could conflict with WTO obligations. However, when we look at the 2019 annual report from the national security committee of Parliament, NSICOP, it highlighted activities carried out by the People's Republic of China in Canada, stating, “they are a clear threat to the security of Canada.” The report also stated that “foreign interference represents a significant threat to Canada's society and fundamental institutions.”
The government's own Indo-Pacific strategy reads:
China has benefitted from the rules-based international order to grow and prosper, but it is now actively seeking to reinterpret these rules to gain greater advantage. China’s assertive pursuit of its economic and security interests, advancement of unilateral claims, foreign interference and increasingly coercive treatment of other countries and economies have significant implications in the region, in Canada and around the world.
Despite all that, the Liberals and the Bloc members voted down our amendment. Frankly, it is not surprising, given how long this government has ignored the 2019 NSICOP report, which called for a foreign agent registry, and given the fact that our Prime Minister has said that he admires the basic dictatorship of China.
The question I want the government members to answer is this: Do they really believe that, without the amendments we put forward in good faith, which they rejected, this bill is as strong as it could be to protect Canadian assets, companies and, most importantly, our sovereignty? I do not believe they can answer with a yes.
Thankfully, a few of our common-sense Conservative amendments were passed.
Number one was to reduce the threshold to trigger a national security review from $512 million to zero for any investment by a state-owned enterprise. I think if there is one thing to note from the work the Conservative Party did it would be our standing up for Canadian sovereignty by changing this fundamental aspect of the Investment Canada Act. Moving forward, when this is passed, when China is looking strategically to take an asset in Canada, say mining rights or a small mine that would fall under the threshold, which I believe this year is at $512 million, that strategic move to try to make its way into the Canadian economy would be subject to a security review. That would be thanks to the hard work of the Conservative members.
Number two was to ensure that items reviewable under the national security review process would include acquisitions of any assets by state-owned enterprises. Number three was to work to ensure that an automatic national security review would be conducted whenever a company had previously been convicted of corruption charges. Number four would require the minister to conduct a national security review by changing “may” to “shall” to ensure a review is triggered whenever it is in the review threshold.
That brings us to today. Conservatives have brought forward a common-sense amendment here at report stage that would protect the system of checks and balances in place on the minister's power to undertake, or not undertake, a national security review. Our amendment would remove clause 15 of Bill C-34, which would revert the language back to the existing text in the Investment Canada Act. This would ensure that cabinet continues to play an active role in ensuring regional representation and in making major decisions about foreign investment in our country.
In conclusion, I understand what the Liberals are trying to do here by streamlining decisions through the minister of industry and the minister of public safety, but we must ensure that regional representation plays a role in national security reviews moving forward.
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Mr. Speaker, I appreciate the amendment to bring the threshold to zero dollars with respect to state-owned enterprises.
I would like to ask my hon. colleague's opinion about the investments done by multinational companies where they come and capture an entire sector, as it is today with the steel and aluminum sector being entirely foreign owned. They just become the branch office of the foreign multinationals, focusing only on the North American markets, and never attempting to export the talent, resources and expertise that is available in Canada to the countries with which we have free trade agreements across the world.
Does that not also fit into the definition of economic security which, in my view, is the same as national security?
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Mr. Speaker, national security issues due to investments made by certain state-owned enterprises were always a concern. In fact, I think we have gone back and re-reviewed some of the decisions made to allow foreign investments by state-owned enterprises.
My view is that this bill is comprehensive enough to take care of the national security review of any investment made by any foreign entity.
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