44th Parl. 1st Sess.
November 6, 2023 11:00AM
Mr. Speaker, I will leave it to the minister to convince the public of the need for his gag order. We are debating a closure motion, but we are wondering why we are even doing that. The Liberals are only imposing closure because they already know that someone is going to vote in favour of it, and that is likely the NPD, which is part of their coalition.
My question will instead focus on the bill. I think that there is a missed opportunity in Bill C-34, and since I have the floor, I want to speak to that problem. The minister is here, so why not?
Bill C-34 modernizes the entire issue of national security to tighten the rules in that area. That is not a bad thing in the current geopolitical context. However, the government left out a major component that it would have been only natural to include in this bill. We have often raised, in the House and in public debate, the issue of modernizing the Investment Canada Act, particularly the economic interest component of it.
When a major investment is made in a business here or in a new business, or when a foreign entity purchases an existing business, how is it that the review threshold is as high as $1.7 billion? When this government took office, there was a review threshold of $300 million. That means that, now, with the exception of cases where there is a threat to national security, the government does not even take an interest in files until the review threshold reaches $1.7 billion, as opposed to $300 million.
Does the minister not think that is rather high?
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Mr. Speaker, I am happy to rise today to speak to Bill C-34, which would update the Investment Canada Act. This act is designed to do two main things. The first is to ensure that foreign investments in Canada have a net benefit to Canadians. The second is to ensure that foreign investments are not detrimental to our national security.
Many Canadians, especially Canadians of my age, might know this act better by its former name, The Foreign Investment Review Act. In its early days in the 1970s, it was brought in to deal with a rash of foreign buyouts, mainly American, of Canadian companies.
The Foreign Investment Review Agency approved about 90% of the transactions it dealt with, but was criticized by both Liberals and Conservatives for actually doing its job by blocking some proposals that did not show a benefit to Canadians.
Therefore, Brian Mulroney brought in the Investment Canada Act in 1984. He replaced the Foreign Investment Review Agency with Investment Canada, saying that he wanted to welcome foreign investment. True to his word, under his government, Investment Canada did not block a single foreign investment transaction, not one. The Liberal governments that followed Mulroney, under Jean Chrétien and Paul Martin, had the same record, not one application blocked.
The Harper government was a different story. Harper blocked the sale of British Columbia-based Macdonald, Dettwiler to the American company Alliant based on both financial and critical technology arguments.
On the other hand, in 2012, the Harper government allowed the $15-billion sale of Canada oil company Nexen to the China National Offshore Oil Company, owned by the Chinese government, and the $6-billion sale of Progress Energy to Malaysia-based Petronas. However, the same day, Harper changed the Investment Canada Act to block state-owned foreign investment in Canadian oil and gas companies, essentially closing the barn door after the horses had left.
Therefore, legislation regarding regulating foreign takeovers of Canadian companies has changed from time to time over the past decades. Foreign investment trends have changed as well. The share of U.S. investment in Canada has declined over the past few decades, but it still leads the pack followed by the Netherlands, the United Kingdom, Luxembourg, Switzerland, Japan, China, Germany, Brazil, France and Bermuda, although, I suspect the high placement of Luxembourg and Bermuda reflects more where Canadian companies are hiding their profits than real sources of investment.
However, it is clear that we need to keep up with the times in regulating foreign investment, and Bill C-34 is another example of that.
Information and data are the new oil, and earlier versions of the Investment Canada Act were essentially blind to that. The bill before us introduces a pre-implementation filing requirement for certain investments to give earlier visibility to situations where there is a risk that a foreign investor would gain access to sensitive assets or information immediately on closing.
I have talked to numerous tech companies over the past few years. One story I hear repeatedly is that small Canadian tech companies work hard to develop a new technology, say in hydrogen energy development or AI advances. However, when it comes to expand their companies to really get their product to market, they need investment. Too often in the Canadian tech ecosystem, these companies simply get bought out by bigger companies from the United States, Europe or China. With those sales go the intellectual property that represents the core of their company's value.
The present version of the Investment Canada Act allows companies to report takeovers after the fact. However, if critical intellectual property is involved, it is usually too late to stop the transfer of that information, if we find out about the transaction 30 days later, for instance. It is not like the old days when the main value of a company was in the factories it owned. This new pre-implementation filing could help put a stop to that where necessary.
There are several other improvements that provide more flexibility for the minister to act and better manage the entire process.
What would make the act even better? First, the act should mandate the review of an acquisition by a state-owned enterprise of a company previously reviewed by the ICA, and I would like to spend some time on a story that illustrates why this is needed.
There is a company called Retirement Concepts that owns and operates a number of seniors residences in British Columbia, long-term care homes. One of them is the Summerland Seniors Village just outside the federal riding I represent but within the provincial riding I live in. When I first sought to enter politics 10 years ago, I was involved in a provincial election in that riding.
The Summerlands Seniors Village was involved in a tragic story of a local family that lost both its mother and its father in 2012 to poor care and accidents. I met with members of the family and heard the heart-wrenching story of neglect that had taken the lives of their parents.
After that incident, the provincial government demanded that Retirement Concepts hire more staff, but managers claimed that no one was applying. I am guessing that a combination of low wages and overworked conditions had a lot to do with that.
In 2016, Chinese insurance giant Anbang, then a privately held company, bought Retirement Concepts, a transaction that was reviewed and okayed by the federal government's investment review process. Less than a year after that purchase was okayed, the Chinese government seized the Anbang company and jailed its chairman for fraud. Perhaps it knew something that the Canadian government missed when that review was carried out.
Suddenly, we have the Chinese government owning a company that is one of the largest providers of long-term care in Canada and certainly the largest in B.C.. Not only is it one of the largest providers of long-term care, it is known to provide very poor care at times for our seniors.
In fact, in 2020, the provincial government in British Columbia had to seize management control of four care homes run by Retirement Concepts because of the continuing problems with poor care. It returned that control just over a year later, but it is an indication of the general lack of priority Retirement Concepts had placed on the care of seniors.
At present, there are no provisions in the Investment Canada Act that would allow Investment Canada or the minister to be able to review the subsequent acquisition by a state-owned enterprise of an ICA-approved takeover or merger by a foreign private company. We have to change this.
The NDP put forward an amendment that would allow for the review of a takeover by a state-owned enterprise. This can be done by establishing the power to require a mandatory divestment of all Canadian assets by entities in these specific circumstances.
As an aside, in the case of long-term care homes, the NDP is very much in favour of a move to a future where seniors' care is given the same respect that all health care gets, a future where no long-term care homes are owned by private companies that put profit ahead of the well-being of our seniors.
This is an example of where we could and should take a big step in that direction.
Another factor to consider in investment review is to prevent the loss of publicly funded research and development from leaving the country, resulting in the loss of jobs and, basically, the theft of taxpayer dollars.
A company called Nemak received $3 million dollars from the government's automotive supplier innovation program. However, in 2020, Nemak closed its plant in Windsor, where those funds had been used to create new products for General Motors, and transferred that technology and those jobs to its operations in Mexico.
An NDP amendment, passed in committee, would allow for the review of a foreign takeover to consider the intellectual property whose development was funded by the federal government and to issue remedies to retain the benefits in Canada. Therefore, a situation like that of Nemak would not happen again.
I do not have time today to go over all the improvements this bill would bring to the foreign investment space in Canada or to go over all the improvements that we had hoped it would bring but fell short.
In this new world, where ideas and data are often more valuable than the natural resources we have so long relied on for our wealth, we need a new regulatory framework to protect our industries, our workers and our companies. Bill C-34 is a step in that direction.
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Mr. Speaker, I would like to take this opportunity to respond right away to my Conservative colleague, who is criticizing us for not supporting their amendment to Bill C‑34.
The Bloc Québécois did not support the Conservatives' amendment to Bill C‑34 because it was too broad. It was so broad that it included just about every investment not originating with one of the Five Eyes countries, the Commonwealth allies or certain major countries in the world. Unfortunately, my colleague may not be aware of this, but Quebec accounts for 40% of European investments in Canada. The amendment would have discouraged a whole lot of investments.
We suggested another solution. We suggested lowering the review thresholds, which had been raised so high that we ended up with a net benefit review threshold of $1.7 billion. In 2015, that figure was about $300 million. Why has the review threshold skyrocketed like this, and why do the Liberals seem to think that is okay?
I would like to know if the Conservatives are okay with it too.
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Mr. Speaker, today we are talking about Bill C‑34 at third reading stage. I feel like I am going back in time because even though I am not a member of the committee that studied Bill C‑34, I had the opportunity to speak to it at second reading. That was on February 8, if I am not mistaken. I find it fascinating to see what has changed in the bill between February 8 and now, or rather, what has not changed in Bill C‑34.
At the time, we said that it was an interesting bill that would enhance security, for example in terms of foreign investments in sectors where we feel that national security might be jeopardized or in danger. We said that we agreed.
However, we also said that we should take the opportunity to examine another thing while studying Bill C-34, an act to amend the Investment Canada Act, which includes a mechanism for initiating a study or review of an investment when it exceeds a certain threshold, in order to determine whether the investment is of net benefit to Canada. That is what Bill C‑34 says. We thought we should go a little further than just considering the issue of national security and also question the effectiveness of this legislation in terms of protecting our head offices.
When a foreign entity comes to Canada and says that they want to buy a certain brand or company for a lot of money, and when that purchase would have an impact on our entire supply chain, our infrastructure, our habits and our competition system, one of the first things we should instinctively do is look at whether it is a good investment or not. Unfortunately, that was not included in Bill C‑34 at the time. It is still not in Bill C‑34 today. There are mechanisms, but they are weak. They are extremely weak.
Back when I was elected in 2015, the review threshold was set at $300 million. That was okay, because at least some reviews were being done. Maybe it might have been better if it were lower, but a threshold of $300 million would already capture many businesses. The government could say that a review would be done to see if allowing a foreign business or investor to buy a business worth $350 million, $400 million or $600 million would be of net benefit to Canada. I thought it was a good thing. There was a baseline.
The problem is that, since the Liberals took office, the threshold has jumped. Today, it is no longer $300 million. It is $1.7 billion. I challenge anyone in the House to go search online and find a Quebec business worth more than $1.7 billion. There really are not many. There are maybe a handful, no more than 10 for sure.
In theory, a wealthy investor, or several wealthy investors, from any country in the world could swoop in and buy everything, or nearly everything, and the government would not make a peep because each of the transactions is less than $1.7 billion. According to the government, that would not be a big deal. That is the reality of this government's laissez-faire attitude. What is worse is that the government has exacerbated the situation over the years, saying that things are fine that way.
In Quebec, we take the notion of national interest to heart. It is important to us. However, in a self-proclaimed postnational state like Canada, nobody even knows what a nation is anymore. How can the government know what is in the national interest if it does not even know what a nation is?
The problem relates to a significant difference between the economies of Quebec and Canada. It may be an underlying factor in the government's non-response or hands-off approach to this issue. Canada has a branch-plant economy, which means that, naturally, a foreign company that sets up shop in Canada will often have a Canadian head office. The company will do all the buying, but it will keep a head office in Canada and manage its Canadian interests from there. It might well belong to someone who is 1,000 kilometres outside the country, but that is no big deal because the company still has a small head office here. Where is the head office usually located? It will be located in Toronto, not in Montreal, Quebec City, Shawinigan or Boucherville.
That is sad because many entrepreneurs in Quebec are working hard to build a strong ecosystem. We decided to build an entrepreneurial economy, rather than the type of branch-plant economy that is part of Canada's vision, if it even has one.
The Bloc Québécois has a constructive vision. We simply want to know what is happening. We want investments to be reviewed. We are not saying that we are against investment, but we want to at least know whether an investment is in our interest before it is authorized.
I am very disappointed. The fact that the government is not even thinking about this is problematic. The government does not even want to know whether investments are in our interest or not. If the transaction is less than $1.7 billion, the government closes its eyes, signs on the dotted line and everything is good. That approach is not working and, unfortunately, we are going to have to resolve that problem. If Canada does not want to solve this problem within the framework of the Canadian Confederation, then an independent Quebec will certainly be able to solve it when it has all the tools at its disposal to make its own decisions.
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- Nov/6/23 2:28:11 p.m.
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Mr. Speaker, for three decades, Liberals and Conservatives relied on the private market, and now the average rent for a one-bedroom is $2,500 a month. The government's own housing advocate is calling for more community housing that fits people's budgets, and the Bank of Canada says that investing in social housing would not be inflationary.
The Conservative leader is calling investment in social housing a “Soviet-style takeover”. He is in it for wealthy investors.
The Liberals are failing Canadians. Will the Prime Minister stop siding with Conservatives and commit to doubling Canada's social housing stock?
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Madam Speaker, I am pleased to rise in the House today to speak in support of Bill C-34, An Act to amend the Investment Canada Act.
This bill would improve our ability to respond to changing circumstances that affect Canada's economic well-being and to remain vigilant in upholding our national security. More specifically, I want to focus on how our government's efforts to modernize the Investment Canada Act would help protect the intangible assets of Canadian businesses, which are the cornerstone of economic growth in a 21st-century economy.
As all members are fully aware, intangible assets, such as intellectual property, trade secrets and data, are of immense importance to our economic vitality and prosperity. As such, our country and other open economies are increasingly being targeted by hostile actors, which pose a threat to our national security, continued economic well-being and prosperity.
Consequently, our government is taking timely action to respond to evolving threats to our economic well-being and national security. Foreign investment certainly fuels innovation and assists businesses to succeed and grow. However, I want to emphasize that we should not compromise when safeguarding Canada's economic interests. As members will note, we should be laser-focused on striking the right balance between attracting foreign investment to help Canadian businesses grow and remaining mindful of the need to protect our intangible assets and intellectual property.
Highly innovative Canadian companies are at the forefront of developing new technologies, such as quantum computing, biotechnology, medical devices and innovative clean energy. Attracting investments to actualize innovation is complex and challenging, yet the safety and protection of Canadians is our government's number one priority. Canada must have a robust and flexible tool kit to protect Canada's interests from national security threats, which come in many forms.
We heard from multiple witnesses on this topic in the context of hearings arranged by the Standing Committee on Industry and Technology. Those witnesses shared their expertise to highlight that hostile state and non-state actors are increasingly pursuing strategies to acquire goods, technologies and intellectual property for uses that are incompatible with our national interest and economic outlook.
We also heard witnesses signal how foreign investment can be a conduit for foreign influence activities that seek to weaken our long-term economic prosperity. Around the world, foreign investment regimes are getting finetuned to better incorporate national security considerations. Our international partners are taking action to respond to shifting technological and geopolitical threats by amending their investment screening regimes.
The U.S. overhauled its foreign direct investment laws in 2018 by adding new types of transactions to government review. For the first time ever, the U.S. also mandated notifications in transactions involving critical technologies. These regulations came into effect in February 2020.
Similarly, Australia updated its regime in January 2021 to grant its government the discretion to require mandatory notification for transactions with a national security dimension. The same can be said for the United Kingdom, which introduced a new stand-alone regime for national security and investments in January 2021.
The U.K. established a mandatory obligation to secure clearance for transactions where control of a business was acquired in 17 sensitive sectors, to be secured before the transaction is completed. The U.K. also introduced legislation that allows the government to impose interim orders while the review is being conducted.
I reference such changes in the U.S., Australia and the U.K. to make a simple point: Canada's national security review authorities under the ICA have been in place since 2009. Quite often, changes introduced by our allies are meant to ensure that they catch up to where we already are. Given our track record, Bill C-34 is the latest in a series of actions our government is taking to make our regime more robust, responsive and flexible.
I would remind members that in March 2021 we updated the national security guidelines to advise that investments involving sensitive personal data, sensitive technologies and critical minerals, as well as investments by state-owned or state-influenced investors, would face enhanced security. The next step came in 2022 when we issued a new policy for review of foreign investments originating from Russia.
In 2022, we also introduced a new voluntary filing mechanism for investors intending to obtain greater regulatory certainty with the same statutory deadlines as a mandatory filing. In addition, we now have five years to review and adopt measures regarding an investment in the absence of a voluntary filing.
As members can see, Bill C-34 is just the latest effort to ensure Canada's foreign investment review regime represents the gold standard. Fundamentally, our government believes that an effective investment review regime must adapt to changing world dynamics and business practices. To respond to the evolving and accelerating threat environment, now is the right time to modernize key aspects of the ICA.
Bill C-34 would better align Canada with our international partners and allies. One of the ways our regime would align more closely with allies includes introducing the new requirement for prior notification of certain investments. This particular amendment would ensure that Canada has greater oversight over investments in certain sensitive sectors, especially when they give investors material access to assets and non-public technical information, such as cutting-edge intellectual property and trade secrets, once the investment is finalized. It would enable the government to prevent potentially irreparable damage. Investors would have to provide notice of the transaction within the timelines specified in the regulations.
A second important change is that it would provide our government the authority to impose interim conditions on an investment during the course of a national security review to prevent potential national security injury taking place during the time the review is being conducted. Another amendment would allow Canada to share case-specific information with international allies to support national security assessments.
Finally, the ICA includes a provision to allow for closed material proceedings. As such, the act would introduce new rules that would allow for more effective judicial review of national review decisions by allowing the use of sensitive information, while also protecting such commercially sensitive information from disclosure. Ultimately, these significant amendments would ensure that Canada's tool kit evolves and adapts to the changing global threat landscape.
It is for these reasons that I believe the House should support this bill and these new amendments. Where national security is concerned, we should never hesitate to take decisive action.
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Madam Speaker, foreign investment has generally been based on the size of the transaction and/or the sector in the transaction. It has now come to the point where size or sector does not actually matter, in terms of security review and the sensitivities involved. Small companies can create security difficulties for Canada. Sectors one would never have thought of can create difficulties for Canada, particularly dual-use sectors.
I am interested in the hon. member's comments as to whether this bill addresses this dramatic change in what should be available to or reviewed by the Canadian authorities.
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Madam Speaker, I am honoured to rise in the House, as always, and add my voice to the debate we are having here about Bill C-34. When we say “Bill C-34”, most Canadians who are watching or hearing the debate here would know exactly what that means.
I would remind members that today, we have heard several points of order from members on the Liberal side of the aisle who do not like the topics we are covering regarding this legislation. However, Bill C-34 is an act to amend the Investment Canada Act, modernizing ways in which the federal government could attract more investment in this country. This line is very important, because it was the Prime Minister who instructed the industry minister to “Contribute to broader efforts to promote economic security and combat foreign interference by reviewing and modernizing the Investment Canada Act”.
I am going to take the time I have on the floor here today, and hopefully not get “point of ordered” too many times from the other side, to say this: Actions speak a lot louder than words. What we have, after eight years of the NDP-Liberal government, is an economic situation in this country that is not very good. After the vote today, for example, a big contributor to the frustration of millions of Canadians is the punitive and damaging carbon tax that the Liberals, the NDP and the Bloc Québécois are imposing on this country. The carbon tax is bad for our economy, for business, for investment and for Canadian households.
In talking about investing in Canada and competition from other countries around the world, the example I am going to cite is one that the Leader of the Opposition, the member for Carleton, has raised from our neck of the woods in eastern Ontario.
We talk about the government's economic record, its actions and not just its words in a mundane piece of legislation. The Liberals are continuing to endorse the carbon tax, and they voted today against taking the carbon tax off all forms of home heating for all Canadians. If that is not out of touch, then the way we have greenhouses taxed, and the lack of competition, or frankly, taxing them out of business in this country in too many cases, is a perfect example of how the Liberals' policies are failing.
I think of SunTech Greenhouses in Manotick, in Carleton County just north of my riding in eastern Ontario. For years, it has been struggling to compete. It is based in Manotick, here in eastern Ontario, and it is struggling to compete on cost with tomatoes that come from as far away as Mexico, or even farther south than that. Why is that? It is because the greenhouse in eastern Ontario is being nailed with the carbon tax. The irony of all that is the fact that the CO2 it creates does not go into the atmosphere; it goes into the greenhouses and into the plants that are being grown here locally. It is local food, a local economy and local investment, yet it is getting nailed with the carbon tax, which is the height of irony. It is struggling to compete with tomatoes shipped from Mexico, coming up on a ship and then by truck, and those countries are paying no carbon tax whatsoever.
What we are seeing is our potential in agriculture in this country being hurt badly. We are seeing farmers being taxed for growing food, truckers being taxed to ship the food and grocers being taxed to sell the food. It is adding to a competition problem in this country, and it is adding to, not taking away from, the cost of living crisis in every single part of this country.
I think about two areas I have had the opportunity to visit in recent months. Let's say someone runs a business in northern Ontario and is trying to compete for investment into Canada and actually taking the investments here and maybe exporting around the world. Timmins is hundreds of kilometres away from southern Ontario and the United States, our largest trading partner.
Let us just think about it for a second. There are zero rebates for businesses in Timmins when it comes to these carbon taxes that they are being nailed with. This is only just beginning. They are going to be quadrupling in the coming years. If they are trying to compete with a business in, say, Michigan or even the other way around, if a business in Michigan is competing with somebody at the soup and salad bowl, Simcoe County in Ontario, if a business is trying to take the 600 or 700 kilometres up to Timmins to provide groceries and fresh food, they are being nailed with the carbon tax on the Canadian side.
One of the things I think is really important in this debate is what I will say again: actions speak louder than words. We have a modernization effort here in this bill, long past due. We have tried to add to and strengthen the bill in many ways with no success from the Liberal government.
We talk about priorities and we talk about legislation coming forward. There are so many ways to combat the problems we are facing. Axing the carbon tax is a very high priority for a growing number of Canadians. It is not an environmental plan. It is a tax plan and it is punitive to competition and to investment in Canada, as we can see by recent stagnant numbers, which we are continuing to see in economic indicators on inflation, on housing and on our growth as an economy. We are going in the wrong direction.
The other half I want to highlight is when we talk about efforts to combat foreign interference, we will not look at the words. We will look at the actions of the Liberal government the past couple of years.
We have seen multiple efforts by the Prime Minister and the NDP and Liberals voting together multiple times to ignore, brush aside or try to sweep under the carpet the seriousness and magnitude of foreign interference in our country. In response to the bombshell allegations that were leaked by journalists and courageous whistle-blowers who had to come forward to give the information, we found out that there were numerous members of Parliament who were under surveillance, under threat. It was not until these leaked reports and these whistle-blowers came forward and they were published on the front pages of The Globe and Mail and other national publications that the government finally attempted to address the issue.
Look at the Rosenberg report by Morris Rosenberg after the 2021 election. That was an absolute whitewash attempt to cover up the severity and the depths to which the Communist Party in China attempted to interfere in our democratic process. They did not even bother to interview members of the official opposition from the Conservative Party on their experiences and evidence of serious wrongdoing in the 2021 election. They said that report would be good enough and tried to move on.
Second, whenever further allegations came and they were under further pressure, their actions spoke louder than their words. They appointed a special rapporteur. Most people had to google what rapporteur even meant. For months they went on a charade in a process that resulted in the resignation of David Johnston after he lost a lot of credibility—
Some hon. members: Oh, oh!
Mr. Eric Duncan: I hear the heckling.
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Madam Speaker, at the committee stage of this bill, the Conservatives introduced an amendment that would have required any major investment from a state-owned enterprise outside the Five Eyes to be considered a national security risk. My riding and a few other Quebec ridings are home to the aerospace industry. An investment from Airbus, a French-German state-owned enterprise, would have been automatically considered a threat to national security. That amendment could have posed a serious threat to major investments in Quebec, major investments in the aerospace industry and major investments in my riding.
I would like to know whether my colleague still agrees that such investments, in my riding and in our aerospace sector, should be automatically considered a threat to national security.
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Madam Speaker, it is my privilege to address the House today on Bill C-34, an act to amend the Investment Canada Act.
There are some positive advancements in this bill. Notably, there is the move to give the minister more time and authority to assess foreign transactions that might compromise national security. These are important considerations in an increasingly less secure world where foreign actors are using several means, through asset acquisition, technology transfers and theft, to advance their economic interests, often to the detriment of others, including trade partners and allies. It is important that Canada represents itself well in this regard, and does not always arrive as the only boy scout at the negotiating table.
I will keep the rest of my comments today to the parts of this bill which, at this stage, seem to overlook key principles on which we, the people of Canada, govern ourselves, and to how some of the proposed amendments would affect business in the manner it transpires in an interconnected world, which is becoming more and more scarce of resources.
In March 2021, the current Minister of Innovation, Science and Industry, and let us say the industry minister going forward, updated and enhanced guidelines for national security reviews for transactions involving critical minerals and state-owned enterprises. They were just words on paper it seems because in January 2022, the same minister failed to follow these guidelines when he fast-tracked the takeover of Neo Lithium mining by Chinese state-owned Zijin Mining without a national security review.
It is an important illustrative case. Neo Lithium was a Canadian-listed company with assets in Argentina. None of the assets were in Canada, but in a country whose critical mineral assets were far from any supply chain that might emerge in Canada. Why was Neo Lithium a Canadian company? It is because it is registered in Canada and is listed for trading on the Toronto Stock Exchange, notably, the world's foremost exchange for listing mining properties in every jurisdiction.
About 43% of the world's publicly listed mining companies are hosted on Canadian exchanges, with an estimated market capitalization of over $560 billion. An understanding of this strength is critical to grasp what Canada and Canadians bring to the world wide mining landscape.
National instrument 43-101 is a Canadian regulatory reporting instrument that provides clarity on a company's resource plays and is world-renowned. This instrument is one of the ways in which our resource industry and our financial markets have become internationally renowned as being best in class. Investors around the world count on our standards to understand the prospects of mineralization in resource opportunities. This is an international advantage that we would let go of at our peril. Negligence of this understanding is not an excuse for decades of hard-won international repute.
Co-existent with this regulatory standard is pricing. No international miner is going to list their prospect in a jurisdiction where they cannot raise funds to advance their project. Gaining so-called liquidity on these markets means that there is an active and broad array of buyers and sellers following the industry.
Funds are raised for mineral developments of all types, including critical minerals, at what is called a “multiple”. For simplicity, let us use the price-to-earnings multiple in Canada, which is currently around 13.8 times. Concurrently, broad market multiples in the U.S. are 22 times. Comparing apples to apples, the market in the U.S. values their companies at a rate about 60% higher than in Canada.
There is more to consider in that analysis, as that is frankly too simplistic, and the resource industry has more sway in the Canadian market, so its discount is more like 15% to its U.S. counterparts, but we have more small and micro exploration companies. Any entrance of political interference in this very transparent process will move investment funds, prospects, jobs and money from Canadian oversight to foreign oversight. The loss to our economy and our reputation will be significant. Let us ensure we have these considerations in mind as we develop policies that are meant to restrict foreign investment in Canadian-listed companies with foreign assets.
As an example, Australia is Canada's main competition for listing mining properties. Its disclosure regime is not considered as robust as Canada's, so we win on the basis of reputation.
Fifty per cent of the world's lithium supply currently comes from mines in Australia. Ninety per cent of the lithium extracted in Australia ends up in China. That is what is meant by a “critical mineral supply chain”, at which China has performed so adeptly. In order to develop Canadian mines for the world's growing critical mineral needs, we will need the invested funds from around the world for development and financing at a multiple where it makes sense here as much as it does elsewhere, particularly in regimes with much lower regulatory oversight.
In the case of Neo Lithium, the industry minister approved the takeover, ignoring his own guidelines. Because no one could find the rationale, transparently, the Standing Committee on Industry and Technology undertook a study specifically on the acquisition. The committee received significant input and made three recommendations, the most important of which is “That the government create a formalized and transparent process” for these reviews. Members will note from my previous analysis that I do not disagree with the outcome at which the minister arrived. However, I am dismayed that it arose in direct contravention to his previously stated guidelines.
Canadian companies working in exploration and development opportunities globally need to continue to lead their peers in developing the minerals the world needs more of going forward. I agree with the committee that there should be a transparent process, and it seems that the minister and his department are only learning the inputs to these decisions on the fly. If they need help, there is an excess of industry expertise in Canada that can advise outside the halls of the industry department, and the minister should not be averse to seeking this input.
Now, I contrast the minister's decision on Neo Lithium with his decision this past November, where he ordered the divestment of Chinese state-controlled shareholdings in three Canadian-listed mining companies: Ultra Lithium, which has five mineral prospects, two of which are in Canada, two in Argentina and one in Nevada; Lithium Chile, which has three mineral prospects in Chile; and Power Metals Corp, which has three Canadian exploration properties. I cannot find the consistencies. Arguably, Lithium Chile should be treated in the same manner as the minister treated Neo Lithium. However, something changed, or something is not transparent, as the committee recommended it should be.
There are dozens of Canadian-listed mining companies with foreign investors, including in critical minerals, that were not addressed by the minister. At the same time, here in Canada, our only producing lithium mine is the Tanco mine in Manitoba. Tanco was taken over by Sinomine Resource Group, a Chinese state-controlled company, in June 2019. Notably, all the minerals it extracts are exported directly to China, which is a unique approach to our strategic supply chain in critical minerals. To add confusion to the mix, Sinomine was also the shareholder of Power Metals, which the minister ordered to divest its shares in the previous example I gave. It is a twisted plot with no apparent consistency.
This brings me to a significant concern with the proposed amendments to the Investment Canada Act in the bill. The legislation proposes to remove Governor in Council oversight from the process of assessing foreign transactions for national security consideration. This would effectively dilute the government's role and place it directly in the hands of one minister. Let me remind members that this very minister has already acted with absolute inconsistency on this file, in direct contravention of his own guidelines. Now this amendment seeks to move this decision further from the transparent process that the industry committee recommended; he has stated that he agrees with the recommendation, yet he is not acting that way.
I say that words and actions need to align. Unfortunately, with the bill before us, as with so many of the government's initiatives, they do not.
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Madam Speaker, we know that Parliament significantly reformed the ICA in 2009. That was of course done under a majority Conservative government led by Prime Minister Harper. At that time, a very ill-advised step was taken. The Conservative government raised the thresholds that would trigger a net benefit review of an investment under the act and eliminated most sector-specific requirements, with the notable exception of cultural businesses. At the same time, Parliament enacted provisions that granted the federal government more extensive powers to screen and potentially block any foreign investment that could threaten national security.
Does my hon. colleague know how many investments have been blocked since 2009 under the foreign investment national security criterion?
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Madam Speaker, it is a very large concern. One person should not have that much power in a democratic government, period. For example, let us say that the minister of the day is from Ontario and a foreign investor wants to come along from an authoritarian state and spend $30 billion buying a Volkswagen electric battery plant. The minister from Ontario would be under a lot of pressure to allow that type of investment to proceed, but it might not be in the national interest. That is why it is important to have multiple perspectives at the table when decisions are being made about investments that are national in scope and could have major effects on our GDP, our economy and our national security.
I agree that the Bloc is being hypocritical on this. It should support our amendment.
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Madam Speaker, I rise in the House today to discuss Bill C-34, an act to amend the Investment Canada Act.
Ultimately, at the very heart of this debate is the prosperity of Canadians and their well-being. For Canadians to prosper, the government of the day needs to do three things. It needs to grant freedom to the people: freedom to dream, freedom to take risks and freedom to earn a living. The government of the day needs to facilitate an environment of economic prosperity where folks can dream, take a risk and invest, where red tape is cut and where taxes are decreased so that people can flourish. The government of the day also needs to prioritize the safety and security of Canadians. Without our borders being secure and without the safety of Canadians being front of mind by the government, it is rather difficult to pursue these other things.
That said, we also know that the government needs to get out of the way as much as possible. When looking at this legislation and the amendments made to the Investment Canada Act, one must ask this question: Where does the balance lie between government engagement or involvement and none?
Here in Canada we have incredibly industrious and talented people. We have people who combine their talents with the bounty of the land to prosper, and they make amazing things possible. I think of the farmer who works his land and brings it to harvest. I think of the fisherman who works on dangerous high seas. I think of the miner who works miles underground. I think of the business owner who brings her passion to life through innovation and hard work to create jobs for others and, of course, to earn a living herself.
Because of the greatness of the people who call Canada home, I believe we can participate in a broader global economy as well. That is where the bill comes in. This broader global economy presents amazing opportunities for Canadian businesses and allows us to spur innovation. Our quality of life grows when the Canadian economy can offer so much to the world and to each Canadian. The world in turn, of course, invests in Canada. Our economy then grows even more and Canadians are empowered to live fulfilling lives to an even greater extent.
While the global economy generates many opportunities, it also invites threats, which is again where Bill C-34 comes into play. It is why it is so very important that we as Canadians are vigilant in making sure that the investments we are attracting into our country are ones that we indeed want to attract, ones that are good for Canada. It means that a robust review process is absolutely necessary to ensure this is the case. A thorough and robust review process, I would argue, is an absolute must.
The globe is not made up entirely of governments that desire peace and goodwill for all people. We know that, perhaps more now than many years ago. We know that some states pose a threat to the very way of life we enjoy here in Canada. They do not desire the prosperity of Canada, nor do they approach our market in good faith. In fact, they have other objectives in mind. These countries are not our friends. That is why it so very important that we get legislation like this right.
It is the duty of the government to ensure that Canadians are kept safe and secure, that good decisions are made and that the right investments are drawn into the borders of our land. Certain countries operate with covert agendas and work to undermine the security of our nation and the prosperity of its people. This often happens through the vectors of our international trade and the acquisition of Canadian assets. This is why, again, it is so important for security reviews to be done in a thorough and timely manner. I will use some examples to highlight what I mean.
In 2017, the Minister of Industry failed to request a full national security review of the acquisition of the B.C.-based telecommunications company Norsat International and its subsidiary Sinclair Technologies. The Chinese company Hytera Communications wanted to acquire them. We know that Hytera Communications is partially owned by the People's Republic of China. A careful review should have been done but was not.
Fast-forward then to December 2022, and the RCMP actually awarded a contract for sensitive communications system equipment to this technologies firm. Again, I will remind the House that it is partially owned by Beijing.
This company then, in January, only a month after the contract was awarded to them, was charged with 21 counts of espionage in the United States, and then banned from doing business in the U.S. by President Biden.
This company is one that was given access to all RCMP communications services. Of course, we could imagine what that does to our overall safety and security as a nation and to the confidence that Canadians can place in the RCMP.
Here is another example. In 2020, even more insultingly, the Department of Foreign Affairs actually awarded a contract to a Chinese-based company called Nuctech, founded by the son of a former general secretary of the Chinese Communist Party. They were contracted to supply X-ray equipment to 170 Canadian embassies and consulates. One can quickly imagine what the impact of such a decision would be, in terms of the types of intelligence that could be gathered through doing X-rays, especially in a place like an embassy or a consulate.
It would seem that in some ways it is almost on brand for the Liberal government to turn a blind eye to these important decision-making processes and just allow things to flow the way that they will, which is actually putting Canadians in jeopardy then. This is where responsibility needs to be exercised, and I would even dare say just some basic common sense. We have to take precautions in order to safeguard the people of this country and our economic prosperity as a nation.
Speaking of economic prosperity, what could be more prosperous than people earning a living for themselves and being able to take that money and invest it where it needs to go. What could be more important than government getting out of the way and allowing those Canadians to spend their money as they need to, in order to make ends meet.
In fact, right now, Canadians are actually finding it more difficult than ever before to do that. In large part, that is because of a carbon tax that is applied to everything from home heating to food to the fuel that we put in our vehicles. The Liberal government coming under immense pressure from the Canadian public, knowing that they were having a difficult time being able to afford life, made the decision that it would take the carbon tax off a small portion of people in Canada for a short time. It would hit the pause button and scrap the carbon tax for three years for those who live in Atlantic Canada and use oil heating. However, those who are in my province of Alberta who use natural gas are out of luck. They still have to pay the carbon tax.
We thought we would give the hon. members across from us the opportunity to make this fair for all Canadians, because, of course, choosing a favourite 3% is not fair and it is no way to govern a nation properly. The Conservative Party put forward a motion, and that motion was voted on today. It was a motion that invited all members in this place to vote to scrap the carbon tax for all Canadians, to make it fair from coast to coast to coast, which is what any government should want to do. It should be concerned about the unity of this great country and the economic prosperity of its people.
This place was given an opportunity to vote in favour, with the Conservatives, and to bring that motion into play, which would have saved Canadians thousands of dollars. Instead, the members across the way decided to vote that motion down. They voted to make life more expensive and less affordable for Canadians. They decided that they wanted the carbon tax to be applied to 97% of Canadians, but taken away from 3%. The government across the way determined that its polls were down in Atlantic Canada, and so it needed to show favour to that 3% but the rest could be punished. It is sad.
Parliament, this place, those who sit here were given an opportunity to be on the side of the everyday Canadian person. Instead, Liberals chose to play politics.
The bill that is before us today is yet another opportunity to be on the side of the Canadian people and to make sure that their safety, security and well-being is put first and foremost, which means that more than 10 amendments that were brought forward by Conservative members at committee should have been accepted in order to strengthen this legislation and make it better for all.
Unfortunately, again, the government of the day actually shot those amendments down. While the bill that we debate today makes some minor improvements, and I cannot fault the government for that, I do fault the government for not going all the way and making this bill even stronger. That is very sad. There could have been multipartisan co-operation to strengthen this bill. Again, the government of the day—
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Madam Speaker, the existing committee and the committee of industry before it actually took opportunity to study this issue extensively. In addition to that, there have been other investigations done. What has been found is that at times, there will be state actors that will make an investment in Canada or purchase a business that exists within Canada and do so for the sake of the state actor. It is in their interest, not in the interest of the Canadian people. It is not in the interest in the furtherance of our nation. It is not in the economic interest of Canada. Rather, in this case in particular, it is the Communist Party of China that ultimately will benefit from such a decision. Again, this is where proper review and consultation are so important when we look to allow these foreign investments in Canada.
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Madam Speaker, this is a great opportunity to talk about foreign direct investment in Canada, why it is important and why this legislation is before us.
Our viewers might ask why foreign investment is so important to Canada. There are many reasons that we should be looking to attract foreign investment into our country. Foreign investment provides Canada with the capital it needs to develop its full potential and, yes, that includes our abundant natural resources, such as oil and gas. Foreign investment in Canada is also a source of innovation, allowing Canada to benefit from evolving technologies. As one of the most educated countries in the world, we also use that foreign investment in innovation to build our own technological capacity.
Intellectual property will drive our future prosperity. We had better ensure that this advantage is not squandered by failing to properly review foreign investments.
It goes without saying that foreign investment creates many jobs across our country. Invariably, when a foreign investor makes its investment in Canada, this creates new job opportunities for Canadians. Related to that is the fact that jobs created by foreign investment generate higher wages. At a time when the worst affordability crisis of a generation is raging, when many families are struggling to make ends meet and pay for groceries, schooling, gas and rent, it is important that the jobs that Canadians have available to them also have decent paycheques attached. Foreign direct investment also drives increased productivity, leading to greater prosperity for our country. When foreign investors commit to building our economy, they also increase our tax base, which of course allows governments at all levels to deliver the services that Canadians expect.
Unfortunately, for quite a number of years now, especially since the current Liberal government came to power, Canada's foreign direct investment performance has lagged far behind that of many of its OECD competitors. What I mean by this is that there is more investment flowing out of Canada and being invested in foreign jurisdictions than there is foreign investment flowing into Canada. We actually have a very significant deficit. Why has this happened?
There are many reasons. I will not go into them all, but I will begin with this: Canada is suffering from regulatory gridlock. In other words, regulatory and approval processes at all levels of government are so complex and reflect such an overreach that nobody wants to invest in Canada anymore. We have labour force challenges, heightened uncertainty, deteriorating public finances and increasingly unmanageable debt loads.
By the way, our system is not tax competitive. For years, we have been talking about tax reform, yet over the last eight years, no reform has materialized under the current Liberal government. As a result, it has become too expensive to do business in Canada.
Most recently, the Liberal government decided that not only would it maintain a punishing carbon tax on everything, but it would also quadruple the carbon tax on the necessities of life, the things that Canadians need to survive, such as home heating, natural gas and groceries. Prices have skyrocketed as the Prime Minister ratchets up his carbon tax. Putting gas in the car is becoming prohibitively expensive for many families. He plans to quadruple the carbon tax on fuel for our cars as well.
To make matters worse, while the Prime Minister recently announced that he would temporarily suspend the carbon tax on home heating oil for 3% of Canadians, the remaining 97% of Canadians will receive absolutely no break from the carbon tax on their own home heating costs. I thought he once said, “A Canadian is a Canadian is a Canadian”. It is another vacuous promise from a failed Prime Minister who seeks to divide Canadians and pit them against one another.
The bottom line is this: The world no longer sees Canada as a great place to invest. It is the government's policies, grounded in an ideology that disregards the importance of making Canada a welcome place for foreigners to invest, that is the basis of these problems. We have to get foreign direct investment into Canada right, because it can raise our standard of living and give Canadians, especially young Canadians, the hope that they can live out the Canadian dream.
However, not all investments are necessarily in Canada's best interests. There are benevolent investments that benefit Canada's economy, and then there are investments that are being made by malevolent actors around the world who simply want to take advantage of Canada. As we consider which investments fall into each of these two categories, it is absolutely critical that we make the determination that we are going to focus on Canada's net benefit, on defending our sovereignty and protecting our national security. That is why we are discussing this legislation today.
Bill C-34 simply attempts to update the Investment Canada Act, an act that is quite a number of years old now, but it has not kept up with the changing conditions on the ground, in a rapidly evolving global environment. I would mention that, after eight years, the government has been unable to put in place the kinds of policies and regulations that would actually protect Canadians against their key industries and companies being bought out.
I will give an example. Hytera and its associated company Sinclair Technologies have been charged with 21 counts of espionage in the United States. In fact, President Biden has banned the company from doing business in the U.S. However, in 2017, the Liberal industry minister, Navdeep Bains, refused to conduct a full national security review on the sale of a B.C.-based telecoms company, Norsat International to China-based Hytera, which is banned from doing business in the United States. It was here in Canada buying up one of our companies.
The RCMP awarded a contract to Hytera to supply sensitive hardware for its communications systems. The Canada Border Services Agency has also been using communications technology from Hytera. Members may recall that a few years ago, the industry minister set up some rules about making sure that key Canadian companies, especially within the critical minerals space, would not be bought up by foreign hostile actors, yet that is exactly what happened.
In 2022, the Liberal government fast-tracked the takeover of Canadian lithium mining company Neo Lithium by Chinese state-owned Zijin Mining without a national security review. Every single citizen in China, every single company, whether a state-owned enterprise or otherwise, has a responsibility to report to the government any information it asks for with respect to the business that they carry on.
We want to make sure that this bill does what it is supposed to do. Briefly, this bill would streamline the minister's ability to investigate national security reviews of these foreign investments. It would strengthen penalties for failure to comply with the Investment Canada Act's review provisions. It would create a new power to generate a list of sensitive industries. It would improve coordination with our international partners. It would also vest power to the minister, rather than allowing cabinet to make these kinds of decisions in the first instance.
Would it not be better, instead of having two eyes on this kind of transaction, to have all the eyes of cabinet focusing on whether an investment is in Canada's net benefit or whether it represents a risk to our national security? The bottom line is we tried to get some amendments. To their credit, some members of the committee agreed with us and we actually got four critical amendments passed. However, there were seven other amendments we tried to make, some of which were contained in a unanimous report from the industry committee, and guess what? The Liberals on the committee voted them down.
We can do better, but this is a start.
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Madam Speaker, we are talking about the Investment Canada Act. We are not talking about the Canada-Ukraine free trade agreement.
I will say this, to complete my thoughts. The Investment Canada Act is there to protect Canadians against investments that are not in Canada's national interests. This act would be a small step forward—
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Madam Speaker, at least this question relates, although obliquely, to the Investment Canada Act.
With respect to the Nexen transaction, prior to that point in time, Canada had absolutely no rules about how state-owned enterprises could invest in Canada or if they even should be investing in Canada. When that transaction came forward and cabinet had to review it, we said to hold it because with this transaction, there were no rules for us to be guided by. Therefore, Stephen Harper at that time articulated a clear set of rules for when countries like China or state-owned enterprises from countries like China, Russia and Iran, which are hostile actors, want to invest in Canada. We established the first set of rules for that, and of course, that—
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