44th Parl. 1st Sess.
November 9, 2023 10:00AM
Madam Speaker, it is great to take the floor in the most honourable House to speak to a very important topic, Bill C-34, the Investment Canada Act modernization.
Before I get into my formal remarks, perhaps it is a coincidence, although I do not think so, that this morning the OECD released its foreign direct investment numbers, and Bill C-34 deals with foreign entities investing in Canada, Canadians and our communities. Canada came third in the OECD ranking for the first half of 2023. First is the United States, then Brazil, ourselves and Mexico. I think that speaks not only to the confidence of foreign entities, companies and corporations investing in Canada, creating jobs, wealth and great futures for Canadians, but also to what I would say is the idea that confident governments invest in their people and their communities. That is something we, as a government, have done since 2015 with respect to the Canada child benefit, the Canada workers benefit, the implementation of an early learning and national day care plan, the support for students by eliminating interest on student debt, and the two middle-income tax cuts: the first in 2015 from 22% to 20.5%, with roughly $3 billion to $4 billion a year, depending on tax filings, in savings for Canadians, and raising the basic personal expenditure amount to $15,000, which in the fiscal year 2024-25 will deliver over $6 billion in savings for Canadians from coast to coast to coast. Confident governments invest in Canadians and Canadian communities.
I am grateful to hon. members, my esteemed colleagues, for giving me the opportunity to speak to Bill C-34, an act to amend the Investment Canada Act.
So far, the House of Commons has voted unanimously in favour of these objectives. The bill has been thoroughly studied by the members of the Standing Committee on Industry and Technology. We encourage the House to send this bill to the Senate for consideration. Everyone already knows that this legislation plays an important role in our economy and helps make Canada a destination of choice for foreign investment.
Foreign investment in Canada is booming. We have seen it in the auto sector, the mining sector, the food processing sector, the agriculture sector and so many sectors across this country, because Canada is a destination of choice for foreign investment. It creates jobs. It creates futures.
The act helps create business-friendly conditions based on a stable and clear set of regulations.
We need a stable and clear system in place to attract foreign investment, and Bill C-34 would do exactly that.
The act encourages economic growth and employment. It provides for intervention only if an investment is potentially harmful to Canada's national security, but it also permits quick action and judgments as circumstances warrant. That is what we intend to accomplish through the amendments made by Bill C‑34.
The time has clearly come to modernize the Investment Canada Act and bring it in line with the times. Our industries are still some of the most dynamic in the world. However, Canada is confronting unprecedented geostrategic and national security challenges.
Indeed, Canada remains a destination of choice for foreign investment. It continues to grow and to create good middle-class jobs from coast to coast to coast. This investment helps businesses prosper and grow, creates good-paying jobs and ensures strong economic growth that benefits all Canadians. Canada has a long-standing reputation for welcoming foreign investment and a strong framework to promote trade while advancing Canadian interests. In fact, Canada has one of the earliest and most robust screening processes for foreign direct investments. The Investment Canada Act, the ICA, was enacted 38 years ago, in 1985. The act allowed the government to review significant foreign investments to ensure that these benefits exist. It was updated in 2009 to include a framework for a national security review of foreign direct investments.
The world in which Canada now operates is increasingly characterized by the complexity of linkages between economic competition and the geostrategic clashes. We see it on a daily basis. Globalization has brought new threats to Canada's national and economic security, but of course many benefits also. Canada must have the tools and resources to protect its assets from economic threats to national security when those are deemed so. The Investment Canada Act must, therefore, also continually adapt to these considerations. The complexity of these dynamics can be seen in the increased volume of activity under the act in recent years. Indeed, there have been more national security reviews since 2020 than in the entire previous decade. The review process is also increasingly complex as international transactions and ownership structures are increasingly becoming more complicated and, in some locations, more opaque.
The proposed modernization of the Investment Canada Act is designed to make the review process more efficient and transparent. Bill C-34 sets out a series of amendments to improve the national security review process of foreign investments and to modernize the Investment Canada Act. Collectively, these amendments would be the most significant legislative update of the act since 2019. These amendments also represent one of the multiple steps the government has taken to ensure that we can defend our economic interests, contribute to global supply chain resiliency and protect our national security. This, in turn, would help us to attract stronger partnerships with our allies to foster economic growth. A stronger foreign investment regime attracts good, beneficial investments into Canada, ones that would create high-quality jobs and opportunities for all Canadians. We have seen this with the $7-billion investment by Volkswagen and the multi-billion dollar investment by Stellantis. We see it with Honda and Toyota, in Alliston and Cambridge, where they continue to invest hundreds of millions of dollars, and billions of dollars initially, in creating quality good-paying jobs for Canadians here in the province of Ontario, with a supply chain that stretches from coast to coast.
Defending our economic interests and protecting our national security interests are of critical importance, especially in the current climate of rapidly shifting geopolitical threats. This issue is a non-partisan one. During the six sitting days that Bill C-34 was debated, the House has repeatedly stressed the need to modern the ICA to achieve those objectives. The House ultimately decided, in a unanimous vote, to refer the bill for study, because we all recognized how important it was to get these amendments right so we can protect national security while ensuring that we are not chilling useful, good investment.
Canada's foreign investment regime must adapt to the speed of innovation, which we know moves very quickly these days. In recent years, intangible assets in the knowledge economy, like intellectual property and data, have grown in importance in defining Canada's economic strengths and, at the same time, pose new challenges in terms of how these are to be managed in order to ensure that the benefits occur to Canada and Canadians. The government recognizes the value of the intangible economy, its growth and the relevant opportunities for all Canadians, particularly in artificial intelligence and intellectual property. These new innovations are driving new ways of doing business, with huge opportunities for Canadians. The government will support this growth as it helps drive Canada's economy and supports highly skilled, good-paying jobs.
It is great to see the city of Montreal become a cluster for artificial intelligence, with a number of companies investing in that city. It is great to see the Kitchener-Waterloo corridor here in Ontario continue to be the leader in the tech sector. It is great to see the city of Toronto continue to see the investments from domestic and foreign firms in fintech, and so many other types of businesses in this knowledge economy, but to do so—
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Madam Speaker, I sit on the industry committee with the hon. member, and I appreciate his intervention. We will always talk about the Investment Canada Act and how foreign companies are investing into Canada and creating good-paying, middle-class jobs for Canadians from coast to coast to coast. That is what I am doing in my speech this morning.
Tools such as the Investment Canada Act must also be modernized to offer additional protections in light of changing geopolitical and technological advancements and to prevent hostile actors from exploiting Canada's expertise and capacity for innovation. We must all be aware of geopolitical risks, and that they and instability are now fixtures in our operating environment, especially for businesses. Hostile state and non-state actors pursue deliberate strategies to acquire goods, technologies and intellectual property. They do so in ways that are fundamentally incompatible with Canada's interests and principles. We also know that foreign investments can be used as a conduit for foreign influence activities that seek to weaken our norms, values and institutions.
Members will recall that the Investment Canada Act played an important role in Canada's response to the Russian invasion of Ukraine. As early as March 2022, we issued a policy statement saying that any investment, controls or influence by the Russian State will also support a determination by the minister that there are reasonable grounds to believe that such an investment could be injurious to Canada's national security, regardless of its value. The statement sends a clear message about our commitment to protecting Canada's economic security from unwanted investment. Moreover, Canada's Indo-Pacific strategy is clear that the region will play a critical role in Canada's future over the next half-century. The significant opportunities for economic growth in the region are also accompanied by challenges related to the objectives of certain world powers that do not share our democratic and liberal principles.
We must respond to this reality in a number of ways, including in the way foreign investment is assessed and examined. In short, the Investment Canada Act plays a key role in protecting Canada's economic interests from hostile foreign actors. It is broad in scope and allows Canada to respond to changing threats that may arise from foreign investment, while protecting Canada's openness to beneficial international investment.
Again, I would like to say that this morning, the OECD stated its numbers for foreign direct investment in Canada, which OSFI operates through the Investment Canada Act to a large degree. Canada, for the first half of this year, came in third place behind the United States and Brazil. That is all the OECD rankings of over 30 countries. We are on the right path of continuing to grow the economy, attracting foreign investment from all over the world, along with our domestic companies investing. The act is broad in scope and allows Canada to respond to changing threats that may arise from foreign investment, while protecting Canada's openness to beneficial international investment.
The package of amendments proposed in this bill is designed to assure businesses and investors that Canada has a clear, predictable and stable regulatory regime. The nexus between technology and national security is clear and is here to stay. Rapid technological innovation has provided Canada with new opportunities for economic growth, but it has also given rise to new and difficult policy challenges.
More and more, Canada is being targeted by hostile actors. That threatens both our national security and our prosperity. Our government must therefore adapt our tools to more effectively defend us against current and future threats.
All around the world, foreign investments are now coming under much closer scrutiny from a national security standpoint, also considering various factors such as the impact of the COVID-19 pandemic, the repercussions of climate change on security, global supply chain disruptions and changing geopolitical considerations.
We are equipping ourselves today to face the threats of tomorrow. Canada will remain a destination of choice for foreign investment.
Now, more than ever, we need to make sure we are doing everything we can to foster an innovative, healthy and growing economy. The guidance and decisions issued over the past several years make clear that some transactions, particularly those by state-owned or state-influenced investors, may be motivated by non-commercial interests and imperatives that could harm Canada's national security.
I will repeat that these types of investments in sectors deemed sensitive currently face enhanced scrutiny under the Investment Canada Act. Our government believes that an effective review regime must be robust, transparent and flexible to adapt to a changing world and now is the time to make these changes. I believe the last changes were made in 2009. That is why we stand today to vote in favour of this bill, which represents the most significant amendments to the ICA since 2009.
We are making important moves now to review and modernize key aspects of the act while ensuring that the overreaching framework to support foreign investment to grow our economy remains strong, open and, I would add, flexible. Our record as a government makes it abundantly clear that where national security is concerned, we will not shy away from decisive action. Our assessment of risk keeps pace with evolving economic and geopolitical circumstances.
The ICA already gives us much of the authority we need to intercede and address national security risks that can arise from foreign investments. These amendments build on a strong foundation and will improve the mechanics around national security review of investment. Now is the time to act decisively so that we can make sure that Canada will continue to gain the economic benefits of investment while strengthening our ability to address threats to our country and ensure its future prosperity.
We recognize that Bill C-34 has undergone a rigorous, robust study spanning across 11 meetings. I applaud the members of the industry committee on this process. During those meetings, we heard from a variety of legal and subject-matter experts, who testified about the benefits that foreign direct investment has on Canadian businesses, the importance of protecting Canada's intellectual property and the need to ensure a regime that is capable of tackling the emerging national security challenges that Canada and our security partners are facing in the liberal democracies of the world.
We have engaged meaningfully with opposition members to discuss their perspectives and concerns and have worked collaboratively to bring new amendments that will further strengthen the bill. We have worked together to ensure that Canada's foreign investment regime continues to be the gold standard.
Bill C-34 will provide us with better tools to protect our national security. It will also help to bring Canada into greater alignment with our international partners and allies. My colleagues heard from witnesses at INDU about how important it is for Canada to have a regime comparable to its allies. Having a comparable regime helps to address common threats and maximize our collective effectiveness.
We all know that the amendments proposed in Bill C‑34 will contribute to that important balance. We have to protect Canadians and Canadian businesses while ensuring that investors continue to see Canada as a destination of choice.
Yes, Canada is the first destination of choice for foreign investment.
We know that Canada and our allies share similar national and economic security concerns. Our allies are concerned with threat actors operating in multiple jurisdictions to secure a monopoly in critical access in technology. We see that with critical minerals. It is becoming increasingly more important to share information with allies to support national security assessments to prevent these threats from happening.
This new information-sharing authority strengthens co-operation between Canada and other like-minded countries to defend against an investor that may be active in several jurisdictions seeking the same technology, for example, and having motives ill toward. That said, Canada would not be obligated to share such information where there are confidentiality or other concerns.
I want to thank my esteemed colleagues for their attention today. I can assure members that our approach is pragmatic, principled and collaborative. It provides a solid framework to address evolving geopolitical threats while allowing Canada's review regime to be more aligned with our international allies and in the interests of Canadians. The collaborative efforts during the INDU committee ensure that we meet these goals, which is why I believe that this bill, as amended, should be adopted and referred to the Senate.
We are confident that with Bill C-34, Canada will continue to encourage positive investment that will grow our economy and create good jobs in all ridings across Canada. I do not think there is a riding in Canada that does not have some form of foreign direct investment in it or that is not affected by foreign direct investment. It should always be done in a positive, long-term and sustainable manner without having to compromise on national security. We know that in today's world there are actors, foreign-state actors and non-state actors, who have ill intentions towards the liberal democracies of the world, including our blessed home here in Canada, and so we need the best of both worlds.
I hope all of us can work together to stand for Bill C-34 to get it to the Senate for further study and make this bill law to strengthen Canada's economic and national security.
It has been a pleasure to speak to this bill this morning. It was great to see the OECD comment with respect to Canada's reputation for foreign direct investment and coming into third place for the first half of the year. We have seen flows in foreign direct investment via countries across the world, with Canada being increasingly the destination of choice. There are the Volkswagen investment and the Stellantis investment, as well as Honda, Toyota and other entities. There are investments in Kingston, investments in Northvolt in Quebec and investments in B.C. that are happening. Across the board, we see foreign companies choosing Canada to invest their dollars for their shareholders to create wealth here in Canada. It is something that is great to see. We need to encourage it from all sides of the House.
I thank hon. members for their attention this morning. I look forward to hearing their questions and comments.
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Madam Speaker, Cariboo—Prince George is a beautiful part of British Columbia in our blessed nation.
It was great to see that in total, eight amendments were adopted during the committee study of the bill, with four of them being from the official opposition. That is something we can all applaud with respect to where there was collaboration.
In terms of how far the bill goes and does not go, I do want to put on the record this morning that independent of where the investment is coming from, whether it is from Russia, China or any other state actor or non-state actor, all investments will be reviewed if they need to be. In terms of the minister, there will be more added flexibility because the minister would take a look at it rather than it being a Governor in Council decision. That also would provide flexibility.
There are a number of improvements in this bill. It is a vast update from the 2009 iteration. It is great to see that this has happened. I would say, in my humble view, to the member for Cariboo—Prince George that there was a lot of collaboration. I see that now, sitting on the industry committee with my colleagues from all parties, and it is great to see that we continue to go forward in the same manner on other pieces of legislation.
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Madam Speaker, I appreciate that very pertinent and direct question.
I believe that amendment was adopted and it has relevance to what the hon. member was referring to in order to ensure that we examine any effects of any rights related to intellectual property where their development was funded by the Government of Canada. I believe that is one of the tangents that the hon. member is asking for.
Intellectual property in itself is something very important in today's world. Intellectual property, in terms of patents being put in place in different jurisdictions, has different effects. We know that intellectual property is something that we always need to examine. It is changing rapidly, and we need to have a regime in place here. One process is with the Investment Canada Act which directly examines this, because it is very important for our national and economic security.
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Madam Speaker, in terms of Canada's relationship with our Five Eyes partners or groups, we have a very robust relationship. It is a very strong relationship. It is a relationship that has existed for many years, and I would say decades. It is a relationship where day to day, people working for the Government of Canada, our security and defence apparatus, are in contact with their pertinent peers. It is something that all governments need to value and respect. We know that. Canada is at the table on a multilateral basis in many organizations throughout the world.
In terms of the question that the hon. member had about a review of investments, when we examine foreign direct investments we must have the mindset where we do not put in place exemptions. We obviously understand who our allies are in the liberal democracies of the world, whether it be the United States, Australia, the U.K., or other countries, but putting in place exemptions, I personally feel, is not the right way to pursue the legislative process in the Investment Canada Act. It must be broad enough to handle certain unique situations, but it must be focused in a place so that if investments are coming from state and non-state actors, the process is robust, with the capacity to review them for national security and economic considerations.
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Madam Speaker, I would like to thank my colleague for his very important question. Foreign investment is vital to our economy, our national security and our future. We are talking about the future of our constituents.
When we examine foreign direct investment in Canada, it is very important that this modernized bill, Bill C-34, come through. The last time the ICA was reviewed was in 2009. The economic world and the technological world have changed greatly since 2009. We need this bill to move forward.
The collaboration that was seen at the industry committee was very important. It was great to see. We continue to move forward on this bill, which is in the interests of all Canadians and our economic future.
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Madam Speaker, we are not soft on Russia in any manner. Investments that come from China, Russia or any other state or non-state actors are all reviewed very judiciously and diligently by the folks covered under the Investment Canada Act, and they will continue to do so. We need to ensure that the intentions of people investing in Canada are in our national security interest and that they will help their shareholders in their creation of wealth and so forth.
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