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Member of Parliament

Marty Morantz

  • Member of Parliament
  • Member of Parliament
  • Conservative
  • Charleswood—St. James—Assiniboia—Headingley
  • Manitoba
  • Voting Attendance: 65%
  • Expenses Last Quarter: $99,486.97

  • Government Page
Context: House Hansard - 163 - Feb/17/23
Mr. Marty Morantz (Charleswood—St. James—Assiniboia—Headingley, CPC)
  • Feb/17/23 10:32:17 a.m.
  • Watch
  • Re: Bill C-34 
Mr. Speaker, I will be sharing my time with the hon. member for Northumberland—Peterborough South. In December 1973, Parliament enacted the Foreign Investment Review Act, which was known as FIRA, to deal with the issue of foreign investors controlling Canadian industry, trade and commerce, and the ability of Canadians to maintain effective control over their economic future. These investments would be allowed to proceed only if the government had determined that they were, or were likely to be, of significant benefit to Canada. This net benefit test still exists today, but much has changed given rising national security concerns that necessitate new measures. Let me elaborate. In June 2017, Hytera Communications, a company owned by the Chinese Communist Party, acquired Norsat International, a B.C. telecom company. Just like that, a firm backed by an authoritarian regime took over an essential service provider here in Canada. One would think this takeover would have raised some red flags, but it did not, not for the Liberal government at least. If it had acted rationally, the government would have conducted a national security review into Hytera. However, after eight years in power, it is clear that rationality is in short supply these days. It did not bat an eye when, as all of this was taking place, our own Border Services Agency was using equipment from Hytera. We are talking about a company that has been charged with 21 counts of espionage. That company has been banned from doing business with our neighbour to the south. Up until that point, the Liberals have said that business is business, even when it means letting a hostile regime gain access to our essential services. This sort of lax attitude toward issues of national security is clearly a problem. What is even more problematic is that for five long years after the Hytera fiasco, the government has not learned from its mistakes. In 2020, it gave out a contract to Nuctech, a company founded by the son of a Chinese Community Party secretary general. It would not have taken a national security review to figure out who the company's founder was. A quick Google search would have sufficed. It was not just standard, run-of-the-mill work that this company with Chinese Communist Party connections was doing. Nuctech was supplying X-ray equipment, of all things, to almost 200 Canadian embassies and consulates. Two years ago, it looked like the government was changing its course when it updated its national security review guidelines. This was not the case, or at least it certainly was not the case when the Minister of Industry greenlit the takeover of a Canadian lithium mine by a Chinese state-owned enterprise. Once again, the opportunity was right there. The minister could have requested a national security review. The review framework was even new and improved, or so they would have us think. However, the minister did not act. Delays, half measures and slaps on the wrist. Those have been the Liberal responses to national security threats throughout the past eight years. Huawei is a perfect example of this. By 2021, each and every one of our allies within the Five Eyes had already banned Huawei from using their 5G networks. For years, my colleagues and I have been calling on the government to do the right thing: Listen to our allies, listen to security experts and ban Huawei from accessing 5G. Reluctantly, and far too late, the Liberals finally took our advice and took a stand against the Chinese Communist Party. That was less than a year ago. With the Liberal government's dismal track record in matters related to national security, Bill C-34 feels like too little, too late. It is like the goalie letting in eight goals, then coming onto the ice at the last minute and saying, “Don't worry guys. I've got this.” To be fair, this bill does address Canada's national security. It is a policy area where the government has been complacent for far too long. For that reason, I am prepared to support the bill at this stage, as long as it can be strengthened in committee. For a while, a lot of us had the naive idea that these regimes were emerging partners, and they were slowly moving toward the democratic norm. Putin's war changed all of that, and it is time that Canada acted accordingly. It is time for a reality check. Hostile foreign governments want to subvert and undermine this country. The threat is real and the threat is here. Canadians are well aware. A few weeks ago, all that Canadians had to do was look up and see a Chinese surveillance balloon flying at 60,000 feet. Bill C-34 responds to this new reality, but not well enough and not in its current form. The bill puts the power to request national security reviews in the hands of the Minister of Industry, the same minister whose predecessor did not even request a security review when Hytera took over an essential Canadian telecom provider. It is the same minister who, even after strengthening the security review guidelines in 2021, chose not to investigate the Chinese takeover of a critical Canadian mining company. The bill is only as strong as the minister's scrutiny, whoever that minister may be in the future. Conservatives believe matters of such importance should be scrutinized by all of cabinet to make sure nothing slips through the cracks. There are also existing problems with the Investment Canada Act that are not even addressed in Bill C-34. For no apparent reason, when a state-owned enterprise invests in a Canadian company, a national security review is only triggered if the Canadian company has assets worth more than $454 million. This provision has it all wrong. It is not about the size of the company that is being acquired. It is about the security risks that would inherently arise when a hostile state-owned company gains control over a critical service or product here in Canada. Bill C-34 needs a provision that would trigger an automatic national security review when a state-owned enterprise invests in Canada. The threshold should be zero dollars, not $454 million. Also, the bill would only deal with share purchases and non-asset purchases. Therefore, in theory, there is a roundabout way that foreign investors could acquire assets in Canada and completely circumvent the legislation. It is clearly a loophole that needs to be plugged. Since 2017, Chinese companies have been governed by the national intelligence law. This law compels every citizen and every company to hand over data to Chinese intelligence agencies. For almost six years, so much Canadian information has gone to China's autocratic government that it is hard to even quantify. We need to put an end to this, but right now, Bill C-34 would not do that. Bill C-34 needs a presumption against allowing the takeover of Canadian companies by China's designated state-owned entities. It needs a reformed net benefit test to better account for the potential effects of a transaction on the broader innovation ecosystem, with a particular focus on protecting intellectual property and human capital. It needs automatic review of transactions involving sensitive sectors, such as defence, artificial intelligence and rare earth minerals. It also needs a mandatory national security review for state-owned enterprises where national security is a concern. The act would not attempt to change definitions of state-owned enterprises or look at the issue of what constitutes control. One would not have to buy 50% of a company to control it. Someone could buy small percentages of it, get a number of seats on the board or change management, which Hytera has done. It is clear that Canada needs to improve these protections. Bill C-34 would be a small step in the right direction, but much more needs to be done.
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