Finance Committee on May 28th, 2013

[Peggy Nash, NDP, Parkdale—High Park, ON]

I think I understand what the member is aiming for here, but our concern has to do with raising the threshold for enterprise value to $1 billion. We think the threshold should remain at $344 million, and that this should be indexed to inflation. We're not in favour of raising the threshold.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

I will go to the vote.

It's listed as amendment PV-5.

(Amendment negatived [See Minutes of Proceedings])

Is there discussion on clause 137? Can I go to the vote or a discussion?

[Raymond Côté, NDP, Beauport—Limoilou, QC]

I'd like to speak.

[The Chair, Conservative, James Rajotte]

Is there discussion?

Monsieur Côté.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Thank you, Mr. Chair.

I won't repeat everything my colleague, Mr. Caron, said, but he mentioned a case that was similar to a situation that happened in my riding of Beauport—Limoilou. The White Birch Paper mill in Stadacona was acquired in 2003 by a foreign investor. It had 1,600 employees at the time; today, there are fewer than 300. The employees, workers and pensioners alike, lost nearly half of their pension fund because of what the so-called investor did.

I would like to remind everyone on the committee that, underneath it all, the market works. But what matters most is not whether it works, but how it works. Once you understand how it works, it is especially important not to lose sight of the fact that the free play of competition is quite easily hampered by a variety of factors, both internal and external.

These are investors. One of the reasons for reforming the Investment Canada Act is, unfortunately, the fact that there are serious flaws and a huge competition problem between investors, or so-called investors, that the act doesn't address in the least. These thieves have no trouble getting their hands on our companies and preventing legitimate investors, both Canadian and foreign, from doing business in Canada. So it's a matter of protecting not only workers and community interests, but also business interests. So the Investment Canada Act needs to be reformed.

Unfortunately, what the government is proposing will make the process symbolic, at best, and virtually eliminate it, at worst. My colleagues in the New Democratic Party share my opinion. And that is one of the reasons why we oppose clause 137. We are concerned about protecting Canada's economic development and interests.

Thank you.

[The Chair, Conservative, James Rajotte]

Okay, thank you.

Ms. Nash?

[Peggy Nash, NDP, Parkdale—High Park, ON]

I want to speak further about the importance of having a strong review of foreign takeovers.

Of course we want investment when it creates jobs in Canada, when it stimulates the economy, but far too often we've seen foreign takeovers that have resulted in a net loss of jobs, so one has to ask, where is the net benefit to Canada? Given that there is currently no test in the legislation for a net benefit to Canada, I think many thousands of people, certainly in my province of Ontario, and in other places across the country, would argue that their lives have materially not benefited from a foreign takeover.

I want to refer to one case very specifically, which is Electro-Motive owned by Caterpillar, in the London area. Caterpillar took over a company that was 64 years old, a company that had been profitable, by the way, and that the Prime Minister had visited and championed investment in, and then allowed it to be taken over by a foreign company. Almost immediately, the company said they were going to cut wages in the workplace by 50%—that's 50%—and then locked out the workers in that plant, who naturally refused to comply. Then, the day after right-to-work legislation was passed in the U.S., just across the border, they shut down the plant—after months of these people being on lockout—and moved the facility to the U.S. In essence, Canada lost a very productive and profitable company that had been in operation for more than 60 years.

Of the vast majority of people who worked in that facility—where there were more than 500 good-paying jobs, family supporting jobs—fewer than 20 people were able to relocate to other parts of the country to work there because of family commitments or roots in their community. Most of the others have found very low-paid, precarious jobs that certainly have dramatically reduced their lifestyle.

One has to ask: where is the net benefit to Canada when we allow these kinds of foreign takeovers, with no transparency and no clear rules, that clearly have not benefited the people involved, the workers, the communities, the spinoff businesses that have been involved and linked to a company like this? Again, we're talking about a company that was profitable.

This government is no different from the previous government, because they were asleep at the switch in allowing all these foreign takeovers. In all the many thousands of foreign takeovers that have taken place in this country since the Investment Canada Act came into being, I believe only two have been blocked. Many of the rest resulted in this kind of negative impact for working people in communities across this country.

I think this government is letting Canadians down. It professes to support jobs and growth, but it's not protecting jobs, and it is undermining the prosperity of many communities that rely on these good-quality jobs.

I could go on at length, Mr. Chair, and I know I'm testing your patience, but I do feel very passionately about this and I just wanted to make those points.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Ms. Nash.

(Clause 137 agreed to)

We have NDP-11, new clause 137.1.

I’ll ask Ms. Nash to move that.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Okay. I think that's....

[The Chair, Conservative, James Rajotte]

NDP-11.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, I can speak to that.

The shortcomings in the Investment Canada Act identified by my colleagues, Ms. Nash and Mr. Côté, and myself included poor transparency, a lack of accountability and problems with the decision-making process. In fact, we don't really know what criteria the Minister of Industry uses. We have no idea what the justification would be for granting a request or denying one. And yet, a decision is made.

What's more, where we get into even more trouble with the Investment Canada Act is the fact that the federal government's decision has a direct impact on the community concerned. That decision is made, however, without any regard for what the community might think of the investment. The U.S. Steel case raises concerns that are specific to Hamilton, among others. We could also look to Sudbury and other places, as well as Quebec.

The new clause proposed in this amendment requires the minister to consider all requests and representations made by communities, trade unions, employees and anyone at the local level who would be affected by a potential takeover.

In short, what we're trying to do through this amendment is give a voice to those directly affected by the takeovers.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Caron.

I have a ruling on this amendment as well.

This amendment seeks to amend section 19 of the Investment Canada Act.

House of Commons Procedure and Practice, second edition, pages 766 and 767, states:

...an amendment is inadmissible if it proposes to amend a statute that is not before the committee or a section of the parent Act, unless the latter is specifically amended by a clause of the bill.

Since section 19 of the Investment Canada Act is not being amended by Bill C-60, it is inadmissible to propose such an amendment.

Colleagues, may I call clauses 138 to 140, since there are no further amendments on clause 138?

[Peggy Nash, NDP, Parkdale—High Park, ON]

We just dealt with an amendment that was deemed inadmissible. In a previous ruling of the chair, there was an amendment of ours that was deemed inadmissible on the grounds that it would increase the cost—

[The Chair, Conservative, James Rajotte]

It had to do with the royal recommendation.

[Peggy Nash, NDP, Parkdale—High Park, ON]

Right.

[The Chair, Conservative, James Rajotte]

I know what the point of order is going to be.

Ms. Nash, as you know, rulings of the chair cannot be debated; they can only be challenged. You can either challenge it or not challenge it. We can't debate it at committee.

Thank you.

[Guy Caron, NDP, Rimouski-Neigette—Témiscouata—Les Basques, QC]

Mr. Chair, I'm not trying to get into a debate. I would simply like more clarification on why the amendment was ruled inadmissible.

[The Chair, Conservative, James Rajotte]

The chair has given his ruling, so the opposition can either challenge the ruling or not challenge the ruling. This ruling is exceptionally clear. Also, legislative clerks were made available some time ago, to all the parties, to help with the drafting of amendments.

Mr. Jean.

[Brian Jean, Conservative, Fort McMurray—Athabasca, AB]

If the member was going to challenge the chair, it should have been done at the time of the ruling, not now. In my opinion, based upon the rules we are governed by, it's too late.

[The Chair, Conservative, James Rajotte]

Thank you.

(Clauses 138 to 140 inclusive agreed to)

(On clause 141)

I have amendment PV-6.

I'm going to go to Ms. May for a minute.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Thank you, Mr. Chair.

It's nice being PV—it's Parti vert, Green Party, amendment 6.

I want to put on the record that I'm presenting this amendment at the finance committee without prejudice to rights that I would have had at report stage, as a member who is not a member of this committee and who does not have an equal opportunity before it.

This amendment is critical. We go back to the 2008 report of the Competition Policy Review Panel, in which they found:

The panel believes that it is in Canada's interests in a post-9/11 world to have in place an explicit national security test to support its trade and investment policies.

The 2009 amendments to the Investment Canada Act failed to put in place a clear test and definition. When I had the opportunity to ask questions of witnesses from Industry Canada, on May 21 at the industry committee, they agreed that it was to our detriment that there was no study within Canada that would show an explicit test. They told me that the U.S. test exists.

I went to the U.S. test, found under the U.S. Foreign Investment and National Security Act, and adapted it to Canada. You find it before you in Green Party amendment 6. We need to be able to test an SOE's interest in Canada against an explicit national security test.

Thank you, Mr. Chair.

[The Chair, Conservative, James Rajotte]

Thank you.

On this I have Mr. Rankin and Mr. Brison, please.

[Murray Rankin, NDP, Victoria, BC]

Thank you, Chair.

I just want to speak in favour of this amendment. My colleague Ms. Nash spoke about the need for a definition of net benefit, and I entirely agree with my colleague Ms. May that we need to have a definition of national security factors. I can say this as someone who has served as the legal adviser to the Security Intelligence Review Committee for many years and was recently appointed by Mr. Nicholson to be the special advocate under the Immigration and Refugee Protection Act dealing with national security matters.

Of course, under the CSIS Act there is a very clear, cogent definition of threats to the security of Canada, which is the holy grail, the bible, for those doing work in this field. I thought the definition that was provided, 11 factors and a basket clause, was entirely appropriate and useful, and I really speak in favour of the need for such a definition.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Rankin.

Mr. Brison, please.

[Scott Brison, Liberal, Kings—Hants, NS]

I'd like to propose a friendly amendment to amendment PV-6 that makes it clear what the minister can consider is not limited to these specific areas. I would propose that in the amendment, whether it says:

the factors to be taken into account by the Minister in making a determination whether an investment could be injurious to national security include

these words be added:

but not be limited to