Mr. Speaker, I am delighted to be sharing my time with the member for Longueuil—Pierre-Boucher.
I think all Canadians understand the importance of investment in Canada and conversely the investment by Canadian firms in the rest of the world. I also think that Canadians understand the need to develop economic policy in this country that is capable of reflecting a multi-factored and nuanced approach. I think Canadians understand and desire economic policy in Canada that accomplishes a number of goals at the same time, where we create strong value-added industries and good, solid industrial sectors in this country that create good paying jobs on which people can raise their families. I think Canadians want the development of the Canadian economy by Canadians for Canadians and in Canadians' interests.
As well, I think Canadians understand that Canada operates in the global world and that we understand and do seek to have responsible and effective investment by other countries and other companies that operate across the world in Canada. I think everybody agrees with that.
Within that general framework, we have the situation of China. I think all Canadians are starting to recognize the critical importance of that country as a leading major ascending economy in the world. Right now, China has emerged as the second leading economy around the globe. China is of particular importance to western Canada, in particular to my home province of British Columbia where Asia-Pacific trade and economic relations are increasingly important every day.
We know that China has massive foreign reserves. It is sitting on a lot of cash that it seeks to put to productive use around the world. Canada wants to engage and be part of this growth but Canadians do not want the growth to be completely without any kind of rules or regulations and to be pursued blindly without consideration for how that economic integration with China can be most effective in developing the Canadian economy.
Canadians also have a very sharp appreciation for the importance of Canada's non-renewable resource sector. We know that we are blessed with many resources that are non-renewable, from minerals to oil and gas. We know that is an important part of our economy. Canadians know that this resource is a strategic one. It is a critical domestic asset. We live in a country that is cold and we require natural gas and other substances to heat our homes, so we know that oil is a very valuable commodity.
The proposed takeover of a major Canadian oil sector, in this case Nexen, by the foreign company CNOOC, a state owned Chinese company, is of major importance to Canadians. It not only raises questions of foreign ownership of Canadian strategic assets but it also raises the larger question of what Canadian policy should be toward foreign takeovers of Canadian companies generally.
Therefore, the New Democrats are very pleased to have put before Parliament today a motion that reads as follows:
That, in the opinion of the House, the government: (a) should not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations; (b) should immediately undertake transparent and accessible public hearings into the issue of foreign ownership in the Canadian energy sector with particular reference to the impact of state-owned enterprises; and (c) must respect its 2010 promise to clarify in legislation the concept of “net benefit” within the Investment Canada Act.
When we read those words, I would respectfully venture to say, they are impossible to disagree with. How could anyone in Canadian Parliament, from any party, oppose a review of the takeover of major Canadian strategic oil company assets by a foreign state-owned company without having involvement and input from the public and the stakeholders of our country?
Who could possibly be opposed to clarifying, not only for the Canadian public but for investors around the world, the concept of “net benefit” when that phrase is contained within the body of our legislation? Who could oppose having clearly defined criteria so that investors know what the ground rules are when we are considering a foreign takeover of a Canadian asset? It will be interesting to see whether the Conservatives oppose that.
As a little background, in July 2012, CNOOC, which is a majority Chinese state-owned enterprise, made a $15.1 billion takeover bid for Nexen, which is Canada's twelfth largest oil company. This is the largest proposed foreign takeover by a state-owned enterprise in Canada's history. It is the first in a likely wave of similar major acquisitions.
Nexen has 300,000 acres of oil sands assets, including an upgrader at Long Lake, as well as interests in a further 300,000 acres in shale gas assets. That is an estimated 37 trillion cubic feet of gas in northeast British Columbia.
The Chinese government owns almost 65% of CNOOC and it names the chair, vice-chair and other key directorship positions, giving the Chinese state significant influence over major decision making. This deal would give state-owned CNOOC full control of a Canadian company with significant oil sands reserves, as well as offshore oil assets in the U.S., Gulf Coast and North Sea.
In an attempt to win approval CNOOC has made some promises. It has promised to make Calgary the headquarters for CNOOC Ltd.'s North and Central American operations. It has promised to retain Nexen's current management and employees, to increase capital spending on Nexen's assets, to list CNOOC shares on the TSX and to maintain Nexen contributions to community and social commitments. Those are laudable promises.
Here is what CNOOC has not promised. It has not promised to maintain or increase value-added processing jobs in Canada, to improve environmental performance or to place Canadian interests ahead of those of its state owners.
Given the serious concerns that this deal raises, New Democrats are calling on the government not to oppose the deal at this point but to conduct open public hearings before making a decision on the deal. Both the business sector and Canadian workers in communities need certainty when it comes to foreign takeovers, but the current review process lacks transparency and accountability.
The current Investment Canada Act mandates that important transactions, currently over $300 million, be reviewed. The Conservatives want to raise that threshold to $1 billion, meaning many more transactions and takeovers of Canadian companies would occur without any government review whatsoever. However, these transactions must be reviewed by the Minister of Industry to determine whether they present a net benefit to Canada.
Again, the concept of “net benefit” is not clearly defined in the act. In 2010 in the wake of the rejection of the BHP Billiton bid for Potash Corp., the then-industry minister promised to clarify the meaning of “net benefit”, but has yet to do so, notwithstanding the fact that the government has had two years to do it.
In 2010, the Conservative government unanimously supported an NDP motion calling for a more transparent investment review process, including mandatory public hearings with affected communities and public disclosure of all conditions attached to approval of a takeover, along with enforceable penalties for non-compliance. The Conservatives have failed to live up to that promise as well.
I also want to comment a bit about domestic investment. The current Minister of Trade has said that it is important to attract foreign investment to Canada. Right now we have $500 billion of domestic Canadian investment sitting on the sidelines.
I suggest that the government do two things: work on policies devoted to getting that Canadian domestic investment capital to work in the Canadian economy, and start keeping the promises it made in 2010 to the Canadian people to actually bring public, full, transparent review to these important economic decisions that affect all Canadians and the future of the Canadian economy.