Mr. Speaker, I am pleased to rise in the House today to speak to the motion put forward by the NDP's natural resource critic, the member for Burnaby—New Westminster. Specifically, the motion calls on the government to delay making a decision on the proposed Nexen takeover by Chinese state-owned firm CNOOC until such a time as full public consultations are conducted. It also calls on the government to initiate a broader consultation process on the issue of foreign ownership in the Canadian energy sector, with particular reference to the impact of state-owned enterprises. Finally, it calls on the government to respect its 2010 promise to clarify in legislation the concept of net benefit within the Investment Canada Act.
The clock is ticking, and the Conservative government stubbornly continues to study Nexen's takeover behind closed doors. Since July, New Democrats have repeatedly called for public hearings to study the ins and outs of this important transaction that would allow foreign interests to take over a portion of our oil sands, in a way that is transparent. But the Prime Minister and his inner circle have ignored our requests. We are now into the final stretch, and with this motion New Democrats will try once again to make the government listen to reason as well as the concerns of many citizens, experts and businesspeople.
We all know that Canada was built for trade and that foreign investment can play a positive role in building and strengthening our economy, if done right. Yet the Conservative track record on foreign investment demonstrates a lack of foresight, and the experience in my community of Sudbury is but one example of why the Investment Canada Act needs to be updated and, further, why full public consultations for major foreign takeovers are necessary to ensure Canada is taking the proper approach to foreign investment.
In the fall of 2010, this House unanimously backed an NDP motion calling for the modernization of the Investment Canada Act and specifically a clear definition of what constitutes a net benefit under the act. Further, the Minister of Industry at the time also made a commitment, both in the House and in various media outlets to bring “clarity” to the act in order to ensure that Canada's foreign investment procedures were clear for investors, for workers and for the Canadian public. Yet unsurprisingly, the Conservatives have reneged on this commitment to review and clarify the Investment Canada Act, leaving both investors and everyday Canadians in the dark.
It was my hope that this issue would have come before the industry committee, of which I am a member following the 31st general election. However, as yet, despite the government's commitment to re-examine the act, the committee has not had the opportunity to undertake a study into the deficiencies of the act. The public can take that as it may, as it has not been the New Democrats who have been stalling on this front.
One of the most troublesome aspects of the Investment Canada Act as it currently stands is the lack of a requirement for full public consultations for large foreign takeovers like the proposed Nexen deal. Put simply, without amendments to the Investment Canada Act, Canada's foreign investment regime will continue to lack transparency and accountability. That is why New Democrats are calling for transparent public hearings on the proposed takeover before any decision is taken on whether or not to approve this deal.
Like many Canadians, New Democrats have concerns about the risky hands-off approach of the government and its refusal to conduct an open and transparent review of this proposed takeover. The business sector, Canadian workers and communities need certainty when it comes to foreign takeovers, but the current review process lacks transparency and accountability. While the Conservatives have refused to hold public hearings on the CNOOC Nexen takeover, they have been busy meeting with well-connected lobbyists on the matter, including former advisers to the Prime Minister.
This speaks volumes about the approach taken by the government. Insiders continue to get intimate details of government plans while ordinary Canadians are left out in the cold. This is a story that has become all too common with the Conservative government. The fallout in Sudbury resulting from foreign takeovers of Inco by Vale and Falconbridge by Xstrata has made it clear to me that holding public consultations and ensuring the public disclosure of associated undertakings is necessary to ensure an open, transparent and accountable process for reviewing foreign takeover proposals, such as the one we have in front of us with Nexen.
Canadians deserve better. We need public hearings to provide clear answers to the serious questions raised by this deal and the various others coming down the pike.
A second major deficiency of this act as it stands and one that we had a firm commitment from the former Minister of Industry to correct is the highly subjective net benefit test. Specifically, the concept of net benefit is not clearly defined by the act, creating uncertainty for investors and for potentially affected communities. Therefore New Democrats are once again calling for long overdue changes to the act to clarify the criteria used to evaluate net benefit.
If it seems like New Democrats are yelling from the rooftops on this issue, it is because we have been the only party to consistently call for a cleanup of this act. Once again, the inherently problematic net benefit test is rearing its ugly head.
It is not just New Democrats clamouring for a cleanup of this section of the act, rather Canada's business leaders are also echoing this call. For instance, the president of Winnipeg-based steel fabricator Empire Industries Ltd. has described the current system as “highly subjective” and has stated that it is important to have clear ground rules.
However, because the PMO and the Minister of Industry have continued to hide behind a cloak of secrecy in relation to this proposed takeover and have been sitting on their hands for the best part of two years in terms of bringing forward a more objective test than the net benefit, neither industry nor investors nor the Canadian public have any idea of what criteria this proposal must meet in order to be approved.
Unfortunately, as the representative for Sudbury, it is déjà vu all over again for me. Canadians need answers on their key questions and concerns to verify that this deal would be a net benefit to Canada. Unfortunately, the Conservatives have thus far only spit out repetitive talking points in place of the substantive information that Canadians are seeking.
Another instructive statement comes from Scott Hand, the CEO of Inco until it was acquired in 2006 by Vale, who has argued that the net benefit clause and specifically Canada's unwillingness to shield strategic industries despite other countries judicious exercise of this right, makes Canada a boy scout playing among other countries who play hard ball.
This speaks to the specific issue of allowing foreign state-owned enterprises to buy up what could only be described as a strategic resource. In 2006, when CNOOC attempted to purchase American-owned Unocal, a fulsome debate on the issue of both strategic resources and national security was allowed to take place. Ultimately, this bid was rejected by the U.S. government as allowing a foreign state-owned enterprise to take over a strategic industrial entity like Unocal was deemed to be against the national interest.
The notion of selling a strategic resource like Nexen to a foreign state-owned entity has also been strongly refuted by one of the people responsible for crafting the Investment Canada Act. Mr. Sinclair Stevens, an industry minister under the Mulroney government, who brought in the Investment Canada Act to replace the more stringent Foreign Investment Review Act, has stated:
While we didn’t put it in the act, the departmental view was very firm: you can’t tolerate state-owned firms taking over anything in any substantial way in Canada....
I know my time is coming to an end, but it is time to open up this issue for broader discussion. I am hopeful that the industry committee will have the opportunity to study the deficiencies in full public view and ensure the fulsome debate that Canadians expect and deserve.