An Act to amend the Department of Industry Act (financial assistance)

Sponsor

Maxime Bernier  Conservative

Introduced as a private member’s bill. (These don’t often become law.)

Status

Second reading (House), as of April 19, 2018

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Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

This enactment amends the Department of Industry Act in order to require the Minister of Industry to publish certain information concerning the financial assistance provided either under section 14 of the Act or by any economic development or opportunities agency for which the Minister is responsible.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Department of Industry ActPrivate Members' Business

April 19th, 2018 / 3:45 p.m.
See context

Conservative

Maxime Bernier Conservative Beauce, QC

moved that Bill C-396, An Act to amend the Department of Industry Act (financial assistance), be read the second time and referred to a committee.

Mr. Speaker, it is rather unfortunate that we are forced to introduce a bill to ensure greater transparency. It must be said that the Government of Canada provides financial assistance to many businesses. The purpose of the bill is to ensure that when the government says that its financial assistance is repayable, Canadian taxpayers are actually informed that they have been repaid. We do not have that information and that is the purpose of the bill. It is a very simple bill.

I stated that it is unfortunate that we have to introduce a bill because I want to go back to 2006 when I was the industry minister. The information was available. When the industry minister provided repayable assistance, taxpayers could go to the department's website and find out which companies had received financial assistance, how much they received, and the repayment terms.

We have been asking the government for a lot more transparency for many months now. Let us not forget the $275-million repayable loan that the government gave Bombardier a few months ago. I asked the government what the terms and conditions of that loan were, and I was told that they were secret. That is unfortunate because taxpayers will not know whether that money has been repaid. What is more, although the government gave that money to a very reputable company, jobs still left Montreal. Meanwhile, members will recall that shareholders received very generous bonuses, thanks to the $200-odd million the government gave Bombardier.

That said, these agreements are not secret. They should be made public because taxpayers have a right to know where their money is going. That is why we had to introduce a bill today to tell the government that the official opposition, with the support of the NDP, I hope, wants to know what happens with any future grants and whether the amounts are actually repaid.

I am going to give a few figures because the industry minister is really responsible for the contributions and funding given to companies. This is not a new problem. I see here that the Government of Canada gave $57 million to Bell Helicopter. When we look at the “repayment” column on the department's website, it says that the information is confidential. No information is provided. The problem is that the loan was granted int November 2003 and we do not know what is happening with it. We found out about the loan when it was made public a few years later in 2006-07, as I said, but we do not know whether it has been repaid.

I am looking at another file, that of CMC Electronic Inc. In 1997, the government granted CMC $23 million. Was that money ever paid back? No. I can go on because the list is long. I will name only a few. IBM Canada, a company that does very well, received $33 million from the Minister of Industry. Was that money paid back? No, no one knows, because that is confidential. When I look at all this and add up all the companies that did not repay the money they received, I see that more than 200 companies received repayable loans and grants that just slipped through the cracks. No one has any idea what happened to the money that was given to nearly half of those 200 companies. No one knows if, in fact, the money was given as a grant or not. Unpaid repayable loans become subsidies. There is no information for 45% of these companies.

Even more alarming is that this money given to the corporations represents more than $700 million in unpaid loans. Is this $700 million in subsidies to big business or not? No one knows because no one has any idea about the repayment status of these “subsidies”.

Since this is taxpayer money there is nothing confidential about it and everything should be made public. Some civil organizations are asking for this information. They have taken the matter to court to find out what happened with these grants or so-called repayable loans.

The bill is very simple. It says that when the Minister of Innovation, Science and Economic Development gives a business a grant or a non-repayable loan, taxpayers and Canadians should be able to find out if the money is repaid or not. That is a cornerstone of democracy. That is why I am happy my NDP colleagues support this. I very rarely agree with socialists, but they are being sensible here. Like me, they can see that, in this case, the government is using its power to say things are secret when they are not secret.

I hope to have the support of my Liberal colleagues as well. During and after the election campaign, they talked a lot about transparency, open government, and accessible government. If that is really what my Liberal colleagues want to achieve, this is their opportunity to walk the talk. They can choose to take action and support this bill to signal that transparency is important in Canadian society and tell Canadians that upwards of $700 million will be repaid.

It is unfair that so many small businesses, including some in Beauce, do not have the luxury of getting subsidies—excuse me, repayable loans that, between you and me, turn into subsidies when they are not repaid. Businesses in Beauce work hard, pay their taxes, and obey the law, but they do not have this luxury and cannot access any of that money. The government should treat everyone fairly and make sure the money is repaid.

I have a suggestion for my Liberal friends. When the $700 million is repaid, if indeed those were repayable loans, they can use the money to lower the tax rate for all businesses in Canada and adopt a policy that is actually fair and will create wealth.

The bill is on the table, and I am eager to hear from my Liberal colleagues. I think they will see the light and support it.

Department of Industry ActPrivate Members' Business

April 19th, 2018 / 4 p.m.
See context

NDP

Charlie Angus NDP Timmins—James Bay, ON

Mr. Speaker, as always, I am honoured to rise in the House to represent the people of Timmins—James Bay and to participate in debate on Bill C-396, an act to amend the Department of Industry Act with respect to loans that are given out, and to address the issue of transparency and accountability with respect to loans.

What I have learned in my many years of representing northern Ontario is that the government has an important role to play in working as a partner and ensuring that we can build a strong economic base across this country. Part of the role the government plays as a partner is making sure that if loans are being made, they are of net benefit to our regions and our country.

The issue that has been brought forward by my colleague about more transparency with respect to these loans is certainly something we should be looking at, because after a number of recent scandals, Canadians have asked themselves how these decisions could have been made.

For example, Export Development Canada loaned $41 million to the notorious Gupta brothers to buy a jet, who then absconded with the jet and defaulted on the payments. People back home ask themselves how it could possibly be in the interests of Canada and the hard-working taxpayers of our country to loan $41 million to a couple of brothers who were involved in all kinds of accusations of corruption in another continent to buy themselves the ultimate lifestyle trinket, that being a private jet. They would also wonder why Canadians would be surprised that they absconded with the jet.

That kind of transparency is worth having.

I would like to challenge my Conservative colleague. I do not think we have ever agreed on anything, other than the fact that this issue of transparency is important. However, under the previous Conservative government, when it came to the issue of net benefit to the Canadian people in deals with industry, it was very secretive. We saw that with the takeover of American Steel and Stelco. We saw it with the supposed net benefit to Canada when two of the greatest mining companies in the world, Falconbridge and Inco, were allowed to be taken over by the corporate bandits Xstrata and Vale. We were told that this was to be to be of net benefit to Canadians, yet when we asked what the terms of the agreements were that they had to live by, we were told it was a secret.

How is it possible that we can sell off major Canadian industries with a supposed investment agreement and then, when we ask if the terms of the agreement are being lived up to, we are told it is a secret? That is not in the best interests of the Canadian taxpayer.

What my hon. colleague is putting forward with respect to the obligation for industry is vital at this time, because we see a government that talks about moving forward with “clusters”. That is its big vision: to find a supercluster or a megacluster. I do not know what it will call it in the next budget—the “super-duper oodle cluster”?

The idea that it can find three or four places in the country and turn an economy around is a ridiculous notion, because an economy is like a strong ecosystem, in that there have to be values at every level that are actually sustainable. Contrary to the Liberals' vision of the supercluster, I think one of the important roles of government investment is in regional economic development, to make sure that we have solid local economies across this country. That is done by being a partner, and traditionally we have done it through the various economic development agencies.

There have been a lot of allegations over the years of pork-barrel politics and problems with that. This is why accountability and transparency are important. It is extremely important in my region of northern Ontario, which is a resource-based economy. The principle of resource-based economies, where there are non-renewable resources, is that the revenues should benefit the region. In the case of Alberta, the revenues go back to Alberta. In the case of Newfoundland, they go back to Newfoundland. However, in the case of Ontario, the entire resource-based region sends its money to Queen's Park in southern Ontario, and then we have to go down like beggars, cap in hand, and beg for what they consider to be gifts, loans, and charity to us poor northern communities when we do not have the benefit of our resources.

One of the agreements that was to offset this huge disparity in the economic system which exists in Ontario with a very powerful urban core and very isolated communities was to create a regional economic development agency, and that was FedNor. FedNor's job was to reinvest money in the regions working with local partners. However, what we have seen over the last number of years is that FedNor has been atrophied. It has been cut. We have lost 30% of the staff at FedNor. FedNor had a $1.76-million annual budget and it is down to about half that now.

In the latest budget, the government did not even mention FedNor. The Liberals talk about maybe moving it all into the minister's office. This is another concern because the minister, who is from Mississauga, is now taking the role of the regional development voice for every part of the country. That does not make sense, because regions of the country are dramatically different. I cannot believe that the minister from Mississauga understands the issues that people face in La Sarre and Abitibi, or understands the differences in having a local economy when there are communities that are sometimes five and six hours away from each other. That is the role of FedNor. FedNor gets this.

When the federal Liberals came into government in 2015, they shut all the broadband projects in northern Ontario that were under FedNor because they had a super-duper cluster plan, which took another two years to roll out. We lost two years of broadband development in a region that is isolated and where it is badly needed. The federal Liberals then decided they were going to have a consultation process. Another thing is that the Liberals love to talk. They had a national consultation process on rural broadband, and they found that northern Ontario had serious shortfalls in broadband. Why is this important? How do they attract business and how do they get start-up businesses if they do not have broadband?

The consultation process went on for two years and they consulted everybody. They consulted municipalities. They consulted NGOs. They consulted businesses. I am surprised they did not go door to door with surveys. They consulted everybody except the economic agency of the region, which is there for the federal government. Not only that, what is more surprising is that they consulted with the provincial economic development agency, but they ignored FedNor.

It tells me that this is the view of a government that does not understand the value of our regions and the importance of the distinct differences between rural, between northern, and between resource-based economies. They have to understand that if they are going to make economic transformations. The Liberals are now talking about their superclusters and their mega-clusters. They are now saying that they want to do regional development like that. That is not how it works. When we have communities that are spread out over such a vast region, they have to understand that they have to do it at the grassroots. They have to involve the people who know about it. We have some amazing people who do this work.

This year at the Prospectors & Developers Association convention, FedNor's booth was probably the largest single booth there—the European Union booth looked like penny ante stuff compared to FedNor—because the economic potential of the mining sector rebirth in northern Ontario is gathering international investors. FedNor is there, but FedNor's budget is so underfunded that 70% of its funds are spent before the year begins.

Imagine what we could do if we had a strong mandate for regional development, if we had the government investing in regional development, if it actually understood the importance of sectors like the mineral sector in the north and the potential for creating spinoff industries. That is how to build a sustainable economy for the long term.

We get back to the issue of transparency. The government is going to be giving out massive loans to companies like Bombardier. I have nothing against Bombardier, but holy smokes, it lost $900 million, borrowed $1 billion from the taxpayer, and of the $100 million, took a $30-million cut for its CEOs. That to me is not credible. We should claw back every dime from those CEO bonuses because it is taxpayer money. Bombardier can play such an important role. In Thunder Bay, Bombardier has the plant for the subways and the streetcars for most of Canada. That is important work, and yet Bombardier ships 80% of the jobs to Mexico. I have a problem giving a company $1 billion if it is going to ship 80% of the work to Mexico.

My belief is if a company gets money from the Canadian taxpayer, it invests in Canada. If it gets bonuses through the Canadian taxpayer, they go back to the Canadian taxpayer.

Our deal has to be that if a company is getting Canadian money, then it is not buying jets for corrupt businessmen in South Africa, or shipping the money to Mexico. It is going to create a sustainable, profitable economy for our region. That is why we need issues of accountability and transparency.

Department of Industry ActPrivate Members' Business

April 19th, 2018 / 4:10 p.m.
See context

Liberal

Mary Ng Liberal Markham—Thornhill, ON

Mr. Speaker, this government is committed to being open and transparent about how taxpayer dollars are spent so that Canadians are better able to hold Parliament and the government accountable. In fact, we have recently introduced proactive disclosure requirements for grants and contributions that enhance transparency and oversight of public resources. These requirements set a higher bar for openness and transparency with regard to financial support provided by the government. These guidelines exceed many of the requirements laid out in this bill.

In June 2016, as part of the open government action plan, the Treasury Board of Canada Secretariat committed to increasing the transparency and usefulness of grants and contributions data. The initiative was spearheaded by a TBS-led committee of 37 participating departments, agencies, and crown corporations, known as the Committee on the Reporting of Grants and Contributions Awards. This was part of the first major renewal of the proactive disclosure requirements for grants and contributions since the policy first came into effect in 2006. As a result, starting on April 1, 2018, federal departments, agencies, and crown corporations have been following the new guidelines on the reporting of grants and contributions awards, which consist of three major themes.

First, the government will now have to disclose all grants and contributions, not just those over $25,000, as required previously. In fact, Innovation, Science and Economic Development Canada, the department targeted by this bill, has been following this practice for its grants and contributions since last January.

Second, all government grants and contributions information will be posted on the open.canada.ca platform rather than on each federal organization's website. This will give Canadians a simple, one-stop repository that will better enable them to oversee how their government is using public resources.

Third, the amount of information to be disclosed has been dramatically increased. Previously, each grant or contribution disclosure contained basic identifying information, including the value of the award, the name and location of the recipient, and limited information on the purpose of the funding. Now the government will publish a much more robust amount of information for each disclosure. This includes a more comprehensive section on the purpose of the award, the expected outcomes, and information on the recipient.

In addition, if passed, these reporting requirements would be strengthened and modernized through Bill C-58, an act to amend the Access to Information Act and the Privacy Act and to make consequential amendments to other Acts, which is currently being reviewed by the Senate. Bill C-58 would create a legislated requirement for the proactive publication of grants and contributions aligned with the new guidelines I just explained.

In seeking to legislate these requirements, rather than enacting them through policy, the government is looking to enhance the accountability and transparency of federal institutions to promote an open and democratic society and enable public debate on the conduct of those institutions.

As I have just shown, the current proactive disclosure requirements and proposed legislative changes through Bill C-58 would provide Canadians with robust oversight of public resources. Importantly, this would be done, unlike with the proposed bill, without compromising the competitive position of individual firms.

Bill C-396 would require private businesses and organizations to release sensitive commercial information, potentially compromising their competitiveness and market position. This bill would effectively obligate the government to publish the commercially sensitive and confidential information of private Canadian businesses, information that could potentially be used by a competitor, domestic or foreign, to undermine the competitive position of Canadian companies in the global innovation economy. This would be of particular concern to smaller, privately owned businesses that are not already required to publicly report things like revenues and expenditures in the same way publicly traded companies are.

The Government of Canada supports firms looking to scale up, expand into new markets, and develop technologies that support a modern, innovation economy.

The government's support for innovators and entrepreneurs is essential to achieving the goals set out in the innovation and skills plan to build an economy that works for everyone, an economy where Canadians have access to high-quality jobs and where Canadian businesses are well placed to compete in a rapidly evolving and competitive global marketplace.

Despite what the member opposite who has tabled this bill claims about this kind of support, the government is not in the business of corporate welfare. Rather, the government's support for innovative projects and collaborations helps Canadian firms enhance research and development activities, which benefits Canadians and Canada by generating investment, developing new technologies, and enhancing Canadian innovation capacity and expertise.

From the development of new clean technologies to the scaling up of small businesses, the government supports entrepreneurs and researchers working in various sectors of the economy who demonstrate the potential to drive forward Canada's innovation economy. The government will continue to support cutting-edge research that drives innovation and the development of new products and services for global consumers.

This is just one of the many ways the Government of Canada is working toward creating a competitive business environment that will benefit all Canadians and also attract investment. We have made significant strides in advancing this ambitious plan to strengthen the middle class, create jobs, and ensure a clean and inclusive future for all Canadians.

Just recently, we successfully announced the selection of five innovation superclusters. Small and medium-sized enterprises, large companies, academic institutions, and not-for-profit organizations will work together to advance Canada's technological capabilities.

We are also simplifying the way we support innovators with the creation of Innovation Canada to serve as a single point of contact for entrepreneurs looking to grow their businesses and as a gateway to government programs and services. The government provides a broad level of support to businesses looking to scale up, expand into new markets, and develop technologies to grow an innovation economy.

Governments should not be compromising sensitive commercial information that would undermine the competitiveness of those firms or Canada's attractiveness as a place to invest. The new, proactive disclosure requirements the government has put in place already strengthen the oversight of the use of public resources without creating a disincentive for businesses to get the help they need to benefit Canadians.

Bill C-396 would impede the government's efforts to better support innovation and entrepreneurship in Canada. Strong collaboration between ISED and the business community is essential to successfully drive forth the innovation and skills plan, create jobs, and improve the standard of living for all Canadians.

Department of Industry ActPrivate Members' Business

April 19th, 2018 / 4:20 p.m.
See context

Conservative

Tom Kmiec Conservative Calgary Shepard, AB

Mr. Speaker, I am pleased to participate in the debate on the private member's bill introduced by the member for Beauce.

As the member for Beauport—Limoilou so aptly said, Bill C-396 goes to the very heart of the principles underlying parliaments like ours, which exist throughout the world wherever there were British colonies. We are here to ensure that the House of Commons, which represents Canadians, approves the government's spending. Our country is based on a parliamentary system.

In my opinion, corporate subsidies and transparency in government spending are not mutually exclusive. The two should go hand in hand. Nevertheless, if I had to choose between Canadians' right to know how the government is spending their money and privileged corporations' right to keep secrets, I would side with Canadians. That is what the bill introduced by the member for Beauce seeks to do by proposing that the Department of Industry Act be amended with regard to financial assistance.

I do not believe we should privilege companies in any way. We should privilege the rights of Canadian citizens to know how their government spends money.

I am reminded of the history of Canada. In the 1840s, the main question when Confederation was first debated was about responsible government. For Louis-Hippolyte Lafontaine, Robert Baldwin, and other great fathers of Confederation, the question was centred on elected parliaments or appointed governors.

Who decides the power of the purse? Who decides those decisions? Those are the same debates that the United Kingdom's parliament had when there was a difference of opinion between what the crown wanted to spend and what the commons wanted to spend. Those same debates influenced debates in the 1840s, 1850s, and 1860s in Canada, and eventually led to Confederation. The act of Confederation was passed by the mother parliament in the United Kingdom, and we got responsible government in Canada. Since then, there has been a tension between what the government wants to do and what the commons wants to do.

The previous member said “we” referring to the government. Well, in fact, only the members of the front bench are members of the government. Our job as backbenchers, regardless of where we sit, is to hold the government accountable for its spending, because it does so both in our name and in the name of the citizens of Canada, who we represent.

There is a non-transparent reality about the Canadian corporate welfare. We, as politicians, offer a lot of justifications, and this is a problem all governments face, whether provincial or federal. We offer justifications, such as we are investing in the future or we are investing in new technology. These are all things that corporations, businesses, can do on their own. If they are asking the taxpayer to take some of the risk with them, and I sometimes hear “de-risking”, which is the finance minister's favourite term, the taxpayer is being forced to take on some of that risk.

I want to talk about some of the risk that the taxpayer has taken on in the past. A Technology Partnerships Canada repayment status report was put out November 1, 2017. It is the latest one I could find. There are corporations pre-2006 that took money from the taxpayer, and not all of them bad. Some of the investment decisions made by previous governments panned out, but we do not always know what they were. A clause reads, “ Indicates that the company has not provided ITO with an authorization to disclose repayment information”.

Will I, on behalf of the taxpayers in my riding, say that I do not care if the company has not filled out a little document saying it is okay with releasing the contents of that information? I want to know the contents of that loan or whether it was a gift. It has to be one of the two.

For example, Vector Aerospace Helicopter Services Inc. was given $3,509,249 in September 2005. It has paid back around $1.9 million, which may be not a bad amount but I cannot tell. However, a lot of these are simply blanked out, information is not available, so there is no way for us, as parliamentarians, to return to the House and say that the decision the government made was a good or bad one.

When there is a lack of information, it privileges ministers of the crown. The previous speaker and other members have said that there is all this great transparency, all these great things going on, and the information will be released eventually. If that is true, and I have serious doubts that it is true, why not vote for the bill? It will just make it legislation. It will not be a policy decision of the government of the day. We could have it as a statutory requirement. What could be better? It would be a law that we could then have civil servants live up to. If they come to a parliamentary committee, their performance could be judged on how they adhered to the law. If we are going to have more transparency, then why not?

I think the reason many members of the governing caucus are defending the vote against this private member's bill is that they know there is a lack of transparency. We need to look no further than the $7-billion slush fund that is being set up, and the great attempt to try and bring more transparency to the House, the attempt to change the way the estimates work. For eight years this will be done and the government will create a fund and the Treasury Board Secretariat will decide where the money goes, not parliamentarians, but Treasury Board and civil servants.

To bring it back to the examples I gave before about potentially good investments, I want to bring up Sandvine Incorporated where $9.5 million of taxpayer money was given to it in May 2013 and the taxpayer made back almost $14 million. There are good examples like this where we could wonder what was different about this agreement. What worked out in this agreement that did not work out in, say, Sanofi Pasteur's $48.5 million? Was it a loan? We cannot tell. We actually do not know how much of the money was returned to the taxpayer. Was it a good investment or was it not?

On the claims that corporate welfare works, that subsidies to corporations work, Mark Milke wrote in The Globe and Mail that it is “based on poor data, unsound social-science methods, and faulty economic reasoning....” Without information being released consistently, there is actually no way for parliamentarians and the Government of Canada to say yes or no. There is no way for them to look at the good cases and the litany of bad cases where government money, taxpayer money given by hard-working Canadians, is wasted to sustain companies in some cases that have no product or service that the free market wants to purchase. Why are they being sustained longer?

I could complain about Bombardier, but I am member from Calgary, Alberta, so let me complain about corporate welfare which I think goes to some oil and gas companies. This is according to Natural Resources Canada. It is from table 1b of “Corporate Welfare Cash: 21st Century Justifications and Billion-Dollar Bills to Come”, written by Mark Milke. For Suncor Energy products, there is a $2.17-million repayable contribution, but there is no data showing how much of it was actually repaid to the taxpayer. There is reference to Shell Canada, IGPC Ethanol Inc., and Greenfield Johnstown Limited.

It is right for the taxpayer to know the terms and conditions of the loan and how much of it has been repaid. Even if the purpose is good, even if there might be a legitimate public policy purpose that is outside profitability and sustainability, maybe taxpayer dollars should go to it. Let us have that debate when we have the data. I thought we were all about evidence-based policy-making. Give us the evidence.

We are asking to pass a piece of legislation which the member for Beauce has proposed that will give us the facts and the evidence in a public manner on a quarterly basis so we can see what corporate welfare is doing. Those few cases where it does work, what was so different about them when the majority of cases turn out to be absolute disasters? Those disasters have a political cost to them, so maybe I will caution the government.

Former Nova Scotia Premier Darrell Dexter was defeated partially over grants and loans of $300 million given to Irving Shipbuilding when it already had won $25 billion in federal contracts. This is a quote from Liberal Premier Stephen McNeil:

Why would we be giving grants, free money, to large corporations who, in some cases, are doing very well, and try to lure them to our province, then get ourselves caught in a situation where we’re really competing with other provinces in a race to the bottom?

I think the premier is right, so the government should give us the information. Let us pass this piece of legislation so we can be the judges of how taxpayer dollars are spent.

Department of Industry ActRoutine Proceedings

February 5th, 2018 / 3:10 p.m.
See context

Conservative

Maxime Bernier Conservative Beauce, QC

moved for leave to introduce Bill C-396, An Act to amend the Department of Industry Act (financial assistance).

Thank you, Mr. Speaker.

In my role as shadow minister for innovation, science and economic development, I have reviewed the files of corporations that have received financial assistance from the government. It has come to my attention that billions of dollars are being distributed every year by the government in subsidies and repayment contributions.

Many of these loans have not been paid back and nor do we know the status of the repayments. For 45% of the loans granted through the Minister of Industry's technology partnerships Canada program, we do not know if they have been paid back even though these loans were granted several years ago. The bill will enhance transparency in order to shed light on these loans.

I am against subsidizing businesses, but when they receive repayable loans, Canadian taxpayers should know if those loans have been repaid or not. This bill is very simple. It calls on the Minister of Innovation, Science and Economic Development to publish information on the repayment of these loans. I hope that we will have the unanimous support of the House since this bill is absolutely not partisan.

(Motions deemed adopted, bill read the first time and printed)