National Security Review of Investments Modernization Act

An Act to amend the Investment Canada Act

Sponsor

Status

This bill has received Royal Assent and is, or will soon become, law.

Summary

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

This enactment amends the Investment Canada Act to, among other things,
(a) require notice of certain investments to be given prior to their implementation;
(b) authorize the Minister of Industry, after consultation with the Minister of Public Safety and Emergency Preparedness, to impose interim conditions in respect of investments in order to prevent injury to national security that could arise during the review;
(c) require, in certain cases, the Minister of Industry to make an order for the further review of investments under Part IV.1;
(d) allow written undertakings to be submitted to the Minister of Industry to address risks of injury to national security and allow that Minister, with the concurrence of the Minister of Public Safety and Emergency Preparedness, to complete consideration of an investment because of the undertakings;
(e) introduce rules for the protection of information in the course of judicial review proceedings in relation to decisions and orders under Part IV.1;
(f) authorize the Minister of Industry to disclose information that is otherwise privileged under the Act to foreign states for the purposes of foreign investment reviews;
(g) establish a penalty not exceeding the greater of $500,000 and any prescribed amount, for failure to give notice of, or file applications with respect to, certain investments; and
(h) increase the penalty for other contraventions of the Act or the regulations to the greater of $25,000 and any prescribed amount for each day of the contravention.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, an excellent resource from the Library of Parliament. You can also read the full text of the bill.

Votes

Nov. 20, 2023 Passed 3rd reading and adoption of Bill C-34, An Act to amend the Investment Canada Act
Nov. 7, 2023 Passed Concurrence at report stage of Bill C-34, An Act to amend the Investment Canada Act
Nov. 7, 2023 Failed Bill C-34, An Act to amend the Investment Canada Act (report stage amendment) (Motion 3)
Nov. 7, 2023 Passed Bill C-34, An Act to amend the Investment Canada Act (report stage amendment) (Motion 1)
Nov. 6, 2023 Passed Time allocation for Bill C-34, An Act to amend the Investment Canada Act
April 17, 2023 Passed 2nd reading of Bill C-34, An Act to amend the Investment Canada Act

April 26th, 2023 / 4:45 p.m.
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Liberal

François-Philippe Champagne Liberal Saint-Maurice—Champlain, QC

Under Bill C‑34, giving notice is a requirement. We want to be aware of these investments as quickly as possible so that we can conduct a national security review.

The committee members and my colleagues have definitely seen that I'm prepared to use the act on behalf of of Canadian interests. We recently blocked three transactions by Chinese companies that wanted to acquire certain activities or assets in a number of mines here in Canada.

The bill will give us more tools. The required notice is one example of this. It will enable our teams to conduct a national security analysis. The principle underpinning the bill is to have as many tools as possible in the tool box to protect national security. Critical minerals are definitely in the picture here.

Earlier on, a member asked a question about Volkswagen. Volkswagen came to Canada because of the qualified workforce, the ecosystems, and access to critical minerals, renewable energy, and the market.

My concerns include not only protecting the mining of our critical minerals, but also the refining thereof. The idea is to keep the added value of these resources here in Canada rather than exporting raw materials to other countries.

April 26th, 2023 / 4:45 p.m.
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Liberal

Viviane LaPointe Liberal Sudbury, ON

Thank you, Mr. Chair.

Good afternoon, Minister. We're pleased to welcome you today.

No one here will be surprised to learn that the questions I'm going to ask today will be on critical minerals.

Could you, Minister, describe the protections for critical minerals in Bill C‑34?

April 26th, 2023 / 4:40 p.m.
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Conservative

Ryan Williams Conservative Bay of Quinte, ON

I want to get to some questions on Bill C-34.

If you have a study, can you submit it?

April 26th, 2023 / 4:30 p.m.
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Saint-Maurice—Champlain Québec

Liberal

François-Philippe Champagne LiberalMinister of Innovation

Thank you for your generosity, Mr. Chair.

I would first like to acknowledge the work done by our colleague Brian Masse.

I would like to congratulate him on the passing at third reading of the Ojibway national urban park act. I think it's a huge achievement by a colleague. We should all be proud that a private member's bill gets that recognition. It's all thanks to him. I wanted to say that on the record, even though I know most of his questions might not be about the Ojibway national park today.

I also want to thank Andy Fillmore, my parliamentary secretary, for all his work, and thank you for the work of all members of the committee.

Dear colleagues, I'm very pleased to see you, and even more so for this opportunity to speak to you about Bill C‑34, An Act to amend the Investment Canada Act.

Our colleagues, as well as businesses and various other stakeholders, have shown a great deal of interest in the modernization of this act. The last time it was revised was 2009. I believe my colleagues would agree with me that the world has greatly changed since then.

As you know, the Investment Canada Act performs an important role in Canada's economy. Its primary role is to encourage economic growth, and it intervenes only in instances where an investment would be harmful to Canada's national security.

The purpose of modernizing the act is to strengthen our capacity to protect Canada's national security and intellectual property. It would also improve transparency for investors and give them certainty, while strengthening our capacity to take rapid and firm action to reduce national security risks.

I welcome the comments made by the many members of the House who came to see me in person. Quite a few of my colleagues rightly underscored the fact that national security was not and ought never to be, a partisan issue. We are all united in our desire to protect the interests of Canadians.

Before continuing, I'd like to clarify something about which there appears to be some confusion—the trigger thresholds.

Bill C‑34 mainly addresses the Canada Investment Act's national security review, not the net benefit reviews.

Net benefit reviews are triggered by a number of financial thresholds. These thresholds are of course published and updated every year. The amounts vary, depending on whether the investor is a state-owned or state-controlled enterprise, a member country of the World Trade Organization, or country with which Canada has a trade treaty.

On the other hand, there is no triggering financial threshold for a national security review. Allow me to repeat: there is no triggering financial threshold. All investments, irrespective of value, are subject to the national security review, with no exceptions.

In this context, I want to take a few minutes to discuss three themes that I think came up through debate and that would be relevant for colleagues around this table.

First is the ability to protect Canada's interests. One thing I was pleased to hear was the agreement around ensuring the government has the right tools to protect Canada's interests. Today, it's all about the tool box. There's a lot of ambition, I would say, around this table, but I think they would find that the Minister of Industry today has a very limited tool box to address the security threats we're facing.

The amendments we're proposing to the ICA will strengthen our ability to respond to the evolving threat environment and, I would say, to the geopolitical situation we're facing today. Things like undertakings will make sure that we are more nimble and allow companies to make binding commitments to mitigate any national security concerns that are associated with proposed investments.

Previously, imposing conditions on a transaction to mitigate risk could occur only through a Governor in Council order. These GIC orders typically cannot be amended. Allowing undertakings at the ministerial level means these conditions could be imposed and amended, giving us greater flexibility to adapt to the conditions in order to protect our national security.

Colleagues, we have seen that in a cyberworld and a world where we've seen more people interested in IP and our critical resources, we need to be nimble to be able to answer the threat. This bill will allow us to make the review process more efficient by providing the Minister of Industry, in consultation with the Minister of Public Safety, with the authority to order further reviews, rather than seeking an order in council from cabinet. This is about doing business at the speed of business.

Removing the step of getting an order from cabinet at this specific stage will give more time to our security and intelligence partners to complete a thorough assessment of the national security risk. We should all be happy about that, because we want to have the best intelligence for any minister to make a decision.

However, I want to emphasize that cabinet will still remain the authority to make the decision on any final order related to blocking an investment. That authority to make a final order is not changing, but we need to accelerate the process before the final step, to move at the speed of business.

The second thing I've heard about from colleagues, Mr. Chair, is protecting IP and intangible assets. We all know that companies now sit on a lot of intangible assets, and we need to make sure we protect that. Another thing we heard about was the importance of protecting, like I said, intellectual property and intangible assets that Canadian companies own.

Our government recognizes the value of the intangible economy as it's growing, and the relevant opportunities for all Canadians. This bill will help protect the intangible assets of Canadian business through the introduction of a new pre-implementation filing requirement and a new authority for the Minister of Industry to impose interim conditions on an investment, so it's about pre-filing requirements and also having interim conditions during the period that you're going to review that.

Colleagues will understand that's what matters, because before you give a final approval or not, you want to make sure that companies will not be disclosing IP to the other side. That way, the government can ensure that such harm does not occur. I think this is something that the committee has been asking for. Believe it or not, today, the Minister of Industry doesn't have the authority to impose interim conditions, meaning that you freeze the situation for the time of the review. We know that, with intangible assets, it's not something that you can give back. Once people have had access, they have the knowledge. We need to prevent that.

The new authority will impose conditions and will prevent the transfer of Canadian intellectual property, trade secrets and technical know-how to non-Canadian entities prior to the conclusion of the national security review. The ICA already allows us to take a look at asset sales. We will now have the tools to manage those cases much more efficiently and, I would say, in the interest of Canadians.

The third thing I've heard from colleagues is around transparency.

The bill adds certainty and transparency for enterprises and investors by specifying the improvements we are going to make to the national security review process.

There will also be robust protection of any information supplied to my department, Innovation, Science and Economic Development Canada, in connection with both national security and net benefit reviews.

Such protection is required to protect the bond of trust between the department, potential investors and Canadian enterprises involved in a transaction. For that reason, we will never publicly disclose such information, or specific circumstances, involved in current or past reviews. Although there are restrictions on what can be disclosed, we have already been publishing our decisions and directives to clarify how the Investment Canada Act is being applied.

Bill C‑34 also adds new provisions for the protection of information In the judicial review of decisions. This amendment will enable the government to defend its national security decisions on the basis of sensitive information, while protecting such information from disclosure. These new provisions will also enable applicants to participate more fully in judicial proceedings.

To conclude, I'd like to thank the committee for the work it has done over the past few years, including its studies on the Investment Canada Act. Colleagues around this table have all contributed to the outcome we are presenting today. We took your comments and the recommendations of our colleagues into consideration, and they are reflected in Bill C‑34.

I would even go so far as to say that action is urgently needed, because colleagues on both sides of the House frequently asked me to intervene. I explained to them how the shortage of tools in our tool box was impeding our capacity to do a better job of defending Canadian interests.

We also gave consideration to recommendations made with respect to other recently announced policies, such as those pertaining to the protection of critical minerals. As you may have noticed, I've already announced four policies that will provide better protection for Canadian interests.

I am enthusiastically looking forward to further work with you on this bill. As I mentioned previously, I acknowledge that we all agree on the fact that Canada's national security is not a partisan matter and that we need to be united in our determination to work together for Canada's protection.

I'd like to thank the committee for its excellent work.

I will of, course, be happy to answer any questions that members of the committee may have in order to achieve the best possible results on behalf of Canadians.

Thank you.

April 26th, 2023 / 4:30 p.m.
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Liberal

The Chair Liberal Joël Lightbound

Ladies and gentlemen, dear colleagues, good afternoon.

I call this meeting to order.

Welcome to meeting No. 69 of the House of Commons Standing Committee on Industry and Technology.

Pursuant to the order of reference of Monday, April 17, 2023, we are studying Bill C‑34, An Act to amend the Investment Canada Act.

Today’s meeting is taking place in a hybrid format, pursuant to the House Order of Thursday, June 23, 2022.

For the first hour, we are fortunate to have with us the Hon. François-Philippe Champagne, the member for Saint-Maurice—Champlain and Minister of Innovation, Science and Industry. He is accompanied by Charles Vincent, Assistant Deputy Minister, Small Business and Marketplace Services. In the second hour, Mr Vincent will be joined by James Burns, Senior Director, Investment Review Branch.

I'm going to begin by giving the floor to Mr. Champagne for a rather generous period of five minutes.

April 24th, 2023 / 5:05 p.m.
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NDP

Brian Masse NDP Windsor West, ON

On a separate scheduling note, has there been any thought about what we're doing with Bill C-34 and Bill C-27? How much time do we have left to schedule those? I haven't checked my email, so it could be in my box right now for all I know, but I'm just curious.

April 19th, 2023 / 5:30 p.m.
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Liberal

Iqwinder Gaheer Liberal Mississauga—Malton, ON

Let's say in a hypothetical world Bill C-34 was currently enacted. Would you like to comment on how it could potentially help in this current situation with Glencore?

April 19th, 2023 / 5:30 p.m.
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Vice-President, Communities, Government Affairs and Health, Safety, Environment and Community Systems, Teck Resources Limited

Amber Johnston-Billings

At this point, our shareholder vote is on April 26, which is next Wednesday. That is a proposal for us to separate into two world-class companies that would both be headquartered in Canada. At the moment, it's in shareholders' hands as to whether that vote will go through. Obviously, we have the protection of our A-class shareholders, but we'll see how that vote goes next Wednesday.

To your question on Bill C-34, it's unlikely that we will see that updated in time, obviously, to play a role in this particular situation. At the same time, that's not what we're directly asking for, as I mentioned previously. We are in a position where we are highlighting to the government the issues in this potentially foreign takeover by a company that has a terrible track record in human rights, labour abuse and corruption. We would expect that the Government of Canada would look very closely at approving that transaction.

If it were to go ahead.... At the moment, we believe it will not. It has been unanimously voted down by our board on two occasions. At the moment, all of our defences are up in terms of this not happening, but if it were successful and it went through to a regulatory review and there were changes, that review could happen earlier. If that review did not allow those powers to change, then obviously it would still need to go through a fairly extensive review in Canada under the ICA.

Thanks.

April 19th, 2023 / 5:25 p.m.
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Liberal

Iqwinder Gaheer Liberal Mississauga—Malton, ON

Thank you, Mr. Chair, and thank you to all the witnesses for their testimony to the committee so far.

Ms. Johnston-Billings, Bill C-34 has been referred to this committee in terms of how it will strengthen the ICA. Could you elaborate on how Bill C-34 and the ICA will support you in preventing the hostile takeover by Glencore?

April 19th, 2023 / 5:10 p.m.
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Vice-President, Communities, Government Affairs and Health, Safety, Environment and Community Systems, Teck Resources Limited

Amber Johnston-Billings

Obviously, Glencore has a very poor track record when it comes to labour rights. To your first point, they've had 65 strikes since 2013. A number of those lasted 200-plus days, and in some cases they just shut down the asset instead of engaging with workers, so it's very problematic.

On the question of undertakings, I'm not in a position to be able to direct the federal government to look at this. All I can do is to continue providing the information I've provided today. We're aware that a net benefit review at a later point is absolutely part of the regulatory process.

I think you can see in Glencore's filings that they expect the regulatory process in Canada. I think it was referred to as almost a walk in the park, and it will take 12 months or so. We would like to highlight that we think it's very unlikely, given their practices, particularly around their corruption charges. Certainly we have asked the federal government to take a close look at this, but we're not in a position to ask for anything beyond that.

In terms of the decision they would make at a later date, that's in their court, but we welcome Bill C-34 and some of the amendments that might be made in there.

April 19th, 2023 / 5:10 p.m.
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NDP

Brian Masse NDP Windsor West, ON

Thank you, Mr. Chair.

Before I get to my questions, starting with Ms. Johnston-Billings, I want to preface them with a case that's taking place in Windsor right now. It's not electronic metals and plastics; it's Windsor Salt, which is now owned by Stone Canyon Industries, a holding company from the United States. They also bought a facility in Lindbergh, Alberta and closed it down. It had been there since 1948. They also bought K+S in the United States—salt.

Now there's a strike. They're known for union busting. That's really what they're doing. This is only the second strike in over 100 years. I think it was 30-something years before that. It's their own natural resource.

I'm looking at the situation you're going through right now with Teck Resources Limited. This committee is going to be looking at Bill C-34, which is important. Unfortunately, previous governments raised the threshold for review, including on our natural resources, to stop many of the reviews that could have taken place—should have taken place—of many industries. I'll be moving an amendment to the act that would include any natural resources, especially when you look at some of the critical minerals we have coming through for the electrification of vehicles and so forth, to get an automatic review despite size.

The reason I'm raising all of this is that what has been used in this parliamentary system for the two decades I've been here is, “Don't worry about it, we can do undertakings.” We've seen undertakings. They supposedly create a head office in Canada. Whether they have job guarantees for a short period of time or they have production, we've seen that to be a lie as well, when you look at U.S. Steel and Hamilton.

My question to you with regard to your situation is this: Have you guys looked at undertakings? I don't have any confidence in them. I'm just wondering about the thoughts of the board or any of your analysis as to how serious you think that might be, especially given the reputation that's been well earned by Glencore versus others. I think we're pretty much just giving away accountability.

Perhaps you can highlight that. That's our law. We can create undertakings, but enforcing them is another story.

April 18th, 2023 / 11:45 a.m.
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Liberal

Stéphane Lauzon Liberal Argenteuil—La Petite-Nation, QC

Thank you, Mr. Chair.

Thank you to the witnesses for being here.

Ms. Gagné, today, we heard how the transfer of patents to other countries gives rise to national security concerns. The Minister of Innovation, Science and Industry introduced a certain number of measures to address national security concerns, which we've talked a lot about in the past year. Among those measures are working closely with universities to make them aware of the risks associated with the transfer of intellectual property, as well as developing new national security guidelines for research funding to help post-secondary institutions better identify, assess and mitigate the risks.

What's more, under the Investment Canada Act, foreign investors have to undergo a review, including enhanced scrutiny for all sensitive sectors, such as universities. I'm not sure whether you know this, but the government introduced Bill C‑34, an act to amend the Investment Canada Act. Can you talk about the importance of that scrutiny in protecting Canadian intellectual property?

Financial Statement of Minister of FinanceThe BudgetGovernment Orders

April 17th, 2023 / 5 p.m.
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Conservative

Shelby Kramp-Neuman Conservative Hastings—Lennox and Addington, ON

Madam Speaker, I rise to seek unanimous consent concerning a vote held earlier today on Bill C-34. I would like to mark my vote as affirmative.

National Security Review of Investments Modernization ActGovernment Orders

April 17th, 2023 / 3:10 p.m.
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Liberal

The Speaker Liberal Anthony Rota

Pursuant to order made on Thursday, June 23, 2022, the House will now proceed to the taking of the deferred recorded division on the motion at second reading stage of Bill C-34, under Government Orders.

The House resumed from March 31 consideration of the motion that Bill C-34, An Act to amend the Investment Canada Act, be read the second time and referred to a committee.