Bill C-34 (Historical)

National Security Review of Investments Modernization Act

An Act to amend the Investment Canada Act

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.

National Security Review of Investments Modernization Act

[Pat Kelly, Conservative, Calgary Rocky Ridge, AB]

Mr. Speaker, in the questions and responses, I think there has been some confusion about what this bill addresses, which is investment by foreign state-owned enterprises as opposed to foreign investment that is private and not from authoritarian state-owned enterprises. I wonder if the member could use the remaining time to ensure that we understand the difference.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Speaker, my colleague is correct. Indeed, companies run or controlled by entities such as China, which is a communist regime, pose a risk. The threat to Canada comes from that type of country. There is a fundamental difference between private companies and companies run by countries.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, it is always a pleasure to rise on behalf of my constituents from Kelowna—Lake Country.

I am here today to speak on Bill C-34. Since Confederation, people from all over the world have believed in Canada as a place worth investing in, but an open-door policy for investment will only improve the public good if we keep our eyes wide open to see who comes through our door.

In this, the Liberals have proven far too lax and have been asleep for eight years. It is a different time than it was generations ago and different than even eight years ago. A business that leaves its door open and unattended would swiftly go broke. So, too, would a country that does not recognize the difference between an investing free market ally and untrustworthy regimes.

I am glad, in the name of improving our economic and national security, that this legislation has been put forward in this bill before us today to strengthen the Investment Canada Act, but I cannot hide my disappointment that the Liberals have dragged their feet for eight years to do so and still provide legislation that, if I am being honest, is really only half-finished.

What we have before us is a bill that asks Parliament to protect the security of foreign investment by granting more power to the very ministers who ignored foreign investment threats. Traditionally, when the security guard falls asleep, he does not get a promotion the next day. The laundry list of these instances runs quite long in the eight years of the Liberals in power, so I will only provide a few examples of the government's negligence in the name of time today.

In 2017, the Minister of Industry failed to request a full national security review of the acquisition of B.C.-based telecommunications company Norsat International and its subsidiary, Sinclair Technologies by the China-based Hytera Communications.

In 2019, that minister failed again to request a full national security review when the Chinese Sinomine Resources purchased the Manitoba-based Tantalum Mining Corporation, one of Canada's largest lithium producers.

In 2020, the Minister of Foreign Affairs approved another China-based company in Nuctech to supply security equipment to 170 Canadian embassies and consulates.

In 2022, that same foreign affairs minister then became the Minister of Industry and approved the takeover of Canada's Neo Lithium Corp. by a Chinese state-owned enterprise with no national security review.

To talk about this one for a moment, this undermined Canada's supply chain opportunities. Lithium is classified as a critical mineral in Canada, which Ottawa says are critical to Canada's economy and imperative to battery storage, in particular for the electric vehicle industry. The regime of China is establishing global dominance on securing critical mineral assets and intellectual property, which are imperative to high-tech manufacturing, including electric vehicles. This is a prime example of when the subjective authority is given to one person, a minister, as opposed to having solid laws and policies.

Just last month it was discovered that the Minister of Public Safety allowed the RCMP and the Canada Border Services Agency to sign equipment deals with Hytera Communications despite the United States having banned them from doing business after charging them with 21 counts of espionage. Communications technologies, security equipment and lithium mining are integral parts of Canadian national security and the security of our allies.

Lithium mining and the export of other critical minerals are vital to breaking western reliance on Chinese-made electronics. We are blessed in Canada with some of the continent's greatest quantities of minable minerals. Still, as I have outlined today, the Liberal government has been more receptive to providing access to our natural resources to our foes than to our friends. State-owned enterprises are not operating separately from the interests of their centralized autocratic governments.

Sadly, it has taken until year eight of the Liberal government to realize that. It has also taken it eight years to develop a critical minerals strategy, leaving us behind in supplying ourselves and our allies. I will mention that the Liberal strategy on critical minerals really is not a comprehensive strategy.

The International Energy Agency forecasts that by 2030, the production of electric vehicles could reach 43 million units per year, with production valued at more than $567 billion U.S.

Robin Goad, president and chief executive officer of Fortune Minerals Limited, said that his company has been speaking with the federal government about critical minerals for more than five years but has yet to see substantive action. Their proposed mine would supply Canada with minerals like cobalt, gold and copper, and provide much-needed employment to Canadians in the Northwest Territories. Mr. Goad put it best when he said of the government, on critical minerals, that “it's all smoke and mirrors right now” and “It's time we stop talking about this and actually [start] doing something.”

Mined-in-Canada cobalt, graphite, lithium and nickel could become made-in-Canada batteries supplying our allies' electric needs while improving our environment. Instead, the Liberals chose to drag their feet on clean, green prosperity for Canadians. A Conservative government will do something. We will recognize that our natural resources are Canadians' opportunities for prosperity, not bureaucracy.

I previously sat on the industry committee and some of this work has been done on previous studies, including the critical minerals study and the study on the acquisition of Neo Lithium. The witness testimony during the Neo Lithium study brought out how the discretionary nature of the current legislation has left Canada vulnerable. The informal decision-making process has had little transparency and accountability. As well, testimony stated how having a government department lead a national security review process, instead of those who are security experts, was concerning on how this could protect Canada's assets.

Similarly, Conservatives at the industry committee are prepared to do the hard work in amending this legislation to enforce the precautions the Liberal ministers consistently forgot to take.

To summarize, on these changes to the Investment Canada Act, it is a very difficult world right now, with unstable regimes in the world. The Liberals have been asleep for eight years, and this has left us vulnerable. This has been partially studied already at the industry committee, of which I was formerly a member.

Under the Prime Minister, Canada has failed to conduct full security reviews on acquisitions within Canada by Chinese regime state-owned enterprises. This is at the same time when the Prime Minister cannot find a business case for LNG while Germany and Japan are begging for it.

Conservatives will work hard to create jobs, bolster our allies and protect Canada's intellectual and resource assets. Conservatives want to ensure that this long-overdue update of the Investment Canada Act legislation features an automatic review system, as well as a net benefit analysis of any investment by a state-owned enterprise. This is just plain common sense. We would not wish to allow the entry of foreign state competitors into critical areas of Canada's security and economy.

Similarly, Conservatives will seek to allow the government to list and completely prohibit state-owned enterprises from countries with which Canada should not be doing business at this time. I am sure no constituent of mine would wish to see a Putin-backed enterprise buying into any Canadian company.

Let us ensure that this bill can draw that red line. We cannot have the uncertainty that would be created by selling off our critical mineral assets when we need these minerals for our modern world, including for electric batteries.

After eight years of blindfolds from the government on foreign acquisition of Canadian companies, intellectual property, intangible assets and the data of Canadians, Conservatives at the industry committee will do what we can to ensure that this bill fully protects our economic and national security interests from nations that do not wish us well. We need to encourage investment, while at the same time protecting Canadian interests.

[Mark Gerretsen, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons (Senate)]

Mr. Speaker, the necessity for this legislation, given the changes that have been happening, is extremely important. The member in her speech talked about the fact that things are different than they were 20 years ago or even just a few years ago. The reality is that, as we look to attract new investment and continue to open our country to investment from the world, we need to have secure legislation in place to ensure that the integrity of our economic system and our political system is kept in place.

I am wondering if the member can comment on how we can properly balance that and bring that investment into our country, investment like that in my neighbouring riding of Hastings—Lennox and Addington, which is represented by a Conservative member, with the largest battery-manufacturing plant in North America. How do we ensure that we can have that proper balance in our country while also bringing in economic activity?

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, absolutely, this is part of why this legislation is very important. We also need to add in a few other things that Conservatives will be asking for when and if this moves forward, so that we can protect Canadian interests.

It really comes down to looking at the regimes with regard to state-owned enterprises. There were a number of recommendations that were made at the industry committee. Not all of those recommendations went into this act. That is one of the things we will be looking at. There was a lot of testimony that went into that.

Conservatives will be bringing forth other recommendations to actually make this even stronger.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for his speech. I think we both agree that this bill needs to be improved. However, in my opinion, given the overly limited interpretation by law clerks in committee, any amendments that can be made are too often limited.

The Bloc Québécois believes that the government should introduce another bill to better control foreign investments in general, particularly with regard to retaining our corporate head offices, our economic levers and control of our resources.

What does my hon. colleague think about that?

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, there are some parts of this bill that are very vague. As an example, the legislation does not make changes to the act's definition of a state-owned enterprise, and just that one piece, in itself, could be considered very vague.

I think we need to look at what recommendations for amendments are being brought forth by all parties. That work will, if this bill moves forward, happen at the committee stage, where all members can dig in the weeds, look at what recommendations everyone is bringing forth, assess them and go from there.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Mr. Speaker, I appreciate the work that the member for Kelowna—Lake Country did on the industry committee's study on this issue, in terms of this act, in the last Parliament, which made nine recommendations. This bill addresses only two of those nine recommendations. Recommendation 1 from that report, which I think would address a lot of the concerns of members, was that the threshold for investments made by state-owned enterprises in Canada, for the review on national security or net benefit, be reduced from $415 million to zero.

I would like to know whether the member has any views on that aspect.

[Tracy Gray, Conservative, Kelowna—Lake Country, BC]

Mr. Speaker, that is something absolutely worth considering and it should really be considered in this.

As I said in my speech, we know that it is a very different time than it was 10 or 15 years ago. We need to be amending our laws and our legislation to better reflect what the current environment is, the current economic environment and safety precautions, the current situation in the world. Based on the current environment that we are seeing with some of these regimes that are in the world, which have made very public what some of their plans are, we need to take that into consideration when developing legislation.

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, what should the number one job of a federal government be? I have always told my constituents that it is national security, our safety and security.

Last night, as I was preparing my remarks, I asked Dr. Google what the top priority should be for a national government. Lo and behold, up pops a website for Canada's federal government, which states, under “National Security”, “The first priority of the Government of Canada is to protect the safety and security of Canadians both at home and abroad.” That made me feel pretty good at first. I thought to myself that I was on the right track, and I was glad that the Liberal government places safety and security as its top priority. That made me happy. Unfortunately, I then felt disturbed when I started to think about it, because, as we have seen so much with the Liberal government, rhetoric and words are one thing, and doing is another.

Members might ask why. It is because I feel that so much of what the Liberal government and the Prime Minister do actually undermines the safety, security and protection of Canadians at home, within our borders.

The Liberals are weakening our justice system by removing mandatory minimums. There was a report recently in Vancouver that 40 or so criminals have done 6,000 crimes. That is the Liberal method, to catch and release. That is okay, I suppose, for fishing stocks, to catch a fish and let it go, but it is not good when it comes to criminals, when we have increased problems on transit with random attacks on people, and when a killer who is out on bail murders a police officer. This is not right. Canadians are not feeling protected at home by their justice system. It is a shame and a disgrace. It is not fulfilling the government's priority with respect to our security.

With respect to our national security, we have let our hair grow. Maybe that was okay back in the 1960s, but we have just let it go. We are thousands of troops short. We have obsolete equipment. The Liberal government said that it was not going to buy the F-35 fighter jets and instead decided to buy older planes, the F-18s, from the Australian air force. It has now decided that this is not working out so well and it had better get some new equipment. The Minister of National Defence has let things go with respect to our military.

I was also watching reports on Twitter and, big deal, Canada sent one tank to Ukraine. That was brought up in the House and the response was that it was actually four tanks, because three more are on the way. Meanwhile, the Ukrainians are losing hundreds of tanks over there, but Canada does not have much to send because our cupboards are bare.

This is personal for me, because I was raised in a Royal Canadian Air Force family. I was born in Germany and lived in bases all throughout Canada. Even from a young age, my mind was on the military and our national defence. I also served in the military after finishing high school.

Our national defence is not a priority. I will say that categorically.

Bill C-34 is an attempt to address an important national security risk, namely identifying and responding to economic security threats from foreign investments. I think this is good. The Conservatives will be supporting its moving to second reading because it needs a lot more teeth.

Much of what we have seen, and what I have seen since being elected in 2019, is just rhetoric. It is smoke and mirrors to make it look like the Liberals are doing something when they are not.

November 9, 1989, is a day that I remember well, along with the months and years that followed. What happened? The Berlin Wall that separated East and West Germany began to be dismantled. Numerous countries had been under communist regimes. Many are now part of NATO. There have been great changes. It was quite amazing. People were set free from communism without shots being fired in Europe. There was euphoria. It seemed miraculous, and maybe it was.

I found, as I have gone in my communities and talked to people, that those who are most concerned about what is happening in Canada in terms of freedom and security are those from eastern Europe who used to be under communist regimes. They are very concerned about what they see. They can see through the bluster of the Liberal government.

The United States became the only undisputed superpower. Western countries, including Canada, let our militaries go to pot. However, the world has changed in the past 30 years. Russia has armed itself to the teeth, and we have seen an invasion. We are coming to the first anniversary of the Russian invasion of Ukraine, and Conservatives support the efforts to oppose it, as do the other parties.

There is even more of a danger happening, and this has emerged in Communist China. China is an economic and military superpower that wants to extend its economic, military and political power and influence. It is threatening its neighbours. It is expanding control.

I have been to China, and it is a beautiful country, but its autocratic communist government is suppressing its own population. There is a lot of concern worldwide and among our military partners, whether it be Five Eyes, the United States, the U.K. or other countries, about what we are doing in Canada.

China has a larger navy than the United States. Our military partners are wondering why we are giving a country, a military and economic superpower like China, full access to secrets, our people and surveillance. It is a problem. My other colleagues have mentioned some of the problems we have had, such as Huawei, which actually used technology from Nortel, a Canadian company.

It is a big concern. This just came out a few hours ago in The Globe and Mail. It said, “China employed a sophisticated strategy to disrupt Canada's democracy in the 2021 federal election campaign as Chinese diplomats and their proxies backed the re-election of Justin Trudeau's Liberals...and worked to defeat Conservative politicians”.

[The Deputy Speaker, Chris d'Entremont]

The member cannot use the name of a member even in a quote.

The hon. member for Pitt Meadows—Maple Ridge.

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, I should have edited that quote.

Some of the technology has gotten into the Canada Border Services Agency, other security and RCMP. We need to change this. We need to protect Canadians and pass some of the amendments the Conservatives have brought forward.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Mr. Speaker, it should be remembered that the former Conservative government signed a foreign investment protection act with China that protected its investments in the event that Canada wanted to change legislation or do things in the interests of security.

Can the hon. member reflect on what the future of FIPA might be now that China and other countries have shown their true colours?

[Marc Dalton, Conservative, Pitt Meadows—Maple Ridge, BC]

Mr. Speaker, in 2017 there was a Chinese company called Hytera that purchased a B.C. company, Norsat. The Liberal minister of the day said that what was happening was no big deal. However, Hytera was brought up on 21 charges of espionage in the United States and banned from doing service; we invited them to do this.

We need to take care of business here and take our national security much more seriously.

[Gabriel Ste-Marie, Bloc, Joliette, QC]

Mr. Speaker, I thank my colleague for his speech. We know foreign investment is important in a globalized economy.

In 2001, which was before China became a member of the World Trade Organization, Jacques Parizeau wrote, “We do not condemn the rising tide; we build levees to protect ourselves.”

Unfortunately, weakening the Investment Canada Act has caused those levees to break. We agree that Bill C‑34 offers better protection, but it is not good enough.

I would like my colleague to comment on that.