Bill C-34

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

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, I would like to thank the member for her interesting speech. What is unfortunate is that there is a major problem in Bill C‑34. I do not understand why the government has not addressed it.

It had the opportunity to modernize the Investment Canada Act. It addressed national security. That is a good thing. However, there is another aspect, the net benefit review, which has an extremely high threshold. At this time, the threshold for the review of an investment is between $1.3 billion and $9 billion.

Does my colleague not find this threshold to be too high, and that it makes no sense to not examine investments that fall below that very high threshold?

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

Madam Speaker, I hate to have to do this, but in the time since you ruled on the previous point of order, we have not had any connection yet to the bill.

Perhaps, through you, Madam Speaker, we could remind the member to tie this to the bill, because we are actually talking about Bill C-34 and not a laundry list of funding announcements by the government that have nothing to do with the bill.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, I am pleased to rise today to speak on behalf of the residents of Davenport in support of Bill C-34, an act to amend the Investment Canada Act.

The Investment Canada Act, for those who may not know, is designed to encourage investment, economic growth and employment in Canada. It is a very important act for our federal government, because as we continue to try to create a stronger culture of innovation in Canada, as our economy moves increasingly from tangible to intangible or non-physical assets, as intellectual property becomes more important, and as we work to define the freedom to operate rules in Canada, acts like the Investment Canada Act are very important.

It is also an act that provides mechanisms to review foreign investments in Canada to ensure that foreign investment is a net benefit to Canada and does not harm national security. The rules in the act are established to provide investor certainty while giving Canada the ability to block individual investments under specific circumstances. This act is critical to ensuring a prosperous economic future for Canada and to guiding the right type of investments in our country.

Let us review some of the key changes to the Investment Canada Act that are being proposed by Bill C-34. It is not first time we have made changes to this act, but it is probably the largest set of amendments we have proposed since 2009.

The first thing the bill would do is to introduce a preimplementation filing requirement for specific investments. This would give the Canadian government more tools to review any proposed investments in sensitive business sectors.

It would also give authority to our Minister of Innovation, Science and Industry, in consultation with our Minister of Public Safety, to order further national security reviews of investments.

It would update penalties to strengthen deterrence of any behaviours we may not want.

It would introduce the authority for the Minister of Industry, again in consultation with the Minister of Public Safety, to impose interim conditions on an investment to reduce the risk of national security injury taking place during the course of the review itself, such as through the possible transfer of assets, intellectual property or trade secrets before the review is complete.

The bill would provide greater flexibility in mitigating national security risks by allowing the Minister of Innovation, Science and Industry, in collaboration with the Minister of Public Safety, to impose binding undertakings on investors. These undertakings would have to demonstrate that they adequately mitigate the national security risk that would arise from the investment in question.

Finally, the bill would allow Canada to share case-specific information with international counterparts to help protect common security interests.

The Investment Canada Act not only sets out the rules that would encourage more investment and trade in Canada, but also includes a number of measures that would serve to protect any foreign-made investments in Canada as well.

The economy is changing, the global trade and investment environment is changing, and so must our rules, legislation and regulations change. This would ensure that Canada is able to attract the best foreign investments and trade that would encourage economic growth, innovation and employment opportunities in Canada while also protecting Canada's national security and interests as they relate to trade and foreign investments.

As I mentioned earlier, this is not the first time that our Minister of Innovation, Science and Industry has updated the Investment Canada Act. He has done so at least three times in the last couple of years. The first time, in March 2021, he updated the national security guidelines in light of the then-evolving national security concerns to include investments involving sensitive personal data, sensitive technologies and critical minerals, as well as investments by state-owned or state-influenced investors.

The second time, we adjusted our federal government act to begin in February 2022, when Russia began its unprovoked and illegal attacks against Ukraine, creating an environment of heightened national security and economic risk. At that time, we put out a policy advising clearly that any investment with ties to Russia would only be found to be of net benefit to Canada on an exceptional basis. Moreover, any foreign investments with ties to the Russian state would also be viewed as potentially harmful to Canada's national security.

Finally, the third time we updated the Investment Canada Act was when the federal government announced a new policy related to foreign investment in Canadian critical mineral sectors. The policy advised that any investment in the critical mineral sector by state-influenced investors would only be approved as being a net benefit to Canada on an exceptional basis. Then we took quick action to block transactions that would be injurious to Canada's national security, and the government ordered the divestiture of investments by three foreign companies in Canadian critical mineral companies.

This announcement was a change in procedure, and it is also part of our efforts to modernize and improve the administration of Canada's investment review regime. Despite previously having the authority to announce decisions of this nature, the Government of Canada had traditionally not done so.

Again, it is not the first time updating the Investment Canada Act. Indeed, this bill is the latest in a series of actions our government has taken to ensure that we have the right tools and flexibility to protect Canada's national security interests. In turn, I believe that this would ensure an investment climate in Canada that is positive for economic growth both now and in the future.

Let me take a moment to relay some of the great investments we have already made in the area of innovation, science and technology with an eye to the future. For me, these are the types of investments that absolutely set Canada up for success both now and in the future.

In late January, the Minister of Innovation, Science and Industry announced an investment of $100 million through the strategic—

The House resumed from February 6 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.

Government Operations and Estimates

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, that is true, and Dominic and Flaherty met, but that does not fit the agenda the Conservatives have.

I asked if there were contracts under Stephen Harper, and the answer was yes. There were contracts with the company and the Stephen Harper government knew Dominic, yet they are saying it was a friendly, Liberal company and we gave it all these contracts. I would suggest it is a gross exaggeration to give the impression that this company received contracts from the government because of a friendship or a political affiliation. The Conservative Party knows that, but it does not matter. The fact is that the Conservatives want to focus their attention on character assassination. That is really what it is all about.

At the end of the day, we need to recognize that at times there is a need for outside contracts. This is not the only government that has outside contracts. Whether it is provincial, municipal or indigenous governments, or whether it is the private sector or one of the many different corporations or non-profit groups, at times they all go outside in order to get contracts, as Stephen Harper did with the same company they are asking the public accounts to look at.

They talk about how there has been growth. No kidding, there has been growth. Have they not been around for the last three years? Do they not realize that we have been going through a pandemic? Do they not understand that there has been a great deal of pressure on Canada's civil servants in our public sector?

We developed programs virtually from ground zero. The CERB program is a good example. I do not know offhand what contracts were awarded to McKinsey & Company, but I can say that many of the programs we established did not exist prior to the pandemic. Of course, we are going to be doing some work outside of the civil service when we have those types of demands.

I would hazard a guess that not only did Canada do that, but also the United States and European countries did likewise. I suspect people will find that over the last three years there has been an increase in contracting out for consulting and so forth. I would challenge the Conservative brain trust to clearly demonstrate that I am wrong with that assertion, but I do not believe they will be able to. I am not talking about the brain trust. I am talking about the examples.

At the end of the day, I believe that governments around the world were put in a position over the last few years, because of the worldwide pandemic, to reach out. Different times dictate different actions.

I am not too sure why the debate today on Bill C-34 had to be sidetracked. It seems that a majority of the House was in favour of it. I would like to have seen that bill considered for passage or have more time for debate.

It will be interesting to get feedback from the official opposition, in particular, as to how many hours they feel that piece of legislation should be debated. The issue we are talking about now would have been a better discussion to have at the committee stage and have an actual report that provides more details.

I can honestly say when I posed the questions earlier, like asking about Stephen Harper, I did not know what the answer was. I went to the table to ask if I could get a copy of the report, because I was told earlier that it is a very short report. I thought there might have been some thinking that went into the process of having the motion brought forward based on a discussion or some sort of explanation other than an instruction.

There are a lot of relevant issues that could have been talked about, like the issue of the procurement process and what we have to go through in order to be able to procure and get the many types of contracts we acquire.

How does that differ from previous years? If we do a comparison between 2008 and 2016 or 2021, I would anticipate that because of the pandemic there would have been an increase compared to the years prior.

Everything depends on what is on the agenda and what is taking place, not only here in Ottawa but also around the country and around the world. Having some of that background information would be far more fruitful than a simple motion that appears in the report.

As I indicated, I was not sitting at the committee. However, based on the fact that, I suspect, it was not a unanimous motion that was brought forward, and I am sure the members across the way will tell me if I am wrong on this, and that it was done in such a fashion that it did not allow for a proper study in the standing committee, I would question the rationale behind that.

We have had very clear indication from the Prime Minister that the issue is being looked at by two ministers, the Minister of Procurement and the President of the Treasury Board. They will be looking into the matter and ultimately reporting back. There is a high level of accountability on contracts that are issued, and that will continue.

However, to what degree did the standing committee actually ask the questions that needed to be asked and provide some background information for the report before it came to the committee, as opposed to making one demand and one demand only? I do not quite understand the rationale behind it. That is something I would have expected to hear about when the mover of the motion brought it forward.

If members review concurrence motions, they will find that the mover of this motion is not new to this. He has likely moved more motions for concurrence than anyone else. He is a mischievous little guy, I would suggest. At the end of the day, I really do think it is a legitimate question to ask of the committee: Why was there not any opportunity to get some sort of background analysis in terms of justifying the position that the committee has taken?

I would hope that members, in addressing this motion, will see it for what it is. This is not a genuine attempt for more transparency and accountability. That is what it is not. What it is is an ongoing attempt by the official opposition, in particular, to engage in personal attacks and character assassination. Anything that can be perceived as making the government look corrupt, the Conservatives will bring it up and they will hammer it because they do not want to talk about policy.

If we were not debating this, we would be debating investments into Canada, the type of investments that create thousands and thousands of jobs. We would be talking about the many good things that are happening and providing constructive criticism, no doubt, in terms of where or how we can change public policy. However, I do not believe the Conservative Party is interested in public policy at all. I believe it is only interested in one thing, and I have made reference to that and I find it unfortunate.

I would leave it at the point of saying to the opposition members that when time allocation happens to come in on some piece of legislation, I hope each and every one of them will reflect on the way they chose today, as opposed to debating government bills, to stay the course of character assassination and to usurp government business and take it as another opposition opportunity for debate, as opposed to debating government legislation.

Bill C-34 is ultimately a good piece of legislation, and it would have been nice to continue that debate and have those additional three hours of debate. Through that, 15 or 20 MPs have lost the opportunity to contribute to that debate, but we will have to wait and see.

[Kevin Lamoureux, Liberal, Parliamentary Secretary to the Leader of the Government in the House of Commons]

Mr. Speaker, it is an interesting process that we are going through today. I plan to speak on the issue, but we need to have a sense of why we are debating it today.

I would say I am surprised, but I am not. It is more a sense of disappointment. One would think that the Conservative Party, at some point, would recognize that what Canadians are looking for is leadership. Today is an amplification of what the Conservative agenda is all about. It is not to talk about its own plans or policy ideas, with cryptocurrency being the exception. At the end of the day, Conservatives are more focused on character assassination.

This is the reason I posed the questions earlier to the opposition, both members. The image they try to portray is one of corruption, yet in the answers they gave one would then have to try to make the connection to Stephen Harper. After all, Stephen Harper and his government were probably closer to the company and individual in question. I would say there is a very good chance, just based on the answers that were provided.

The Conservatives are very good at stating something inside and even outside the chamber that is factually incorrect. I suspect what we are seeing today is another attempt by the Conservative Party to look under all the different rocks to try to find something with which they can attack individuals on the government side, to give a false impression that the government is corrupt. That is the type of thing we have witnessed for eight years from the Conservative Party.

Today we are supposed to be talking about Bill C-34. Bill C-34 is about investing in Canada and protecting Canadians from a security point of view. Tomorrow is an opposition day. Why is that important? I believe that the Conservatives are once again discussing a motion that was passed in a committee.

I would like to look at how the motion passed in committee. I was not even in the committee, so I will have to speculate. I had to look at the report. It is not a very complicated report. I would summarize it by saying a majority of individuals on the committee got together and passed the motion so that the Conservative Party could debate a concurrence motion in the House. Conservatives across the way heckled, “Hear, hear.” That is what took place, as confirmed by the Conservative opposition.

In essence, they are hijacking another day of debate, when we are supposed to be talking about Bill C-34, so they can talk about this issue. They will say they should be able to talk about this issue. The rules do allow for that. We have opposition days. We have an opposition day tomorrow. One would think the Conservatives, if they were genuine in wanting to deal with this, would not need to coerce the Bloc, the New Democrats and I am not too sure about the Greens in bringing forward this detailed report. I say detailed report, but I could read it in a minute. That is how detailed the entire report is.

I have sat on standing committees, not too many, and they do some fantastic work. However, at times they get a little too political. When one does not even have any sort of background, details or real explanation and when all one has is a statement, which is the report, I need to question what the actual motivation was.

I believe the Conservatives have conned the other opposition parties. They have come up with a way that they can get a bonus opposition day. The ironic thing is they are going to be criticizing the government in the future for not calling Bill C-34. They are going to cry and say that they want more debate time on Bill C-34 or other government legislation and will ask why the government will not allow for it, yet they are wasting government time on this end.

It is truly amazing how the Conservative Party is so focused on the issue of corruption and does not care about the average Canadian and what Canadians are going through.

Let me read the report. This is the entire report:

That the Auditor General be called upon to conduct, as soon as possible, a performance and value for money audit of the contracts awarded to McKinsey & Company since January 1, 2011, by any department, agency or Crown corporation.

That is the entire report. I figure the 2011 was probably a compromise. The Bloc probably said that they needed to go beyond just the Liberal years to include some of the Conservative years. Maybe they had to compromise a little in order to get the agreement to ultimately get it to pass so the Conservative Party could have another bonus opposition day at the expense of debating government legislation. That is what I suspect.

National Security Review of Investments Modernization Act

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

Madam Speaker, I will be sharing my time today. With whom, I am not exactly sure yet, but it will happen after QP that somebody will come in and take the other half of my speaking time.

I am pleased to rise to speak to Bill C-34. This is an important piece of legislation to ensure we continue to keep up with the evolving global economy. We know there are a lot of great opportunities that Canada has been able to seize over the last number of years, and I will speak to one in particular in my riding in a few moments.

This legislation is there to enable the minister, whomever that may be, to ensure they can put the proper measures in place and take the proper approaches to not only maintain Canada's national security, but also enhance our economic security. The two absolutely need to go hand in hand.

A piece of this legislation I was particularly interested in was giving the minister the ability to improve information sharing with international allies. Having the ability to share information back and forth with our allies, with regard to various economic opportunities and various international companies, certainly will give us some ability to protect that security. We know economic security and national security go hand in hand, and they absolutely need to.

This particular piece of legislation, the Investment Canada Act, was established to provide investor certainty while reserving Canada's ability to block individual investments under specific circumstances. It is key to mention that, because it is not just about the security of our own nation or the security of Canada. When we talk about investing, we also want to make sure the rules are absolutely clear so that those who seek to invest in Canada know exactly what to expect. That is why this legislation is so important and why it is important to continually update it. The last time it was done, I believe, was in 2009. Now we are seeing it happen again as a result of changes in the global economy.

One investment opportunity coming to just outside my riding in Hastings—Lennox and Addington, which a Conservative member represents and I know she is very excited about, is a new opportunity that was announced last summer. It is with respect to a German-based company with ties throughout Europe, not just Germany, that invests in battery manufacturing. This company has chosen just outside of my riding, in her riding, a particular location in Ontario to establish what will become the largest battery manufacturing plant for electric vehicles in North America.

It is amazing because this company has chosen Ontario. I will tell the House why it chose Ontario. When it was looking at the various options, it basically shortlisted them down to three cities. I will not name the two other cities, but they were both in the United States. The reason Ontario was chosen was because of the company's ability to access clean energy. When the company is producing electric vehicle batteries, it takes a lot of electricity to run that process.

That company made it very clear in its press announcement that it wanted to know, when it is making a sustainable product, which is electric vehicle batteries, that the inputs into that product are sustainable themselves. The company knew Ontario, because of a former Liberal government, no longer burns coal. Ontario has one of the cleanest electric grids. I know the Speaker is from Quebec, and we can have a debate about this later on, but as a result that company chose Ontario because of access to clean energy.

I think it is very telling that the move toward sustainability is no longer just a movement that is driven by individuals and political leaders with these aspirations and ideas. We are now starting to see it built into corporate decisions. We are seeing these large multi-billion dollar companies, seeking to invest in other parts of the world, making the decisions and saying they want to know that they are using sustainable products to create their end product.

Umicore chose to set up in Hastings—Lennox and Addington just outside of Kingston. It will be investing, I believe, around $5 billion. The Government of Canada is also adding to that investment to establish this battery manufacturing plant. It will take the raw materials right to the end product that will be delivered to the car manufacturers.

There is a lot to be said about these types of deals, especially as we have been moving and transitioning into this new green, sustainable economy over the past number of years. It is critically important that, as we look for other countries and companies in other countries to do business with, the rules about investing in Canada are very clear. Companies like Umicore that want to invest billions of dollars in Canada want to know what the rules are and what they should expect from the government. I think that is fair, but we also have to have the ability to control our own national security by making sure that we make the right moves at the right time when it might not be in the best interest of Canada.

Ultimately, that is what Bill C-34 does. It puts us in a position where the minister, whomever that might be, whether it is the current minister or a future minister under a different government, is given the tools that are needed to make those decisions on behalf of Canadians.

There have been some comments in the House today about extending too much responsibility or giving too much power, perhaps, to a minister to make those decisions. However, it is important to remember that we elect people and put them in positions so they are able to make those decisions on behalf of Canadians. Sometimes those decisions have to be made relatively quickly. Therefore, empowering them with the tools to do this, so that they can continue to work on deals and make deals with companies like Umicore, which will be coming to my region, is incredibly important.

It goes without saying that I support this legislation. Every member in the House should support this legislation. I recognize, as the member for Louis-Hébert said before me, that he does have some concerns that he wants to raise at committee during the clause-by-clause process. That is important. It is part of the democratic process. Perhaps our bill could even be improved further by his contribution and the contribution of all members. I genuinely hope that all members will come to it with that understanding.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Madam Speaker, I want to thank my colleague from Louis‑Saint‑Laurent for his speech. Let us remember constituency names. It is important.

My colleague made some good points, but he did not talk about the major changes that Bill C-34 will make, including the new definitions involving businesses.

Does my colleague think this bill contains improvements or not?

[Gérard Deltell, Conservative, Louis-Saint-Laurent, QC]

Madam Speaker, I am pleased to take part in this debate, and especially pleased to speak after my colleague from Sarnia—Lambton.

We are here to discuss a bill that relates to national security, the trade relations Canada must engage in with other countries and the possibility of investors from other countries buying Canadian companies.

Let me make one thing clear right off the bat. China is going to come up a lot during this debate and in my speech. However, there is a big difference between the people who live in China, Canadians of Chinese origin and China's Communist government. These are completely different things, and anything negative we say about China's outsized ambitions relates to Communist China, not to individuals and certainly not to Canadians of Chinese origin.

This is about international trade. We welcome everyone who wants to invest here because we also want Canadians to be welcome in other countries. We are a free trade nation. Canada has more free trade agreements than any other country—over 40 in total.

Following an election in 1988, Prime Minister Brian Mulroney was mandated by the people to sign the free trade agreement with the United States. The famous agreement between “the three amigos”, the United States, Canada and Mexico, followed a few years later.

I would like to take this opportunity to pay tribute to my colleague from Abbotsford, who has been the architect of literally dozens and dozens of our free trade agreements with other countries. The member for Abbotsford was the minister of international trade for over six years. He was the longest-serving minister of international trade in the history of this country, and thank goodness for that, because we have great relationships with Asia, Europe and the Americas. That is the legacy of the member for Abbotsford.

As members will recall, when this government was elected in 2015, it shelved a few agreements, only to eventually renew them on the cheap, which is too bad. Still, Canada today is the land of free trade.

No one can claim to support free trade and say that Canada should go abroad but that our doors here in Canada should be closed. The doors must be closed in an intelligent way. That is why we have a number of concerns about this bill, which is essentially about tightening up security measures when it comes to national security reviews of foreign investments.

This bill basically provides for seven important changes to improve the national security review process for foreign investments. It also seeks to give the minister a lot more authority in certain circumstances.

The Conservatives do not disagree with the principle. However, as with anything, the devil is in the details, and that is where we need to do our job as parliamentarians. In principle, we agree that we need to revise the national security review process for foreign investments, but Bill C‑34 is seriously flawed, and we are going to talk about those flaws.

First, let us remember that the government's track record on foreign investments from China over the past seven or eight years is poor and fails to live up to expectations. In the early 21st century, China was not under the harmful influence and control of the current Chinese government. However, the situation has deteriorated since then and we are now paying the price.

In 2017, the industry minister did not ask for a full national security review prior to the acquisition of Norsat International, a communications company based in British Columbia, and its subsidiary, Sinclair Technologies, by Hytera Communications, a Chinese company belonging in part to the People's Republic of China.

In 2020, the Minister of Foreign Affairs awarded a contract to a Chinese firm, Nuctech, which was founded by the son of a former general secretary of the Chinese Communist Party, to supply X-ray equipment to 170 Canadian embassies. In a national security review, that checks off all the boxes. We are talking about X-ray equipment in our embassies and a contract was given to a company founded by the son of a former general secretary of the Chinese Communist Party.

In January 2022, the Minister of Innovation, Science and Industry did not follow his own guidelines when he expedited the purchase of the Canadian company Neo Lithium Corporation by the Chinese state-owned company Zijin Mining without a national security review.

Much of the automotive industry is going electric. Private companies around the world, manufacturers, are investing $500 billion in this shift. Electric cars require lithium. Canada has lithium. Now, however, the government has decided to let a Chinese company take over this natural resource that is essential for economic development in the 21st century. That is a huge loss.

I want to talk about another company that was mentioned earlier: Hytera Communications. In December 2022, the RCMP awarded a sensitive contract for communications systems hardware to Sinclair Technologies, which used to be a Canadian company, a wholly owned subsidiary of Norsat International. Norsat International was founded and based in Richmond but was acquired by Hytera Communications.

That is where things stand today after all these years of Liberal governance. Whether it is lithium, X-ray machines in our embassies, or security equipment for the RCMP, critical items are being funded by investors from China, a Communist country, need I remind the House.

There is a big difference between Communist China, Chinese people and Chinese Canadians. Shame on anyone who makes a connection between those elements; there is none. It is the Chinese government that is to blame.

Let us talk about Hytera Communications, which belongs to the People's Republic of China and is a major supplier to China's national security department. In December 2022, we learned that the Canada Border Services Agency used Hytera's communications technology equipment in 2017. Let us remember that Hytera is facing 21 espionage-related charges in the United States and was banned by President Biden himself. With friends like that, who needs enemies?

Pressure has mounted in recent years as companies tied to the Chinese communist regime have strengthened their positions here in Canada. The government has been slow to act on that, which is why it introduced Bill C‑34.

Essentially, Bill C‑34 gives the minister more powers, but the minister needs more still. Here are some ideas we are going to put forward during the committee's clause-by-clause study to improve this bill. First, all acquisitions subject to a net benefit review or a national security review must get cabinet approval regardless of the outcome of the investigation.

The bill also does not provide for the preparation of a list of autocratic countries that are banned from having Canadian companies or assets. I am talking here about China and Russia. The bill also does not include a net benefit test, or a measure of attempts to take control of key industries through acquisitions under the investment thresholds. Finally, the bill does not make any changes to the legal definition of a state-owned enterprise, which some consider to be too vague.

Let me be clear. We are in favour of free trade. Free trade means trade with other countries. That means that we can invest in other countries and other countries can invest here. Let me be clear, when it comes to China and the Communist Party that is currently in power there, we need to be incredibly vigilant. We need to recognize that they are not our natural friends.

We therefore need to enhance security measures to prevent mistakes, such as a lithium company ending up in the hands of the Chinese government, Chinese-controlled X-ray equipment in our embassies, and RCMP communications ending up in the hands of the Chinese government, from ever happening again.

Limits must be set, and that is what we want to do by improving this bill.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, I share the concerns of my Conservative colleague about Chinese investments, which are not always wise, and about the lax approach and lack of verification by this government.

I want to take this opportunity to mention that a Chinese spy was recently arrested at Hydro‑Québec facilities. We often hear the Liberals brag about the fact that they are working hard for the electrification of transportation. We are not seeing many results, but they love to talk about it. In fact, this Chinese expert was in the offices of IREQ, Hydro-Québec’s research institute, which is in my riding. He took photos and gathered information on our research into the electrification of transportation to send to the Chinese government. It takes some nerve.

All of that leads me to my question about Bill C‑34. At the time, in 2015, when I was elected for the first time, foreign investment notifications would have been sent to the government. According to government data, 10% of foreign investments were analyzed by the government in 2015.

The most recent data indicates that only 1% of investments are being analyzed. What does my colleague think of that?

[Marilyn Gladu, Conservative, Sarnia—Lambton, ON]

Madam Speaker, I will be sharing my time with the member for Louis‑Saint‑Laurent.

I rise today to address Bill C-34, an act to amend the Investment Canada Act. Bill C-34 is an attempt to update and strengthen the Investment Canada Act through seven significant amendments. Mainly, these changes to the act aim to protect Canada's national security with stricter regulations and higher penalties.

The main tenets of the bill attempt to introduce a pre-implementation filing requirement for specified investments. It would streamline the minister's ability to investigate national security reviews of investments and strengthen penalties for offenders. It would create regulatory power to generate a list of national security industries where automatic proposed acquisitions would be reviewed for national security harm, and it would provide ministerial authority to impose interim conditions and accept mitigation undertakings.

The bill would remove the Governor in Council, replacing it with the minister in making an order for further national security review, and involve the Governor in Council in the results of the national security review only if the investment is found, after investigation, to be injurious to national security. It supposedly would improve coordination with international partners and strengthen rules for the protection of information in judicial review proceedings.

In essence, this bill would give the Minister of Industry more time and authority to assess foreign transactions that might compromise national security, by removing the Governor in Council from the initial process while also making more severe the penalties for violating the Investment Canada Act. This, on its face, is beneficial and necessary, but there are several gaps that need to be addressed, which I will outline later.

Threats to our national security and sovereignty come in a dizzying array with regard to scope and creativity. Today, I want to focus on threats to our national security via our economy by investment from actors with malicious intent. There is just cause to update and strengthen the Investment Canada Act to prevent such threats or, at the very least, reduce the number of threatening actions made to Canada's economy and national security via investment. There exists a scary number of examples wherein Canada's national security was jeopardized due to a lack of due diligence on behalf of the industry minister with regard to foreign direct investment.

The industry minister's 2021 mandate letter directed the minister to do the following:

Contribute to broader efforts to promote economic security and combat foreign interference by reviewing and modernizing the Investment Canada Act to strengthen the national security review process and better identify and mitigate...security threats from foreign investment.

The keywords here are “better identify and mitigate...security threats”. There is ample evidence to show why the Prime Minister so directed the industry minister, as the Liberal record on allowing bad actors to invest in Canadian companies, and therefore our intellectual property and data, is rather horrifying.

In 2017, the Minister of Industry failed to request a full national security review of the acquisition of a B.C.-based telecommunications company, Norsat International, and its subsidiary, Sinclair Technologies, by China-based Hytera Communications, which is partially owned by the People's Republic of China. The Chinese government owns about 10% of Hytera Communications through an investment fund.

The United States, our largest and most important trading partner, blacklisted Hytera in 2021. Its Federal Communications Commission stated that the company “pose[s] an unacceptable risk to the national security of the United States or the security and safety of United States persons”. Sales and import of Hytera equipment are banned in the U.S. as a result, and our industry minister let this company, with its ties to the Chinese ruling Communist Party, buy a Canadian company.

It gets better, or should I say, it gets worse. Hytera Communications is also facing 21 charges in an American espionage case. The United States Department of Justice is accusing the firm of conspiring to steal trade secrets from Motorola. We know this tactic has been used before by the Chinese government, and yet our industry minister okayed a sale of a Canadian company right to it.

In 2019, Manitoba-based Tantalum Mining Corp. of Canada Limited, also known as Tanco, was purchased by the Chinese company Sinomine Resources. The purchase was approved by the Liberals with no national security review. The mine produces lithium and more than 65% of the world's cesium, which is used in drilling applications, as well as Canada's largest deposit of tantalum, which is used in electronics.

Sinomine was recently ordered by the government, in November, to divest itself of its investment in Power Metals Corp, a different mining exploration firm in Vancouver, but the government was apparently totally fine with its continued ownership of the Tanco mine and its critical minerals operations, as its divestment order said nothing about it.

In 2020, our Department of Global Affairs awarded a $6.8-million contract to state-owned, China-based Nuctech, which was founded by the son of the former Chinese Communist Party secretary general. That is $6.8 million of Canadian taxpayer money basically going directly into the Chinese Communist Party's pockets, along with precious data.

As John Ivison wrote for the National Post in 2020, “Nuctech is known as the 'Huawei of airport security'”. The contract was to supply security equipment for 170 Canadian embassies, consulates and high commissions around the globe. A security industry source told Ivison for the story that he was concerned there were now “significant pieces of Chinese technology sitting in every embassy” and that the contract included delivery, installation, operator training and software.

For the same article, Guy Saint-Jacques, a former Canadian ambassador in Beijing, explained that the Chinese business strategy overseas is to win market share and, once dominant, dictate prices, illustrating that not only are there security concerns with these problematic investments, but there are also long-term economic implications. We cannot continue to let China and other actors with malicious intent interfere with Canada's economy and national security, even if they do offer the lowest prices for the service.

That said, the pattern of allowing risky investments without full security reviews continues. It was apparently briefly acknowledged in 2021, with the industry minister updating and enhancing guidelines for national security reviews of transactions involving critical minerals and state-owned enterprises in March of that year. However, 2022 saw a number of lapses, even with this enhanced protocol.

In January 2022, the minister failed to follow his own updated guidelines when he fast-tracked the takeover of the Canadian lithium company Neo Lithium Corp. by Chinese state-owned Zijin Mining, again, without a national security review.

Wesley Wark, a visiting professor at the University of Ottawa who specializes in international affairs and intelligence gathering, told the industry and technology committee, while studying the takeover after the fact, that it was a mistake. The value of the transaction was close to a billion dollars.

Then, in November 2022, the minister ordered three Chinese companies to divest their ownership of three critical minerals firms, but Neo Lithium was not included.

In December 2022, possibly the worst offence, the RCMP awarded a contract to supply sensitive hardware for its communications systems to Sinclair Technologies, which, members will recall, was sold to Hytera Communications, the Chinese company partially owned by the Communist Party and blacklisted in the U.S.

It was also revealed in December of that year that the Canada Border Services Agency has been using communications equipment and technology from Hytera. A CBC story says that Public Services and Procurement Canada did not take into consideration the security concerns about Sinclair and its ownership during the bidding process. The difference between that and Quebec-based Comprod's offer was $60,000. The Liberals love to hand out money left and right, but they could not spend $60,000 to keep our security hardware domestically sourced and provide Canadians with jobs while we are at it.

As we can see, the bill is sorely needed, but there are a few areas for improvement within the bill itself.

I do not like the part that gets rid of the Governor in Council approval and gives power just to the minister. I think that should be fixed. The legislation should also consider updating the act's definition of a state-owned enterprise, which is now too vague. There is no provision to block any subsequent takeover by a state-owned enterprise of a previous Investment Canada Act-approved acquisition.

It is my hope that the government learns from its mistakes, listens to the opposition parties and experts, and gets this legislation right. We cannot keep selling off parts of our economy, national security and precious resources to bad actors.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Madam Speaker, Canada has billions of dollars' worth of foreign investment coming into the country, and the member would know full well that billions of dollars leave Canada to be invested around the world. I would like to think that given the billions of dollars leaving the country, maybe we could revisit the issue and look at investing here in Canada.

At the end of the day, I truly believe that we need to modernize legislation, which the minister proposed in Bill C-34. It should allow for not only more investment but a healthier system. A healthier system that provides more stability not only would attract more foreign investment, but would, I would like to think, keep a lot of the dollars already in Canada invested in Canada.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Madam Speaker, I am glad to see you back in the chair as well.

I want to start by thanking my constituents for giving me the great privilege of being able to rise in the House to speak on their behalf to the issues they are concerned with these days. To the constituents back home, the debate today is on Bill C-34, which is amendments to, although the government calls it the modernization of, the Investment Canada Act. The specific name given in the bill is the national security review of investments modernization act. For everything that is wonderful, it seems the government will always call it “modernization”.

Maybe I will take a different tack than other members have taken. I find that for every piece of legislation, whether it is Liberal, Conservative or a private member's bill, it is the moment it is tabled and the events that lead up to it that are important. This particular piece of legislation, let us to be serious, is about the People's Republic of China and state-owned investments being made in Canada, whether those are investments that contravene our national security interests or investments that, in the long term, are not in the interest of the Canadian economy or the Canadian worker.

We have seen the experience of other countries all across the world over the last two decades, since the People's Republic of China was allowed to enter the WTO, and that relationship has changed the world economy. I believe this is a response to the behaviours of the government of Beijing over the last two decades.

Madam Speaker, we were in the United Kingdom, in London recently, and we met with individuals who spoke about the general relationships the United Kingdom has. I had the great honour to return to the Palace of Westminster to hear from Alicia Kearns, chair of the foreign affairs committee in the United Kingdom. There was a long meeting held about the British business relationship with the People's Republic of China.

It was fascinating to hear experts in the field describe not only the pros, the cons, and the pitfalls for British businesses having to share their IP and technology, but also the footprint of their businesses and the exchange of workers that go and back. Some of these workers from the different provinces in China would eventually want to stay in the United Kingdom. They would be applying with and leaving to go to competitors. They talked about the long term, and the three stools of relationships, which are government to government, business to business, and people to people, and how all three are incredibly important.

In describing Canada's relationship, as the Canadian government, businesses in Canada and the people of Canada, I think our relationship with Beijing could be defined as broken at the government level, the business level and the people-to-people level.

I have a Yiddish proverb. Members know I really like them.

[Member spoke in Yiddish]

[English]

The proverb means, “The match was a success; they were broke inside of six months.”

Although the timeline is different in this particular situation, over the last six, seven, eight years, we have seen a broken relationship. There was an attempt by the Liberal government to negotiate a memorandum of understanding for a free trade deal with Beijing. That fell apart completely.

We basically had a freezing of the relationship while Canada dealt with the Meng Wanzhou case in Canada, and the Government of China held two of our citizens for no good cause. It was hostage diplomacy. One thing I heard repeatedly when I was in the United Kingdom, shared to me by both lords and ladies, and by members of their Parliament, was that it is also incumbent upon Beijing to watch the language that they use in international diplomacy.

It is not just incumbent upon us to raise issues of human rights, which are incredibly important to the people of Canada, and people in my riding as well, to that business relationship. There is an effect when politicians raise issues of human rights and that has a direct impact on business interest in China. I know in the case of Alberta, we export a lot of agricultural goods. Chinese companies are amazing purchasers of things such as canola, pork, lentils and other products that western farmers love to produce, and it is a great market for agricultural products. I do not represent an agricultural riding, but it has an impact on my riding as well, because many people who live in my riding have family members who continue to farm on their operations.

The events that have led to this today go beyond just the balloon drama that we have had over the last few days, and I know we all like to make jokes about it. We have all had enough puns.

I think the last review for the Investment Canada Act was around 2009, but let us look at the behaviour of the Government of Beijing. Right now, 47 of the most prominent pro-democracy activists, legislators and people who are interested in protecting the civic institutions of the city of Hong Kong, are on trial. The largest trial of democracy activists in Hong Kong's history is being held right now, and it does not look very positive for them. I hope the trial will go their way, but I am not very confident.

We have an amazing relationship with the people and the Government of Taiwan. The senior Taiwanese opposition leader, the vice-chairman of the Kuomintang, or the KMT, Andrew Hsia, is right now leading a delegation to Beijing's office dealing with Taiwan relations. That is happening as we speak.

In the United Kingdom, there is a semiconductor company called IQE, which is the acronym for its name. It happens to be in Wales, and as the Speaker would know, we were in Cardiff as well. The company is informing the government that, because of the delays in reaching a strategy on semiconductors in the United Kingdom, it might move out.

That is not unheard of. It is something that is happening across all western economies right now as businesses are seeking opportunities from foreign investors to help build a plant, finance their operations and manufacture goods. They are having to review where the funding is coming from and what kinds of strings are attached to it. That is what I see in this piece of legislation.

Although different members have mentioned that there are shortcomings, and the member for South Shore—St. Margarets itemized a list of concerns that Conservatives have with this particular piece of legislation, I think there are opportunities. Reuters very recently noted the fact that this Parliament has now called for the resettlement of Uighurs, particularly those who are facing a genocide in China, perpetrated by the Government of Beijing in the Xinjiang region, which will now be resettling them.

That will also have an impact on the business-to-business relationships, because the government in Beijing considers any mention of it, by any parliament or government, as worthy of retribution. Typically, it is business retribution. I am sure that, if I applied today for a business or tourist visa to go to mainland China, I would very likely have it refused, and I accept that.

Bloomberg recently reported that aluminum products that are entering the United States are being detained at the border because they are suspected of being connected to forced labour in the Xinjiang province.

Just last week, the member for Dufferin—Caledon had an Order Paper question come back to him from the Government of Canada saying that it has seized zero products in Canada related to forced labour in one particular province in the People's Republic of China, while the United States' government has been seizing hundreds of millions of dollars' worth of goods because it has evidence they were produced illegally using forced labour.

Another recent event I will bring up is that President Xi has called for more efforts to accelerate the establishment of a new pattern of development. This has been reported by the Xinhua state news agency. Its focus is on dual circulation, security and self-reliance.

With respect to the piece of legislation we are considering here, and I support sending it to committee to do further reviews, I do not think we should kid ourselves. This is indeed about the People's Republic of China. It is about the Government of Beijing, its behaviour in other countries, and what it might intend to do in Canada or has done in the past.

In the last election, at a minimum, we called for the automatic review of transactions that involved sensitive security sectors, such as defence, artificial intelligence and rare earth minerals. That is what a committee of Parliament should do, review what other sectors or economies should be reviewed. I think that, with respect to all state-owned entities that come from mainland China, we should set the bar at zero. They should automatically be reviewed. I am not worried about state-owned companies from the Republic of France or the Republic of Poland, but I am concerned about the People's Republic of China and its direct control of state-owned companies.

While we have a broken relationship, as I referred to in my Yiddish proverb, there is a relationship that we have brought to this point. That is not entirely the fault of the Canadian government. The Government of Beijing held two of our citizens hostage, and there are consequences to every action. I consider Bill C-34 part of the consequences that must be put on that government for the genocide of the Uighurs; the bad relationship it has developed with our people, our government and our businesses; and lastly, for engaging in hostile diplomacy and holding the two Michaels hostage.

[Xavier Barsalou-Duval, Bloc, Pierre-Boucher—Les Patriotes—Verchères, QC]

Madam Speaker, I want to commend the speech given by the member opposite in support of Bill C‑34, which gives the Minister of Innovation, Science and Industry a little bit more power to review foreign investments. That in itself will be good for national security. However, I do not think we should limit ourselves to national security, but rather, I think other criteria should be added for reviewing an investment.

On the subject of investment review, my colleague across the aisle used to be a cabinet minister in this government, and I remember one particular case at that time, the sale of Rona, that required a government review. Before authorizing the sale, the net benefit had to be reviewed. It was not a matter of national security, but the net benefit still had to be reviewed.

We submitted an access to information request to find out the contents of that mysterious net benefit review. The response that came back was that there was no documentation that corresponded to our request.

I cannot help but wonder whether this government's reviews really are all that rigorous, or are they done based on the weather forecast or a coin toss.

[Bardish Chagger, Liberal, Waterloo, ON]

Madam Speaker, today I rise to speak to Bill C-34, an act to amend the Investment Canada Act.

Bill C-34 implements a set of amendments to improve the national security review process of foreign investments and modernize the Investment Canada Act. Collectively, these amendments represent the most significant legislative update of the ICA since 2009.

These amendments would also ensure that Canada's review process is consistent with those of our allies. This consistency is something that business owners and stakeholders within the riding of Waterloo have also spoken to me about. It is something that is important to them, as Canada is a trading nation and being aligned with our allies is something of importance.

Canada has a long-standing reputation for welcoming foreign investments and a strong framework to promote trade, while advancing Canadian interests. In fact, Canada has one of the earliest and most robust screening processes for foreign investments in the world.

For some history, the Investment Canada Act was enacted 38 years ago in 1985, to encourage investment in Canada that contributes to economic growth and employment opportunities. The act allows the government to review significant foreign investments to ensure that these benefits exist. The act was updated in 2009 to include a framework for a national security review of foreign direct investments. Since then, and for the longest time, the ICA has been one of the only pieces of legislation in the world that provides a reviewing mechanism for the net benefit and national security threats of foreign direct investments.

It is clear that the federal government has long played a leadership role in setting a framework for investment review that attracts needed positive foreign direct investments without compromising on national security. However, the world looks a lot different now than it did in 2009. The global market has rapidly changed along with shifting geopolitical threats. Canada is growing and our interactions with the rest of the world are changing.

The government has seen a rise in state-sponsored threat activities from hostile state and non-state actors. They are attracted by Canada's technologically advanced open economy and world-class research community. This is something we know very well in the riding and region of Waterloo.

The level of sophistication of these threats has also increased. Hostile state and non-state actors are deliberately pursuing strategies to acquire goods, technologies and intellectual property through foreign investments that could damage Canada's economy and undermine national security while possibly controlling the supply chains of critical goods. These concerns are real and are why debating and advancing legislation is necessary.

The COVID-19 pandemic has created additional vulnerabilities that could lead to opportunistic and potentially harmful investment behaviour by foreign investors. In response, the government has taken swift, concrete action to enhance scrutiny on inbound investments related to public health and critical goods and services. The government has again taken action recently by enhancing scrutiny on investments involved in sensitive goods and technology, such as critical minerals, critical infrastructure and sensitive personal data.

Through these investments, the government is prepared to once again take action to strengthen the national security review, while allowing for positive foreign investments. Canada is a trading nation and we work with international allies. The reality is that economic-based threats to national security are an area of increasing concern, not just for Canada but for our allies as well.

Other jurisdictions internationally are moving in response to the shifting geopolitical threats either by amending or by putting in place new investment screening regimes. Our action is needed to bring Canada into greater alignment with our international partners and allies. For example, I understand that Australia has updated its laws on foreign direct investment. It made a prominent change by introducing authorities to protect national security in January 2021. These include fresh powers for the Australian government to require mandatory notification for transactions involving a national security business before the transactions are closed.

Additionally, the United Kingdom introduced a new stand-alone regime on national security and investment in January 2021. The act creates, for the first time in the U.K., a mandatory obligation to secure clearance for transactions that acquire control of a business in around 17 specified and sensitive sectors before they are completed.

The U.K. has also introduced legislation that allows the government to impose interim orders while the review is being conducted, preventing foreign investors from obtaining confidential information or accessing sensitive sites or assets until the review is complete.

Our cousin to the south, the United States of America, overhauled its foreign direct investment laws in 2018. The amendments added new types of transactions subject to government review and, for the first time ever, mandated notification of transactions involved in critical technologies, certain critical infrastructures or sensitive personal data of American citizens. New regulations fully implementing the act took effect in February 2020.

The proposed amendments in Bill C-34 would address the concerns we have heard from Canadians and which have been echoed by our allies. The proposed amendments in Bill C-34 would address these concerns by introducing new preimplementation filing requirements for specified investments, as well as the power to implement interim conditions during national security review of the investment.

This would provide Canada with the new governance capacity to address the increasingly complex threat landscape. Bill C-34 would also ensure that Canada's foreign direct investments screening regime remains world-leading.

As I have shared, Canada and our allies share similar national and economic security concerns. They are concerned with threat actors acting and operating in multiple jurisdictions to secure a monopoly in critical assets and technology.

It is becoming increasingly important to share information with allies and support national security assessments to prevent these threats from happening.

Previously, the minister had limited capacity to share case-specific information with international allies. Bill C-34 would introduce the authority for more threat information sharing by the minister with international counterparts for national security reviews.

This could help both Canada and our partners defend against an investor who may be active simultaneously in several jurisdictions and be seeking same sensitive technology or critical assets.

For example, the amendment would allow the minister to reach out to a foreign partner and disclose information about the investor to gain additional information and to support Canada's own national security assessment. That said, Canada would not be obligated to share such information where there are confidentiality or other concerns.

There is never a shortage of critics, but this legislation is about making sure that Canada welcomes foreign investment and trade that encourages economic growth, innovation and employment opportunities in Canada for Canadians.

I believe that this approach is pragmatic and principled, and provides a coherent and solid framework to address evolving geopolitical threats while allowing Canada's review regime to be more aligned with our international allies. If there are ways to make this legislation better, I believe we have the opportunity now to work together to make that happen.

We are currently at second reading. This legislation is being debated in the House. To see it go to committee where it can be further scrutinized, where witnesses can attend and appear and amendments can be made, would really allow for this legislation to work for more of the Canadian economy.

With Bill C-34, Canada would continue to encourage positive investments without compromising national security. I think it is really good that this legislation is being debated as a stand-alone piece of legislation, where we actually can get into the details of what would work better, because it is important we have legislation that promotes and supports foreign investment but also makes sure we do not compromise national security.