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

[Todd Doherty, Conservative, Cariboo—Prince George, BC]

Madam Speaker, in general, Conservatives like elements in Bill C-34. However, we believe that the bill does not go far enough.

In the spirit of collaboration, Conservatives put forth 14 amendments and only four were agreed to by our colleagues across the way. It is funny, because the Liberals always say not to worry, that they will work collaboratively across the aisle in committee and will get things done.

There is one thing this bill does not do. It took away the requirement for cabinet oversight in determining whether an investment is a threat to Canada's national security. It gives sole responsibility to the Minister of Industry and the Minister of Public Safety.

Why does the government always preach collaboration, but in the spirit of fairness, did not work with Conservatives and other opposition parties to agree to the other 10 of the 14 amendments?

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Madam Speaker, I sit on the industry committee with the hon. member, and I appreciate his intervention. We will always talk about the Investment Canada Act and how foreign companies are investing into Canada and creating good-paying, middle-class jobs for Canadians from coast to coast to coast. That is what I am doing in my speech this morning.

Tools such as the Investment Canada Act must also be modernized to offer additional protections in light of changing geopolitical and technological advancements and to prevent hostile actors from exploiting Canada's expertise and capacity for innovation. We must all be aware of geopolitical risks, and that they and instability are now fixtures in our operating environment, especially for businesses. Hostile state and non-state actors pursue deliberate strategies to acquire goods, technologies and intellectual property. They do so in ways that are fundamentally incompatible with Canada's interests and principles. We also know that foreign investments can be used as a conduit for foreign influence activities that seek to weaken our norms, values and institutions.

Members will recall that the Investment Canada Act played an important role in Canada's response to the Russian invasion of Ukraine. As early as March 2022, we issued a policy statement saying that any investment, controls or influence by the Russian State will also support a determination by the minister that there are reasonable grounds to believe that such an investment could be injurious to Canada's national security, regardless of its value. The statement sends a clear message about our commitment to protecting Canada's economic security from unwanted investment. Moreover, Canada's Indo-Pacific strategy is clear that the region will play a critical role in Canada's future over the next half-century. The significant opportunities for economic growth in the region are also accompanied by challenges related to the objectives of certain world powers that do not share our democratic and liberal principles.

We must respond to this reality in a number of ways, including in the way foreign investment is assessed and examined. In short, the Investment Canada Act plays a key role in protecting Canada's economic interests from hostile foreign actors. It is broad in scope and allows Canada to respond to changing threats that may arise from foreign investment, while protecting Canada's openness to beneficial international investment.

Again, I would like to say that this morning, the OECD stated its numbers for foreign direct investment in Canada, which OSFI operates through the Investment Canada Act to a large degree. Canada, for the first half of this year, came in third place behind the United States and Brazil. That is all the OECD rankings of over 30 countries. We are on the right path of continuing to grow the economy, attracting foreign investment from all over the world, along with our domestic companies investing. The act is broad in scope and allows Canada to respond to changing threats that may arise from foreign investment, while protecting Canada's openness to beneficial international investment.

The package of amendments proposed in this bill is designed to assure businesses and investors that Canada has a clear, predictable and stable regulatory regime. The nexus between technology and national security is clear and is here to stay. Rapid technological innovation has provided Canada with new opportunities for economic growth, but it has also given rise to new and difficult policy challenges.

More and more, Canada is being targeted by hostile actors. That threatens both our national security and our prosperity. Our government must therefore adapt our tools to more effectively defend us against current and future threats.

All around the world, foreign investments are now coming under much closer scrutiny from a national security standpoint, also considering various factors such as the impact of the COVID-19 pandemic, the repercussions of climate change on security, global supply chain disruptions and changing geopolitical considerations.

We are equipping ourselves today to face the threats of tomorrow. Canada will remain a destination of choice for foreign investment.

Now, more than ever, we need to make sure we are doing everything we can to foster an innovative, healthy and growing economy. The guidance and decisions issued over the past several years make clear that some transactions, particularly those by state-owned or state-influenced investors, may be motivated by non-commercial interests and imperatives that could harm Canada's national security.

I will repeat that these types of investments in sectors deemed sensitive currently face enhanced scrutiny under the Investment Canada Act. Our government believes that an effective review regime must be robust, transparent and flexible to adapt to a changing world and now is the time to make these changes. I believe the last changes were made in 2009. That is why we stand today to vote in favour of this bill, which represents the most significant amendments to the ICA since 2009.

We are making important moves now to review and modernize key aspects of the act while ensuring that the overreaching framework to support foreign investment to grow our economy remains strong, open and, I would add, flexible. Our record as a government makes it abundantly clear that where national security is concerned, we will not shy away from decisive action. Our assessment of risk keeps pace with evolving economic and geopolitical circumstances.

The ICA already gives us much of the authority we need to intercede and address national security risks that can arise from foreign investments. These amendments build on a strong foundation and will improve the mechanics around national security review of investment. Now is the time to act decisively so that we can make sure that Canada will continue to gain the economic benefits of investment while strengthening our ability to address threats to our country and ensure its future prosperity.

We recognize that Bill C-34 has undergone a rigorous, robust study spanning across 11 meetings. I applaud the members of the industry committee on this process. During those meetings, we heard from a variety of legal and subject-matter experts, who testified about the benefits that foreign direct investment has on Canadian businesses, the importance of protecting Canada's intellectual property and the need to ensure a regime that is capable of tackling the emerging national security challenges that Canada and our security partners are facing in the liberal democracies of the world.

We have engaged meaningfully with opposition members to discuss their perspectives and concerns and have worked collaboratively to bring new amendments that will further strengthen the bill. We have worked together to ensure that Canada's foreign investment regime continues to be the gold standard.

Bill C-34 will provide us with better tools to protect our national security. It will also help to bring Canada into greater alignment with our international partners and allies. My colleagues heard from witnesses at INDU about how important it is for Canada to have a regime comparable to its allies. Having a comparable regime helps to address common threats and maximize our collective effectiveness.

We all know that the amendments proposed in Bill C‑34 will contribute to that important balance. We have to protect Canadians and Canadian businesses while ensuring that investors continue to see Canada as a destination of choice.

Yes, Canada is the first destination of choice for foreign investment.

We know that Canada and our allies share similar national and economic security concerns. Our allies are concerned with threat actors operating in multiple jurisdictions to secure a monopoly in critical access in technology. We see that with critical minerals. It is becoming increasingly more important to share information with allies to support national security assessments to prevent these threats from happening.

This new information-sharing authority strengthens co-operation between Canada and other like-minded countries to defend against an investor that may be active in several jurisdictions seeking the same technology, for example, and having motives ill toward. That said, Canada would not be obligated to share such information where there are confidentiality or other concerns.

I want to thank my esteemed colleagues for their attention today. I can assure members that our approach is pragmatic, principled and collaborative. It provides a solid framework to address evolving geopolitical threats while allowing Canada's review regime to be more aligned with our international allies and in the interests of Canadians. The collaborative efforts during the INDU committee ensure that we meet these goals, which is why I believe that this bill, as amended, should be adopted and referred to the Senate.

We are confident that with Bill C-34, Canada will continue to encourage positive investment that will grow our economy and create good jobs in all ridings across Canada. I do not think there is a riding in Canada that does not have some form of foreign direct investment in it or that is not affected by foreign direct investment. It should always be done in a positive, long-term and sustainable manner without having to compromise on national security. We know that in today's world there are actors, foreign-state actors and non-state actors, who have ill intentions towards the liberal democracies of the world, including our blessed home here in Canada, and so we need the best of both worlds.

I hope all of us can work together to stand for Bill C-34 to get it to the Senate for further study and make this bill law to strengthen Canada's economic and national security.

It has been a pleasure to speak to this bill this morning. It was great to see the OECD comment with respect to Canada's reputation for foreign direct investment and coming into third place for the first half of the year. We have seen flows in foreign direct investment via countries across the world, with Canada being increasingly the destination of choice. There are the Volkswagen investment and the Stellantis investment, as well as Honda, Toyota and other entities. There are investments in Kingston, investments in Northvolt in Quebec and investments in B.C. that are happening. Across the board, we see foreign companies choosing Canada to invest their dollars for their shareholders to create wealth here in Canada. It is something that is great to see. We need to encourage it from all sides of the House.

I thank hon. members for their attention this morning. I look forward to hearing their questions and comments.

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

Madam Speaker, I rise on a point of order. I am just wondering about relevance. We are talking about foreign investment into Canada and about Bill C-34. The hon. member is talking about artificial intelligence and investment in Montreal, which has absolutely nothing to do with the bill.

[Francesco Sorbara, Liberal, Vaughan—Woodbridge, ON]

Madam Speaker, it is great to take the floor in the most honourable House to speak to a very important topic, Bill C-34, the Investment Canada Act modernization.

Before I get into my formal remarks, perhaps it is a coincidence, although I do not think so, that this morning the OECD released its foreign direct investment numbers, and Bill C-34 deals with foreign entities investing in Canada, Canadians and our communities. Canada came third in the OECD ranking for the first half of 2023. First is the United States, then Brazil, ourselves and Mexico. I think that speaks not only to the confidence of foreign entities, companies and corporations investing in Canada, creating jobs, wealth and great futures for Canadians, but also to what I would say is the idea that confident governments invest in their people and their communities. That is something we, as a government, have done since 2015 with respect to the Canada child benefit, the Canada workers benefit, the implementation of an early learning and national day care plan, the support for students by eliminating interest on student debt, and the two middle-income tax cuts: the first in 2015 from 22% to 20.5%, with roughly $3 billion to $4 billion a year, depending on tax filings, in savings for Canadians, and raising the basic personal expenditure amount to $15,000, which in the fiscal year 2024-25 will deliver over $6 billion in savings for Canadians from coast to coast to coast. Confident governments invest in Canadians and Canadian communities.

I am grateful to hon. members, my esteemed colleagues, for giving me the opportunity to speak to Bill C-34, an act to amend the Investment Canada Act.

So far, the House of Commons has voted unanimously in favour of these objectives. The bill has been thoroughly studied by the members of the Standing Committee on Industry and Technology. We encourage the House to send this bill to the Senate for consideration. Everyone already knows that this legislation plays an important role in our economy and helps make Canada a destination of choice for foreign investment.

Foreign investment in Canada is booming. We have seen it in the auto sector, the mining sector, the food processing sector, the agriculture sector and so many sectors across this country, because Canada is a destination of choice for foreign investment. It creates jobs. It creates futures.

The act helps create business-friendly conditions based on a stable and clear set of regulations.

We need a stable and clear system in place to attract foreign investment, and Bill C-34 would do exactly that.

The act encourages economic growth and employment. It provides for intervention only if an investment is potentially harmful to Canada's national security, but it also permits quick action and judgments as circumstances warrant. That is what we intend to accomplish through the amendments made by Bill C‑34.

The time has clearly come to modernize the Investment Canada Act and bring it in line with the times. Our industries are still some of the most dynamic in the world. However, Canada is confronting unprecedented geostrategic and national security challenges.

Indeed, Canada remains a destination of choice for foreign investment. It continues to grow and to create good middle-class jobs from coast to coast to coast. This investment helps businesses prosper and grow, creates good-paying jobs and ensures strong economic growth that benefits all Canadians. Canada has a long-standing reputation for welcoming foreign investment 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 direct investments. The Investment Canada Act, the ICA, was enacted 38 years ago, in 1985. The act allowed the government to review significant foreign investments to ensure that these benefits exist. It was updated in 2009 to include a framework for a national security review of foreign direct investments.

The world in which Canada now operates is increasingly characterized by the complexity of linkages between economic competition and the geostrategic clashes. We see it on a daily basis. Globalization has brought new threats to Canada's national and economic security, but of course many benefits also. Canada must have the tools and resources to protect its assets from economic threats to national security when those are deemed so. The Investment Canada Act must, therefore, also continually adapt to these considerations. The complexity of these dynamics can be seen in the increased volume of activity under the act in recent years. Indeed, there have been more national security reviews since 2020 than in the entire previous decade. The review process is also increasingly complex as international transactions and ownership structures are increasingly becoming more complicated and, in some locations, more opaque.

The proposed modernization of the Investment Canada Act is designed to make the review process more efficient and transparent. Bill C-34 sets out a series of amendments to improve the national security review process of foreign investments and to modernize the Investment Canada Act. Collectively, these amendments would be the most significant legislative update of the act since 2019. These amendments also represent one of the multiple steps the government has taken to ensure that we can defend our economic interests, contribute to global supply chain resiliency and protect our national security. This, in turn, would help us to attract stronger partnerships with our allies to foster economic growth. A stronger foreign investment regime attracts good, beneficial investments into Canada, ones that would create high-quality jobs and opportunities for all Canadians. We have seen this with the $7-billion investment by Volkswagen and the multi-billion dollar investment by Stellantis. We see it with Honda and Toyota, in Alliston and Cambridge, where they continue to invest hundreds of millions of dollars, and billions of dollars initially, in creating quality good-paying jobs for Canadians here in the province of Ontario, with a supply chain that stretches from coast to coast.

Defending our economic interests and protecting our national security interests are of critical importance, especially in the current climate of rapidly shifting geopolitical threats. This issue is a non-partisan one. During the six sitting days that Bill C-34 was debated, the House has repeatedly stressed the need to modern the ICA to achieve those objectives. The House ultimately decided, in a unanimous vote, to refer the bill for study, because we all recognized how important it was to get these amendments right so we can protect national security while ensuring that we are not chilling useful, good investment.

Canada's foreign investment regime must adapt to the speed of innovation, which we know moves very quickly these days. In recent years, intangible assets in the knowledge economy, like intellectual property and data, have grown in importance in defining Canada's economic strengths and, at the same time, pose new challenges in terms of how these are to be managed in order to ensure that the benefits occur to Canada and Canadians. The government recognizes the value of the intangible economy, its growth and the relevant opportunities for all Canadians, particularly in artificial intelligence and intellectual property. These new innovations are driving new ways of doing business, with huge opportunities for Canadians. The government will support this growth as it helps drive Canada's economy and supports highly skilled, good-paying jobs.

It is great to see the city of Montreal become a cluster for artificial intelligence, with a number of companies investing in that city. It is great to see the Kitchener-Waterloo corridor here in Ontario continue to be the leader in the tech sector. It is great to see the city of Toronto continue to see the investments from domestic and foreign firms in fintech, and so many other types of businesses in this knowledge economy, but to do so—

[Dan Vandal, Liberal, Saint Boniface—Saint Vital, MB]

moved that Bill C-34, an act to amend the Investment Canada Act, be read the third time and passed.

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

Thank you, Mr. Chair, for indulging me as an associate member of this committee.

My normal role, besides sitting with Mr. Hanley on fisheries, is as vice-chair of the industry committee. I've had a motion for a study on Medicago on the industry committee since the spring, but legislation takes precedence. We were dealing with Bill C-34 on the Investment Canada Act changes and Bill C-27, the privacy and artificial intelligence bill, so we've not had a chance to get to the motion.

That is why I think the motion here before the committee is so important. The industry committee did an examination, initially—it was tabled in June, since it was started in the last Parliament—of the response to COVID-19 in terms of vaccines, as, I believe, this committee did. I believe there are not only minister of health issues with regard to this study but also a large industry role. Unfortunately, the industry committee doesn't have time to discuss it.

You will note, in the appendix of the report tabled in the House on June 14 by the industry committee, that an agreement with Medicago was signed on October 23, 2020, to purchase up to 76 million doses of the vaccine. This is a vaccine Health Canada had approved and to which the government initially committed. It was up to $223 million through a couple of funds, in order to develop a non-mRNA vaccine, a plant-based vaccine, which they successfully did. I think it got Health Canada approval.

The committee needs to study it for various reasons. It's not clear to us why not a single vaccine was produced, and why that contract was signed for 76 million. A great deal of provincial and federal government money went into creating that vaccine plant in Quebec City 10 years or so ago, in order to produce vaccines. My understanding, from everything I've seen, read and heard, is that, in this case, it was a successful vaccine with a fairly high efficacy rate.

This investment was made and seems to have not gone anywhere, mainly because the World Health Organization has a policy not to endorse products produced by companies that have any kind of tobacco manufacturing involvement. I think Philip Morris had 40% ownership, with Mitsubishi having the remainder. I'd love to ask both the health minister and the industry minister this: Why would you sign such a contract or even invest up to $223 million of taxpayer money to develop a vaccine with a company that you knew the WHO would not endorse for promotion around the world? This would leave it, essentially, a Canadian domestic market vaccine. I think there are a lot of questions to ask around that and the thinking leading up to it.

We know the thinking was about trying to develop, as MP Thériault said, domestic vaccine manufacturing capacity. A lot of money was going into it, at a very intense time in the world and in this country. In choosing to make it with this particular company, it looked to me like it was doomed to failure regarding its ability to, even if successful, be a vaccine acquired by other countries. That would ultimately be the goal in addition to our own use. Without a WHO “good housekeeping” seal of approval, it was unlikely to have any success in its sales.

In business, we call it a “sunk cost”; once it's done, you can't get it back. In this case, the sunk cost is in, so let's buy some of the vaccines and contract with it.

An incredible amount of taxpayer money went into this. Where are the patents? Who owns the patents? Where have they gone?

The inability of this organization, for whatever reason, to produce the vaccines in this plant that was set up, where 400 people worked, looked like it had a ray of light in December last year, when Mitsubishi bought out Philip Morris.

When that happened, I thought, okay, this is good news. Maybe this great taxpayer-funded vaccine can be produced and marketed around the world, now that it no longer has a tobacco company ownership structure. There are rumours out there of what Mitsubishi paid for that. Some have said it's as low as about $14 million, which is incredible, given that it had almost $200 million of federal taxpayer money with patents on a successful vaccine.

Nonetheless, we all lead a public, elected life. We're all optimists by nature, or we wouldn't be doing this job. I think we held out hope that somehow, it would be seen as a step forward.

Lo and behold, what happened six weeks later? Six weeks later, Mitsubishi shut the company down, threw 400 people in Quebec out of work—after all of that taxpayer money—and then started this dance of the questions that we started to ask.

What's happened? There's a contract to produce up to 76 million vaccines. I believe the cost was $20 per vaccine, so what are we on the hook for as a country, to pay for a vaccine that was never produced? Where did all that investment in that IP go?

I suspect we don't know the answers to that or whether or not Mitsubishi has chosen to actually sell the Canadian-financed patents for a plant-based COVID vaccine somewhere in the world. We don't know that. We haven't had it before this committee and we haven't had it before the industry committee. This committee has the opportunity, perhaps, with its agenda to do that, which we don't in the industry committee. I would be urging members to take a look at that, because it seems to me there are at least two flaws in this process.

The first flaw is that there wasn't any protection of Canadian taxpayers when $200 million was committed in a contract to develop the vaccine in the first place. There were no issues around the taxpayers' claim on the patents if something went south.

Somehow, as the financier of this, either through university-owned patents or through the rights of the granting councils through the SIF program—or whichever ISED program paid for this, because I believe the money came out of ISED—we were obviously so poor at negotiating contracts that we didn't get an ownership stake in that or any protection for the taxpayer if, for example.... They must have known going in that it would have had trouble being marketed because of the Philip Morris ownership. There wasn't some protection for the taxpayer from that company in the contract to give us the money back from Philip Morris and Mitsubishi for the investment or, in the case of the situation that arose, the fact that the taxpayer would actually own the patents so that they couldn't leave this country and couldn't be sold by a foreign multinational. However, it appears that's the situation we're in.

If that wasn't bad enough, obviously, the cancellation clauses were non-existent in the contract to buy the 76 million doses of the vaccine that were never produced, because we are now on the hook for another $150 million for something that was never made. It's thin air, it's vapour, it's nothing. It's $150 million for not even an empty vial.

There was $200 million that went into developing the vaccine and $150 million for absolutely nothing. Some 400 people in Quebec City are out of work, and Mitsubishi gets to walk away with all of the patents and all of the potential to sell them for the small price of a few million dollars buying out Philip Morris.

That's the way it appears. Maybe that's not the case. Maybe the witnesses could actually shed some light on these contracts. Maybe officials could explain to us why they signed contracts that appear to leave the Canadian taxpayer with nothing but the bill and leave a Japanese company with an innovative Canadian patented technology.

Again, because we don't have the ability to do this in Industry, we would like to get this committee to examine these things. That's why Dr. Ellis put forward the motion in the first place. I would urge that our committee members not only vote on the amendment as amended. I think that we need not limit ourselves to four meetings or six meetings. I think you have to follow the evidence and then get to the main motion so that the committee gets this on the agenda.

That's my opening. I'll leave it at that for members to consider. The numbers add up to quite a large loss to the Canadian taxpayer. To me, it's a bit of a scandal. I hope it's not. I hope we can actually get those patents back.

Thank you, Mr. Chair.

Oral Questions

[John Nater, Conservative, Perth—Wellington, ON]

Mr. Speaker, I am rising on a different point of order.

I am being a bit of a stickler today. I would not normally point this out on behalf of my own colleagues, but during the recent votes, a colleague walked out before the vote announcement, therefore negating his vote. This was done on purpose because the member was to be paired with a minister and was not supposed to vote. Therefore, I would ask that the vote of the member for Portneuf—Jacques-Cartier not count for Motions Nos. 1 and 2 in Group No. 1 at the report stage of Bill C-34.

National Security Review of Investments Modernization Act

[The Speaker, Liberal, Greg Fergus]

It being 3:30 p.m., pursuant to order made on Monday, November 6, the House will now proceed to the taking of the deferred recorded divisions on the motion at report stage of Bill C-34.

Call in the members.

And the bells having rung:

The House resumed from November 6 consideration of Bill C-34, An Act to amend the Investment Canada Act, as reported (with amendments) from the committee, and of the motions in Group No. 1.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, it is my pleasure to rise and close off debate today on Bill C-34, the amendments to the Investment Canada Act.

I just want to say that, earlier today, I was very disappointed that, when we had our vote on the carbon tax, on taking it off constituents in my riding who have to pay the carbon tax on home heating, as we were asking for the same type of consideration for Manitoba as was given by the Liberal government to those in Atlantic Canada, the government would not extend those considerations to people across the Prairies.

After eight long years of this government, Canadians from coast to coast to coast have had enough of this Prime Minister and his punitive carbon tax that continues to penalize Canadians, especially those low-income Canadians who are seeing everything up go in value. The cost of inflation is eating away at their paycheques. Their buying power in the grocery store, as well as in the housing market, continues to erode.

I do have some concerns with Bill C-34, which I had hoped would have been addressed through amendments that were brought forward by the Conservatives.

I just have to thank my colleague, the shadow minister of investment and industry, for the work that he has done on Bill C-34 in trying to strengthen it and make it better. It has been 14 long years since this bill was updated, eight of them under this Liberal government.

I think all of us have concerns that the government has not taken issues around foreign investment and how it impacts things like national security very seriously. We know that it has not protected our critical infrastructure, which is at risk here if it falls under the control of foreign entities, especially those that are owned and controlled by their states.

What we witnessed, right across this country, is that critical minerals continue to get bought by foreign entities and that those state-controlled operations, first and foremost, are beholden to the despots and dictators who control their countries, rather than produce those critical minerals for our supply chains here.

Speaking of supply chains, this foreign investment act fails to address our economic sovereignty and how that relates to our overall national defence.

If one looks at making sure that supply chains are protected, although Canada is a smaller economy compared to our allies, we still need to make sure that we are getting critical supplies to build everything within our—

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Madam Speaker, Bill C‑34 will increase oversight and improve our international reputation. I wonder how much that might help us with our main financial partner, the United States, if we pass Bill C‑34 in its current form.

What does my colleague think of that?

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, this is a great opportunity to talk about foreign direct investment in Canada, why it is important and why this legislation is before us.

Our viewers might ask why foreign investment is so important to Canada. There are many reasons that we should be looking to attract foreign investment into our country. Foreign investment provides Canada with the capital it needs to develop its full potential and, yes, that includes our abundant natural resources, such as oil and gas. Foreign investment in Canada is also a source of innovation, allowing Canada to benefit from evolving technologies. As one of the most educated countries in the world, we also use that foreign investment in innovation to build our own technological capacity.

Intellectual property will drive our future prosperity. We had better ensure that this advantage is not squandered by failing to properly review foreign investments.

It goes without saying that foreign investment creates many jobs across our country. Invariably, when a foreign investor makes its investment in Canada, this creates new job opportunities for Canadians. Related to that is the fact that jobs created by foreign investment generate higher wages. At a time when the worst affordability crisis of a generation is raging, when many families are struggling to make ends meet and pay for groceries, schooling, gas and rent, it is important that the jobs that Canadians have available to them also have decent paycheques attached. Foreign direct investment also drives increased productivity, leading to greater prosperity for our country. When foreign investors commit to building our economy, they also increase our tax base, which of course allows governments at all levels to deliver the services that Canadians expect.

Unfortunately, for quite a number of years now, especially since the current Liberal government came to power, Canada's foreign direct investment performance has lagged far behind that of many of its OECD competitors. What I mean by this is that there is more investment flowing out of Canada and being invested in foreign jurisdictions than there is foreign investment flowing into Canada. We actually have a very significant deficit. Why has this happened?

There are many reasons. I will not go into them all, but I will begin with this: Canada is suffering from regulatory gridlock. In other words, regulatory and approval processes at all levels of government are so complex and reflect such an overreach that nobody wants to invest in Canada anymore. We have labour force challenges, heightened uncertainty, deteriorating public finances and increasingly unmanageable debt loads.

By the way, our system is not tax competitive. For years, we have been talking about tax reform, yet over the last eight years, no reform has materialized under the current Liberal government. As a result, it has become too expensive to do business in Canada.

Most recently, the Liberal government decided that not only would it maintain a punishing carbon tax on everything, but it would also quadruple the carbon tax on the necessities of life, the things that Canadians need to survive, such as home heating, natural gas and groceries. Prices have skyrocketed as the Prime Minister ratchets up his carbon tax. Putting gas in the car is becoming prohibitively expensive for many families. He plans to quadruple the carbon tax on fuel for our cars as well.

To make matters worse, while the Prime Minister recently announced that he would temporarily suspend the carbon tax on home heating oil for 3% of Canadians, the remaining 97% of Canadians will receive absolutely no break from the carbon tax on their own home heating costs. I thought he once said, “A Canadian is a Canadian is a Canadian”. It is another vacuous promise from a failed Prime Minister who seeks to divide Canadians and pit them against one another.

The bottom line is this: The world no longer sees Canada as a great place to invest. It is the government's policies, grounded in an ideology that disregards the importance of making Canada a welcome place for foreigners to invest, that is the basis of these problems. We have to get foreign direct investment into Canada right, because it can raise our standard of living and give Canadians, especially young Canadians, the hope that they can live out the Canadian dream.

However, not all investments are necessarily in Canada's best interests. There are benevolent investments that benefit Canada's economy, and then there are investments that are being made by malevolent actors around the world who simply want to take advantage of Canada. As we consider which investments fall into each of these two categories, it is absolutely critical that we make the determination that we are going to focus on Canada's net benefit, on defending our sovereignty and protecting our national security. That is why we are discussing this legislation today.

Bill C-34 simply attempts to update the Investment Canada Act, an act that is quite a number of years old now, but it has not kept up with the changing conditions on the ground, in a rapidly evolving global environment. I would mention that, after eight years, the government has been unable to put in place the kinds of policies and regulations that would actually protect Canadians against their key industries and companies being bought out.

I will give an example. Hytera and its associated company Sinclair Technologies have been charged with 21 counts of espionage in the United States. In fact, President Biden has banned the company from doing business in the U.S. However, in 2017, the Liberal industry minister, Navdeep Bains, refused to conduct a full national security review on the sale of a B.C.-based telecoms company, Norsat International to China-based Hytera, which is banned from doing business in the United States. It was here in Canada buying up one of our companies.

The RCMP awarded a contract to Hytera to supply sensitive hardware for its communications systems. The Canada Border Services Agency has also been using communications technology from Hytera. Members may recall that a few years ago, the industry minister set up some rules about making sure that key Canadian companies, especially within the critical minerals space, would not be bought up by foreign hostile actors, yet that is exactly what happened.

In 2022, the Liberal government fast-tracked the takeover of Canadian lithium mining company Neo Lithium by Chinese state-owned Zijin Mining without a national security review. Every single citizen in China, every single company, whether a state-owned enterprise or otherwise, has a responsibility to report to the government any information it asks for with respect to the business that they carry on.

We want to make sure that this bill does what it is supposed to do. Briefly, this bill would streamline the minister's ability to investigate national security reviews of these foreign investments. It would strengthen penalties for failure to comply with the Investment Canada Act's review provisions. It would create a new power to generate a list of sensitive industries. It would improve coordination with our international partners. It would also vest power to the minister, rather than allowing cabinet to make these kinds of decisions in the first instance.

Would it not be better, instead of having two eyes on this kind of transaction, to have all the eyes of cabinet focusing on whether an investment is in Canada's net benefit or whether it represents a risk to our national security? The bottom line is we tried to get some amendments. To their credit, some members of the committee agreed with us and we actually got four critical amendments passed. However, there were seven other amendments we tried to make, some of which were contained in a unanimous report from the industry committee, and guess what? The Liberals on the committee voted them down.

We can do better, but this is a start.

[Rachael Thomas, Conservative, Lethbridge, AB]

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

Ultimately, at the very heart of this debate is the prosperity of Canadians and their well-being. For Canadians to prosper, the government of the day needs to do three things. It needs to grant freedom to the people: freedom to dream, freedom to take risks and freedom to earn a living. The government of the day needs to facilitate an environment of economic prosperity where folks can dream, take a risk and invest, where red tape is cut and where taxes are decreased so that people can flourish. The government of the day also needs to prioritize the safety and security of Canadians. Without our borders being secure and without the safety of Canadians being front of mind by the government, it is rather difficult to pursue these other things.

That said, we also know that the government needs to get out of the way as much as possible. When looking at this legislation and the amendments made to the Investment Canada Act, one must ask this question: Where does the balance lie between government engagement or involvement and none?

Here in Canada we have incredibly industrious and talented people. We have people who combine their talents with the bounty of the land to prosper, and they make amazing things possible. I think of the farmer who works his land and brings it to harvest. I think of the fisherman who works on dangerous high seas. I think of the miner who works miles underground. I think of the business owner who brings her passion to life through innovation and hard work to create jobs for others and, of course, to earn a living herself.

Because of the greatness of the people who call Canada home, I believe we can participate in a broader global economy as well. That is where the bill comes in. This broader global economy presents amazing opportunities for Canadian businesses and allows us to spur innovation. Our quality of life grows when the Canadian economy can offer so much to the world and to each Canadian. The world in turn, of course, invests in Canada. Our economy then grows even more and Canadians are empowered to live fulfilling lives to an even greater extent.

While the global economy generates many opportunities, it also invites threats, which is again where Bill C-34 comes into play. It is why it is so very important that we as Canadians are vigilant in making sure that the investments we are attracting into our country are ones that we indeed want to attract, ones that are good for Canada. It means that a robust review process is absolutely necessary to ensure this is the case. A thorough and robust review process, I would argue, is an absolute must.

The globe is not made up entirely of governments that desire peace and goodwill for all people. We know that, perhaps more now than many years ago. We know that some states pose a threat to the very way of life we enjoy here in Canada. They do not desire the prosperity of Canada, nor do they approach our market in good faith. In fact, they have other objectives in mind. These countries are not our friends. That is why it so very important that we get legislation like this right.

It is the duty of the government to ensure that Canadians are kept safe and secure, that good decisions are made and that the right investments are drawn into the borders of our land. Certain countries operate with covert agendas and work to undermine the security of our nation and the prosperity of its people. This often happens through the vectors of our international trade and the acquisition of Canadian assets. This is why, again, it is so important for security reviews to be done in a thorough and timely manner. I will use some examples to highlight what I mean.

In 2017, the Minister of Industry failed to request a full national security review of the acquisition of the B.C.-based telecommunications company Norsat International and its subsidiary Sinclair Technologies. The Chinese company Hytera Communications wanted to acquire them. We know that Hytera Communications is partially owned by the People's Republic of China. A careful review should have been done but was not.

Fast-forward then to December 2022, and the RCMP actually awarded a contract for sensitive communications system equipment to this technologies firm. Again, I will remind the House that it is partially owned by Beijing.

This company then, in January, only a month after the contract was awarded to them, was charged with 21 counts of espionage in the United States, and then banned from doing business in the U.S. by President Biden.

This company is one that was given access to all RCMP communications services. Of course, we could imagine what that does to our overall safety and security as a nation and to the confidence that Canadians can place in the RCMP.

Here is another example. In 2020, even more insultingly, the Department of Foreign Affairs actually awarded a contract to a Chinese-based company called Nuctech, founded by the son of a former general secretary of the Chinese Communist Party. They were contracted to supply X-ray equipment to 170 Canadian embassies and consulates. One can quickly imagine what the impact of such a decision would be, in terms of the types of intelligence that could be gathered through doing X-rays, especially in a place like an embassy or a consulate.

It would seem that in some ways it is almost on brand for the Liberal government to turn a blind eye to these important decision-making processes and just allow things to flow the way that they will, which is actually putting Canadians in jeopardy then. This is where responsibility needs to be exercised, and I would even dare say just some basic common sense. We have to take precautions in order to safeguard the people of this country and our economic prosperity as a nation.

Speaking of economic prosperity, what could be more prosperous than people earning a living for themselves and being able to take that money and invest it where it needs to go. What could be more important than government getting out of the way and allowing those Canadians to spend their money as they need to, in order to make ends meet.

In fact, right now, Canadians are actually finding it more difficult than ever before to do that. In large part, that is because of a carbon tax that is applied to everything from home heating to food to the fuel that we put in our vehicles. The Liberal government coming under immense pressure from the Canadian public, knowing that they were having a difficult time being able to afford life, made the decision that it would take the carbon tax off a small portion of people in Canada for a short time. It would hit the pause button and scrap the carbon tax for three years for those who live in Atlantic Canada and use oil heating. However, those who are in my province of Alberta who use natural gas are out of luck. They still have to pay the carbon tax.

We thought we would give the hon. members across from us the opportunity to make this fair for all Canadians, because, of course, choosing a favourite 3% is not fair and it is no way to govern a nation properly. The Conservative Party put forward a motion, and that motion was voted on today. It was a motion that invited all members in this place to vote to scrap the carbon tax for all Canadians, to make it fair from coast to coast to coast, which is what any government should want to do. It should be concerned about the unity of this great country and the economic prosperity of its people.

This place was given an opportunity to vote in favour, with the Conservatives, and to bring that motion into play, which would have saved Canadians thousands of dollars. Instead, the members across the way decided to vote that motion down. They voted to make life more expensive and less affordable for Canadians. They decided that they wanted the carbon tax to be applied to 97% of Canadians, but taken away from 3%. The government across the way determined that its polls were down in Atlantic Canada, and so it needed to show favour to that 3% but the rest could be punished. It is sad.

Parliament, this place, those who sit here were given an opportunity to be on the side of the everyday Canadian person. Instead, Liberals chose to play politics.

The bill that is before us today is yet another opportunity to be on the side of the Canadian people and to make sure that their safety, security and well-being is put first and foremost, which means that more than 10 amendments that were brought forward by Conservative members at committee should have been accepted in order to strengthen this legislation and make it better for all.

Unfortunately, again, the government of the day actually shot those amendments down. While the bill that we debate today makes some minor improvements, and I cannot fault the government for that, I do fault the government for not going all the way and making this bill even stronger. That is very sad. There could have been multipartisan co-operation to strengthen this bill. Again, the government of the day—

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

Madam Speaker, I am very pleased to rise to speak to this bill for the second time. Last February, I gave a speech on Bill C-34, an act to amend the Investment Canada Act. At the time, I talked about the many problems with this legislation and our intention to improve it in committee. I will come back later to the amendments we proposed. Some of them were adopted, while others were, unfortunately, rejected. I will start by talking about the genesis of this bill.

In the December 2021 mandate letter given to him by the Prime Minister, the Minister of Innovation, Science and Industry was asked to do the following, and I quote:

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 economic security threats from foreign investment.

I have to say that that was a legitimate request. Recently, there have been far too many cases where Canada's national security was potentially compromised because of the acquisition of Canadian businesses by foreign interests that are a bit too close to the central power. An update was more than welcome.

I sit on the Standing Committee on Industry and Technology. I would like to commend my Conservative Party colleagues, who are doing admirable work on the committee. I see it every week. Over the past two years, we have looked into several of this government's missteps regarding transactions and contracts that could compromise our national security.

One of the most recent examples is from 2017, when the Minister of Industry failed to request a full national security review of the acquisition of telecommunications company Norsat International and its subsidiary Sinclair Technologies by the Chinese company Hytera Communications, which is partly owned by the People's Republic of China. This is just one of many examples.

After eight years of this government, too many foreign state-owned enterprises have acquired Canadian companies, intellectual property, intangible assets and citizens' data. Rather than taking the situation seriously, the minister is giving himself more powers with this bill and not making up for the negligence that allowed the contracting incidents involving Zijin Mining, Hytera and the RCMP to happen.

A few weeks ago, during study of the bill in committee, security experts were invited to highlight the acquisitions that were not subject to a national security or net benefit review, even though the threshold under the Canada Investment Act had been met. Other witnesses pointed out the evolution of the dynamic of the Chinese private sector economy and the fact that many Chinese businesses operating on an international level are now beholden to the demands made by the Chinese Communist Party, even though they are not directly controlled by the state.

Charles Burton argued in favour of a stricter review framework for state-owned enterprises entering into Canada, including those belonging to the private sector who have their head offices in authoritarian countries like China. We proposed an amendment to that effect. We asked that the definition of state-owned enterprise be reviewed to include private enterprises that have their offices or their head offices in an authoritarian country. Unfortunately, that amendment was rejected. The definition of state-owned enterprise therefore remains too vague in our opinion.

Another point raised by witnesses was the need for greater clarity on which sectors should be considered strategic in order to ensure a more consistent review process. Professor Patrick Leblond argued that establishing a list of specific sectors necessary to ensure national security would prevent the review system from becoming entirely politicized. Knowing what we do about this government, more safeguards are needed.

To sum up what we studied in committee and what the witnesses told us, it is safe to say that this is too little, too late. There are too many flaws in this bill. It appears that this government is not taking sensitive transactions seriously and is not doing the necessary due diligence, putting the security of our government and our citizens at risk.

The most significant change this bill makes is the power that the minister is giving himself. I think this is unacceptable, which is why we introduced the amendment we are discussing today. Under the current act, the minister must submit to cabinet his intention to conduct a security review when a foreign interest acquires a Canadian company. Cabinet must give its approval.

In the bill before us, the minister gives himself the power to decide whether to conduct a security review with the consent of the Minister of Public Safety, but without cabinet approval. Only two ministers would be responsible for decisions with potentially very serious repercussions. Imagine two Ontario ministers deciding the future of a Quebec company without any other Quebec cabinet minister having a say in the matter. I hope that my Bloc Québécois colleagues are listening to me carefully and that they will vote in favour of our amendment. We know that this Liberal cabinet has made some very bad decisions, but this is a safeguard that needs to stay in place.

Here are a few more examples of the changes we were able to make to this bill, which was overly flawed. We secured a reduced threshold to trigger a national security review for all state-owned enterprises. It went from $512 million to zero dollars in asset value for companies not listed as trade agreement investors. This ensures that all investments made by state-owned enterprises will be reviewable. We also implemented a requirement that an automatic national security review be conducted whenever a company has previously been convicted of corruption charges.

We managed to add another factor to ensure that the elements reviewed as part of the national security review process include asset acquisitions by state-owned enterprises, not only new business locations, share purchases and acquisitions.

Finally, we implemented a requirement for the minister to conduct a national security review each time the investment review threshold is reached. Simply put, this amendment requires that the minister review any investments or acquisitions made in Canada that exceed $1.9 billion in enterprise value instead of it being an option.

The amendments that we proposed sought to create a more robust review process. We could have made even more improvements to this bill, but unfortunately at least seven of our amendments were rejected.

We are talking about national security here. This government did not take some of our issues and concerns seriously, and that is extremely important. For example, we sought to authorize the government to go back and redo a security review for Canadian businesses acquired by state-owned companies to allow for a more flexible process. The Liberals rejected our proposals.

As I said earlier, this government's desire to address the matter of national security is too little too late. The dynamic between nations is changing, and the future is uncertain. The Government of Canada must be more vigilant than ever. On this side of the House, we have always taken the matter of national security seriously, and Canadians can count on us to ensure that it will be a top priority in the future.

I want to once again add that I sincerely thank my colleagues on the Standing Committee on Industry and Technology, because they have a very good reputation and do outstanding work to ensure our country's national security.

[Marty Morantz, Conservative, Charleswood—St. James—Assiniboia—Headingley, MB]

Madam Speaker, I am honoured to rise today to speak on Bill C-34.

Before I do, I would be remiss if I did not talk about the calamitous vote the Liberal members of this House took earlier today by excluding all Canadians from being treated fairly by pausing the carbon tax for Canadians all over the country. I come from Winnipeg, one of the coldest cities on the planet. Today, Liberal members from Winnipeg said no to Winnipeggers, while their Atlantic Canadian counterparts seem to be more effective than they are. They have the ear of the Prime Minister who I suppose was trying to save himself from his terrible polling results with this desperate measure by the government. However, at the end of the day the Liberals chose not to pause the carbon tax pain, which is really unfortunate for all Canadians.

As far as Bill C-34 is concerned, I want to say this. After eight years of the Prime Minister, numerous foreign state-owned enterprises have acquired interests and control in many Canadian companies, intellectual property, intangible assets and the data of our citizens. The government is doing too little, too late to protect our national economic and security interests with this bill.

Since the Liberals came to power, business investment per employee in Canada has dropped 20%. At the same time, business investment per employee in the United States has increased 14%. Per capita growth is at the lowest level since the Great Depression some 90 years ago and Canada has the most at-risk mortgage default portfolio in the G7. According to the National Bank of Canada, for the first time ever, business investment is now lower in this country than housing investment. When we think about all the manufacturing, oil production and everything else, investment in those things is lower than it is in housing.

The goal of the Investment Canada Act is to deal with foreign investors controlling Canadian industry, trade and commerce. Foreign direct investment creates opportunities, stimulates economic development and introduces new ideas and innovation to Canada. For Canadians, this means more high-quality jobs and a stronger, more sustainable economy.

Billions of dollars of Canadian natural resources, ideas, IP and land are being controlled by foreign entities. Huawei, a state-owned enterprise that feeds intelligence directly to China, was still working with many Canadian universities as of this past summer.

Another example would be taxpayer-funded dollars at Dalhousie University that are funding Tesla intellectual property and research and that IP is all going back to California.

In 2017, the Liberal government allowed a telecom company from British Columbia called Norsat to be acquired by a company called Hytera, which is a Chinese-based state-owned company. Conservatives demanded at that time a full national security review. The Liberal minister of the day refused to do one and approved the acquisition.

This sort of lax attitude toward issues of national security is clearly a problem. After eight years of the Prime Minister, numerous foreign state-owned enterprises have acquired interests and control in many Canadian companies, intellectual property, intangible assets and the data of our citizens.

The future of Canada needs to be protected in the airwaves, AI and quantum computing. It needs to be protected in our farms, food-processing plants, oceans and fisheries, as well as in developing Canadian LNG, which the world so desperately wants. The government is doing too little to protect our national economic and security interests with this bill. Canadians know the Liberals do not take sensitive transactions seriously and have failed to fully review transactions involving Chinese state-owned enterprises, putting the security of Canadians and the government at risk.

The minister is the minister of broken bills, which is why Conservatives are having to make more amendments to this piece of legislation. On his other bill, Bill C-27, the digital charter implementation act, after a year and a half he was forced to make amendments.

The Liberals missed the chance to think big and understand what is going on in the Canadian economy. This bill does not go far enough to address the risks faced by Canadians. That is why Conservatives worked to pass four significant amendments to ensure a rigorous review process—