Bill C-34 (Historical)

National Security Review of Investments Modernization Act

An Act to amend the Investment Canada Act

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

National Security Review of Investments Modernization Act

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

Mr. Speaker, I apologize for this lack of decorum when it comes to properly naming the riding. If there is one thing I dislike in federal politics, it is that riding names are so long. In provincial politics, it is a maximum of two words, and that suits me just fine.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

I agree.

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

Mr. Speaker, we agree. For once, the member for Winnipeg North, from the Liberal Party, supports me. That is great. Finally. It is never too late to be good.

Let us come back to serious things, because this bill is very serious. As I was saying, it seeks to tighten the rules that govern our international trade with countries that are no longer our friends, countries that have a hidden agenda that is covert, hypocritical, cowardly and, most importantly, dangerous for our national security. That is why I must remind the House that, unfortunately, some very serious incidents, in our view, have occurred in relation to international trade.

In 2017, the Minister of Industry failed to request a full national security review of the acquisition of B.C.-based telecommunications company Norsat International and its subsidiary, Sinclair Technologies, by the Chinese company Hytera Communications, which is owned in part by the People's Republic of China. A careful review should have been done, but it was not. In 2020, even more insultingly, the Department of Foreign Affairs awarded a contract to the Chinese company 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 and consulates.

Foreign Affairs is doing business with a company with a checkered past and close ties to the Chinese government, the communist dictatorship in Beijing, and this equipment is being sent to 170 of our embassies. That makes no sense. How did the government let that happen? Clearly there was a greater need than ever for more rigorous analysis around international transactions.

The other example I am going to share is no better. In December 2022, the RCMP awarded a contract for sensitive communications system equipment to Sinclair Technologies, which used to be a Canadian company but became a wholly owned subsidiary of Norsat International, which was itself acquired by Hytera Communications. Hytera Communications, which is headquartered in Shenzhen, China, is partly owned by the People's Republic of China, and it is a major supplier to the Chinese ministry of public security.

The RCMP is doing business with that company. Something had to be done right away. That is why we welcome the government's intention to take action on this. We did our job conscientiously during clause-by-clause in committee, where we proposed some 10 amendments. Four were adopted, and I want to talk about them.

The first amendment sought to reduce the threshold for triggering a national security review to zero for all public companies with assets worth $512 million among countries not on the list of trade agreement investors. The goal is to ensure that all investments by public companies can be reviewed. I should add that we can keep doing business with countries we have free trade relationships with.

The purpose of the second Conservative amendment adopted by our colleagues was to ensure that an automatic national security review was performed every time a company had been convicted of corruption in the past. That is a very good thing; I do not think we can ever go overboard on ethics.

The purpose of the third amendment was to ensure that the items examined during the national security review process would include acquisitions of assets by public companies and not only by new commercial establishments, share purchases and acquisitions. If by chance a foreign company wants to buy part of one of our domestic companies, that is precisely the kind of case that is reviewable, which is why we allow it. We need to pay very close attention to that.

The fourth Conservative amendment adopted by our colleagues proposes implementing the requirement for the minister to automatically trigger a national security review every time the investment review threshold is met. This amendment requires the minister to review all investments or acquisitions made in Canada by a company with a value of more than $1.9 billion. The national security review is no longer an option or a choice.

Now more than ever, our country is a free trade country. Now more than ever, terrorism is rampant, and some countries have a bad attitude and act in a heinous way. We are obviously thinking of Putin's Russia and what is happening in Ukraine, among other places. What is certain is that our country must be more vigilant than ever when it comes to international transactions. We have to ensure that we maintain trust with our trading partners with whom we have free trade relations, but we still have to be very careful.

Before I sit down, I feel compelled to comment on the Prime Minister's announcement today that he intends to scrap the carbon tax on home heating. I would like to recall one thing: A year ago almost to the day, on October 22, 2022, the House spent an entire day debating this very proposal, which had been moved by the member for Carleton, the Leader of the Opposition. Who voted against the measure that the government adopted today, a year later, a year too late? It was the Liberal Party, with support from the NDP and the Bloc Québécois. Unfortunately, voting for the Bloc Québécois is costly.

Concerning Bill C‑34, we take a positive view and are very pleased that our amendments were adopted.

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

Madam Speaker, periodically, we hear members across the way talk about trade, and they try to glorify the Conservatives. It reminds me of Maurice Richard, the great hockey player, the Rocket. He knew how to get the puck in the net. I would say that the current Deputy Prime Minister is kind of like the Rocket: She gets the puck in the net when it comes to trade agreements. That was a sidetrack as I make reference to trade agreements.

When we talk about international trade and all the agreements that are out there, a message we are sending to the world is that Canada is very much open to the world economy. We want to be engaged in foreign investment.

Today, we are debating an important piece of legislation because it would modernize it, after 14 years of no real changes, and would ensure that Canadian interests are best served from economic and security points of view. Would the member not agree that the principles of that legislation would be good for business?

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

Madam Speaker, obviously we do agree to have more trade agreements with other countries. I am very proud of what we did when we were in office under the strong and proud leadership of the Right Hon. Stephen Harper and the wise actions of the member for Abbotsford, who was the international trade minister. He did a tremendous job signing around 40 deals with 40 different countries. Therefore, yes, we do support that.

The reference to the Rocket with respect to the Deputy Prime Minister reminds me of something. I am sure the member is a hockey fan. Maybe he remembers a series in 1986, I think. Does the member remember the guy from the Oilers who shot and scored on his own net? That is what I think of when I see the Deputy Prime Minister.

[Niki Ashton, NDP, Churchill—Keewatinook Aski, MB]

Madam Speaker, I would like to ask a question of my colleague, who defended former prime minister Mr. Harper's legacy on foreign investment.

I am proud to say that I come from Thompson and represent this northern Manitoba town. Unfortunately, this is one of the towns that suffered major losses as a result of the deal to sell the Inco mining company to Vale in 2006. This deal, which was supported by Mr. Harper, resulted in the loss of half our jobs. They were good jobs. It forced dozens of families out of my town and caused a rift with workers in Sudbury.

The member was quick to defend Mr. Harper's foreign investment policy, but we know the cost. Does he have any comments on that?

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

Madam Speaker, I thank my colleague from Manitoba for that reminder and her excellent question.

We are aware of the fact that international agreements have consequences. I would like to point out that, sometimes, countries step in directly to protect things. That can result in a degree of nationalization to protect Canada's greater interest. I clearly remember a time when I was active in provincial affairs. I think I was a journalist back then. I was very surprised when the Conservative government bought a Saskatchewan potash company that was in danger of falling into foreign hands, where the risks would have been a lot greater.

Yes, I am very proud of the Harper government's record, especially in the international relations and international trade arena. I have said it before and I will say it again and again: As Canadians, we have tremendous respect for the member for Abbotsford, the foreign affairs minister who signed more agreements than anyone else in the world, and he deserves it.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I want to congratulate my colleague from Louis‑Saint‑Laurent on his excellent speech. His knowledge of hockey should deter my colleagues across the way from ever taking him on on this particular rink. They would find themselves on thin ice, just like anyone else who would want to challenge him on the subject.

I want to mention something else before I start my speech. We know that several MPs have the joy and good fortune of being able to rely on parliamentary interns who shadow us for two parliamentary periods. I have the honour and pleasure of having Jean-Samuel Houle working by my side as a parliamentary intern. He is the one who helped me research and write this speech that I am delivering today. It is with much gratitude that I thank him for his work and commitment, as well as all parliamentary interns who are working for MPs. Do members know why this is a good program? Interns learn to work with the opposition parties and the government. It is a rather extraordinary school for people who might lead our country one day. I am sure that our future colleagues are among them.

I will now begin the speech prepared for me by Jean-Samuel. For years, the Liberal government has continually failed to address the issue of foreign interference because it does not take it seriously. Our colleague from Wellington—Halton Hills and other members of Parliament have been targeted by the Communist regime in Beijing. Unfortunately, our colleague from Wellington-Halton Hills had to learn about this from The Globe and Mail. That was two years after the Canadian Security Intelligence Service submitted an important management memo to the Department of Public Safety stating that the member was being targeted by a diplomat of the Communist regime, right here in Canada.

The minister responsible for the matter, who was the public safety minister at the time and is now the Minister of National Defence, said in committee that he was never informed in 2021 by the Canadian Security Intelligence Service. However, his testimony was contradicted by that of the director of the Canadian Security Intelligence Service, David Vigneault, who said that he forwarded this information to his office, to the department, to the minister, in a very high-priority memo that came with a very clear stipulation to pass on this information to the minister.

Unfortunately, the minister continued to deny any knowledge of the matter when he appeared in committee this week. He made all kinds of excuses. He said that the special, secure encrypted computer to receive the email was somewhere else in the deputy minister's office, not in his office. They are both on the same floor of the same building, by the way. In short, there were all sorts of reasons not to take responsibility for the actions. Everyone recognized that this was a very serious error in the transmission of information. Even the minister himself recognized that. The problem with this government is that there is never anyone to take ultimate responsibility for these actions. Everyone knows how hard that is for the Liberals.

The Prime Minister must be held responsible for this monumental failure that is jeopardizing our democracy. This was confirmed by the testimony of the former member for Durham, who appeared before the committee today and told the government how it is failing to act when it comes to foreign interference. While the government and the Liberals are asleep at the switch, foreign actors are setting up shop and intimidating us more and more.

We know that Beijing has set up police stations in Canada to monitor Chinese Canadians. There are at least five in Ontario, western Canada and Montreal.

This week, members of the House were notified by Global Affairs Canada that a number of Canadian politicians had fallen victim to another interference campaign designed to silence any criticism of the Communist Party. According to Global Affairs Canada, it is a campaign known as “spamouflage”. I had never heard of it before, but I learned that the word actually does exist. It is a combination of the words “spam” and “camouflage”, and it is spam that is camouflaged so no one can tell where it is coming from. The campaign began in August and targeted dozens of MPs of all political stripes, across several geographic regions in Canada. Victims include the Prime Minister, the leader of the official opposition and several ministers. A number of my colleagues have also been victims of this campaign.

The integrity of our elections and conducting our internal affairs without foreign interference should not be partisan issues. However, it seems that the Liberals have difficulty hearing and acting when our agencies take measures and try to advise them of the importance of what is happening.

It really makes me wonder what the Liberals have been up to. For years, the Conservatives have believed that agents of foreign governments should be registered. On April 13, 2021, Conservative MP Kenny Chiu introduced a bill to create a foreign agent registry. However, an election was called and the registry did not pass.

To make matters worse, it was our colleague Mr. Chiu who was the target of an intense disinformation campaign by the Chinese Communist Party during the election, because he wanted to implement this foreign agent registry. That is totally unacceptable. We need to know who is operating within our borders.

Months ago, the Liberals promised that such a registry was one of their priorities, but they have yet to do anything. The Leader of the Government in the House of Commons has not even included the issue on the list of the government's fall priorities. When will the Liberals take action? With the Liberals and the Prime Minister asleep at the switch and doing nothing about foreign interference, Beijing's influence is taking hold. That is the consequence. The regime sees Canada's lack of reaction as an invitation to go further and do more. This has to stop.

That brings me to the subject of Bill C‑34, which is before us today. After eight years under this Liberal government, Canadian companies continue to be bought up by actors with malicious intent. More and more state-owned companies that are connected to dictatorships like China have acquired interests in flagships of the Canadian economy. They have bought shares directly or even taken control of certain companies. They are particularly interested in Quebec's and Canada's intellectual property in our high-tech sectors but also in people's private information, which is very worrisome. This is an extremely serious situation.

We must admit it is not a problem in and of itself that foreigners want to invest in Canada. In fact, such investments make a major contribution and help grow our economy. However, an important line must be drawn. Some actors do not come to Canada in good faith. When it comes to money from state-owned companies led by dictatorships, that is a problem. When it comes to money from countries that do not respect Canada or our values, that is a problem. Unfortunately, there are still companies that do not respect us at all and that come and buy our businesses, not to help the economy grow, but to become richer and take possession and control of our resources and intellectual property. For years, we have talked about Canada's findings, research and technology being copied. Who was the expert in that? It was the Communist regime in Beijing. Today, not only are they still imitating products that are made all over without respecting property rights, but they also want to directly purchase the intellectual property that they copied in the past. That cannot continue.

In 2017, the Minister of Industry did not require a full national security review prior to the acquisition of telecommunications company Norsat International and its subsidiary Sinclair Technologies by Hytera Communications, a Chinese company. Hytera Communications is partially owned by the People's Republic of China. In December 2022, the RCMP awarded a contract for sensitive communications equipment to Sinclair Technologies, a wholly owned subsidiary of Norsat International, which was acquired by Hytera Communications. The headquarters of Hytera Communications is located in Shenzhen, China. I repeat that the company is partially owned by the People's Republic of China. A company that belongs to the People's Republic of China cannot hide any information from the government if they request it. That is why it is so important to take action.

That is why, with the Conservative amendments, we intend to support Bill C‑34. We were able to improve it, but frankly, it was time to take action and do something.

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

Madam Speaker, as in the past, the government has brought forward very positive legislation. It went to committee. Ministers and committee members with very open minds saw a number of amendments passed through the committee. The government was very supportive of some of the amendments that were proposed. Other amendments were questionable, but at the end of the day, with what we have before us today, we will see a better, more modern act. Hopefully, the government amendments will pass.

That would be in the best interests of all Canadians, given the changes in technology, with AI and the amount of interest around the world, in terms of investing in Canada. This bill is in the best interest of Canadians, both economically and security-wise. Would the member not agree that it is sound legislation and even that it would be nice to see the legislation pass before Christmas?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I am always surprised, astonished, when a government member, an MP, particularly the hon. member for Winnipeg North, asks me whether or not a bill will be introduced and passed by a given date.

The government House leader is responsible for the government's agenda. It is the House leader who is responsible for ensuring that bills are passed according to the government's agenda. If the government House leader cannot get bills through in a timely fashion, perhaps he should ask his leader, not me.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, my colleague is a Quebec MP. I suspect he is sensitive to the interests of Quebec.

Some of the Conservative amendments proposed during the review of Bill C‑34 may have cast suspicion on certain foreign state-owned companies outside the Five Eyes group.

What impact would that have had on the A220 aircraft currently being assembled in Mirabel in partnership with the government of Quebec? What impact would that have had on the fact that 40% of European investments in Canada take place in Quebec? I think it would have hurt.

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I was not at the committee, but what I do know is that these amendments did not target companies and investors from countries with which Canada has a free trade or trade agreement. Saying things like that today is a little like scaremongering because we all know the Conservative amendments were no threat to those investments.

[Blake Desjarlais, NDP, Edmonton Griesbach, AB]

Madam Speaker, I was delighted to hear the member of the Conservative Party speak about the risks that are present to our economy here in Canada should we entertain the asset purchase of Canadian goods and the production of those goods by bad-faith foreign actors. However, I want to remind the member that, in 2012, the Conservative government of the day sold one of Alberta's greatest assets, which was our oil company.

At that time, the Harper government gave the green light for a $15.1-billion takeover from an Alberta-based company stationed in Calgary, which provided many good jobs for our economy and many well-paying jobs right across Canada. However, Harper sold it off to the Chinese national offshore oil company. How can the member explain what he is saying compared with the truth?

[Luc Berthold, Conservative, Mégantic—L'Érable, QC]

Madam Speaker, I love it when a member who was not here at the time of a particular event asks another member who was not here at the time of that particular event to comment on decisions that were made at that time.

The important thing now is to recognize that the Liberal-NDP coalition rejected 10 amendments that would have dramatically improved the bill in committee. However, we did get four of them through, and those amendments will protect Canadians, making this bill more acceptable.

[Simon-Pierre Savard-Tremblay, Bloc, Saint-Hyacinthe—Bagot, QC]

Madam Speaker, I rise in the House today to speak to Bill C‑34 as the Bloc Québécois critic for international trade.

This bill seeks to improve the Canada Investment Act to add certain control mechanisms for foreign investments that might undermine national security. Is Canada, a laggard in so many sectors and industries that have an undeniable strategic value, breaking from its idyllic vision of globalization where humankind would unite in joy at the abolition of states and in the feel-good naivety of laissez-faire? Sadly, we are not there yet.

Let us only consider the lack of aerospace policy or how Ottawa shrugs its shoulders to the softwood lumber crises and the forestry issues. Let us be clear, globalization has not abolished state strategies, powers, empires, nor hegemonies. To believe the contrary is to be vulnerable to those who have completely grasped the reality. That reality is one of conflict and a lasting economic war, corollary of a geopolitical confrontation between major world powers.

The main weapon of this economic war is intelligence, economic espionage and obtaining information through aggressive trade. When we lose a headquarters, it is not just the pride of seeing a leading player leave that is at stake; it is effectively a loss of power.

Although Bill C‑34 does not go far enough, it does make seven worthwhile changes including the following: new filing requirement prior to the implementation of investments in prescribed business sectors; authority for the minister to extend the national security review of investments; stronger penalties for non-compliance; authority for the minister to impose conditions during a national security review; a ministerial power to accept undertakings to mitigate the risk of national security breaches; improved information sharing with international counterparts; and new rules to protect information during a judicial review.

We support the committee's efforts to broaden the notion of sensitive sectors to include intellectual property and databases containing personal information, and to improve Bill C‑34. We are also pleased that the committee rejected the proposed Conservative amendments, which sought to have all foreign Crown corporations considered hostile unless they belong to the Five Eyes. This threatened the interests of Quebec, which accounts for 40% of Canada's European investments. Let us consider, for example, Airbus, a French-German state-owned corporation that manufactures its A220 aircraft in Mirabel, in partnership with the Quebec government. This kind of progress should be commended.

These measures are inspired by the American model—