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 listened to the speech given by my Liberal colleague. He said that it was important to give the minister more powers to review foreign investments. I concur. More powers and further review are necessary, but I wonder what the government is doing with this power once acquired.

I clearly remember a case, in 2016, because it happened in my riding. Rona, a very important Quebec-based chain, was sold for $3.2 billon. We filed an access to information request to determine the rationale for the government's review under the Investment Canada Act. There were no documents, no studies, nothing.

Can the member opposite explain why the government, which wants new powers, is not using the powers it has and is not fulfilling its role when it reviews potential investments?

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, again, if we start off by assuming that the minister is looking for more powers, only to be extremely critical as to how those were used previously, we might not be starting off on the right foot, if we are genuinely interested in amending this legislation in the better interest of Canadians.

Similar to my comment to the Conservative member who asked me a question, I would say to the member from the Bloc that if he is concerned about what exactly the minister will be able to accomplish with these legislative changes, then he should bring that up in committee so it can be discussed. At the end of the day, let us remember that we will all be better off by having a better ability to negotiate and a better ability to scrutinize the various corporations, stakeholders and entities that are seeking to invest in Canada, if we work together to create the best legislation.

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.

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

Madam Speaker, I wonder if my colleague can provide his thoughts in regard to the announcement with respect to the battery plant in the Kingston area.

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

Madam Speaker, first I just want to take the opportunity to welcome Duncan Venditti to Parliament Hill today. Duncan is a grade 6 student from Our Lady of Lourdes school in Kingston. There is no doubt, mark my words, that he will one day be sitting in the House. I am sure he will be on this side of the aisle, but the good news for my Conservative colleagues is that I am sure they will get along much better with Duncan than they do with me.

In terms of the battery manufacturing plant, this is a great example of how this piece of legislation would lend itself to the minister's being able to establish and bring new relationships to Canada, just like he has done by bringing to Canada the Umicore project, which will set up the largest electric-vehicle battery manufacturing plant in North America right outside of my riding in Hastings—Lennox and Addington.

[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 Assistant Deputy Speaker, Carol Hughes]

On a point of order, the hon. member for South Shore—St. Margarets.

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

Madam Speaker, this bill is about foreign direct investment in Canada. It is not about providing subsidies to foreign companies to operate battery plants. I would ask the member if she would—

[The Assistant Deputy Speaker, Carol Hughes]

I would remind the hon. member that there is some latitude during speeches. I am sure that the hon. member will come back to the original bill that is before the House.

The hon. member for Davenport.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, I was highlighting some of the great investments we have already made, which are innovative and very much set Canada and Canadians up for success.

At the end of January, the Minister of Innovation, Science and Industry announced an investment of $100 million through the strategic innovation fund to support Saskatchewan's BHP's $7.5-billion project to develop its world-leading, low-emissions potash fund. To me, this innovation is one of the many investments we are making that are going to help make sure we will be reaching our net-zero targets by 2050.

In mid-January, our Minister of Innovation, Science and Industry announced the launch of Canada's national quantum strategy, which will shape the future of quantum technologies in Canada and help create thousands of jobs. It is an investment of $360 million, and the strategy will amplify Canada's existing quantum research and grow quantum technologies, companies and talent.

Here are another couple of other things I am really proud that we have done.

Our Minister of Innovation has also signed MOUs with Volkswagen to investigate opportunities for Canada to contribute to Volkswagen's global and regional battery supply chains, which will be of mutual benefit to both of our countries and will advance our respective EV and energy agendas. Another great MOU I want to point out is the one we signed with Mercedes-Benz to look at opportunities to promote co-operation and to explore ways to advance opportunities across Canada's electric vehicle supply chain, including, but not limited to, securing sustainable sources of raw materials moving forward.

I will mention one more thing I am very proud of.

In 2019, we set up the innovation asset collective, which is a $30-million pilot that very much helps Canadian clean-tech companies harness the power of IP to maximize the value of their intangible assets and set the stage—

[The Assistant Deputy Speaker, Carol Hughes]

On a point of order, the hon. member for Calgary Rocky Ridge.

[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.

[The Assistant Deputy Speaker, Carol Hughes]

Again, there is a bit of latitude, but the hon. member is correct. I would remind those who are giving speeches today and speaking on this that they should be referencing the bill and maybe mentioning the bill during their allocations.

The hon. member for Davenport has 30 seconds to continue.

[Julie Dzerowicz, Liberal, Davenport, ON]

Madam Speaker, I thought I had a minute left, but I just want to say to everyone who stood on a point of order that I very much outlined exactly what the bill is meant to do, why it is important to be part of the Investment Canada Act and why it is so important for both current and future economic success for Canada.

As we create a culture around intellectual property, as we work to translate inventions and innovation, as we work to educate and protect IP generated from R and D investment, and as we continue to encourage and need foreign investment and trade in Canada, it is important to modernize our Investment Canada Act for the good of our economy, for jobs, for current and future prosperity and to protect our national security interests.

I am thankful for the opportunity to speak—

[The Assistant Deputy Speaker, Carol Hughes]

The hon. member for South Shore—St. Margarets.