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

[The Assistant Deputy Speaker, Carol Hughes]

I apologize. The hon. member will have seven minutes the next time this matter is before the House.

The House resumed from October 26 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.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Mr. Speaker, a government that is incapable of destroying non-state coercive actors is as harmful to the cause of freedom as is a coercive state. We live in a time when our friends and our enemies are becoming more clear, our strategic resources and assets are under more threat to be taken over by foreign entities, and at a time when refining our future, growth, potential and lack of industrial policy will threaten Canada's economic future. Safeguarding the resources we have that will also attract good investments has become paramount not only to the success of our country but also to the success of our children.

After eight years of the Liberal-NDP government, numerous foreign state-owned enterprises have acquired interest and control in many Canadian companies, our IP, intangible assets and data. Billions of dollars of Canadian natural resources, ideas, IP, land and farms have left Canada and are being controlled by foreign entities. It reminds me of the story of the The Giving Tree, which I sometimes read to my children. After eight years, the Prime Minister and the industry minister have been like the giving tree, giving of Canada's industry, IP and land. In the story, there is a little boy who comes to a tree and asks for its leaves, and the tree gives him its leaves. Of course, in January 2022, the industry minister failed to follow his own guidelines when he fast-tracked the takeover of a Canadian lithium company, Neo Lithium Corp., by Chinese state-owned Zijin Mining Group without a national security review. Of course, we lost those leaves. It was one of the only companies in Canada that produced lithium, which is critical for producing batteries.

Huawei, a state-owned enterprise that feeds intelligence directly to China, was still working with many Canadian universities as of the summer. This is just like the boy who asked for the trunk of the tree and was given it. The government has also made commitments of billions of dollars to Volkswagen, Stellantis and other battery plants with literally all of the mined material composing the batteries coming from state-owned Chinese companies and not Canadian-owned critical minerals or mines. As we see, these are the branches of the tree, and the industry minister came to Canada with these branch plants. Taxpayer-funded dollars at Dalhousie University are funding Tesla IP and research, and the IP is all going back to California. As members can see, this is the stump of the tree.

As at the end of The Giving Tree story, when the little boy had asked for all of these items: the branches, leaves, trunk and stump, Canadians are left with nothing as all of these companies, foreign-owned and foreign-controlled, have left Canada, and we are left with only the roots. As Canada loses literally billions of dollars, IP and resources, the government and the giving tree of a Prime Minister are literally not worth the cost; these investments go elsewhere, and Canadians do not benefit from the outcomes. The future of our country, Canada, is in protecting our sovereignty, land, farms, natural resources, technological assets in IP while simultaneously attracting foreign investment that benefits Canadians and this country. It is imperative that we demand transparency and accountability from our government regarding foreign ownership and its consequences.

We must advocate policies that strike a balance between attracting international investment and safeguarding our national interests. We need regulations that prevent the unchecked outflow of intellectual property and ensure that our economic landscapes remain robust and sustainable for generations to come. We must be able to produce the stuff in Canada, getting international investment benefiting Canada and Canadians, creating powerful paycheques and GDP right here in this nation. With a new Indo-Pacific strategy aimed at countering a disruptive China, which includes military, domestic security and cybersecurity enhancements, we must ensure that we restrict the involvement of foreign-state-owned firms in some of our most critical sectors, including Canada's critical mineral sectors.

Conservatives looked at Bill C-34 and submitted amendments, including an amendment to reduce the threshold that would trigger a national security review from $512 million to zero dollars for all state-owned enterprises, and I am glad the amendment went through. We ensured that the items reviewable under the national security review process would include acquisitions of any assets by a state-owned enterprise. Finally, we believe that decisions need to be made that would allow cabinet, not one minister alone, to make those important decisions as to what should be reviewed and what should not. No power should reside in one just minister. As famously said by Kanye West:

No one man should have all that power
The clock's ticking, I just count the hours.

The one thing that the Americans and the U.K. do differently with national security reviews is utilize all of their federal departments in the process. The U.S.A. uses CFIUS, an international committee authorized to review certain transactions involving foreign investment. The U.S.A. gives the criteria that CFIUS considers, oftentimes directed by the President of the United States. In Canada, under the current bill, that power would be delineated to the INDU committee and the public safety ministers instead of making sure, at the very least, it is a cabinet decision.

That would severely hamper our national security. Why? In 2017, the Liberal government allowed a telecom company from B.C. called Norsat to be acquired by a company called Hytera, which is a Chinese-based, state-owned company. Hytera does not make any money. The Conservatives demanded, at the time, a full national security review. The Liberal minister of the day refused to do one and approved the acquisition.

Lo and behold, in 2022, Hytera was charged with 21 counts of espionage in the United States and was banned from doing business there. Only eight months later, the RCMP in Canada, shockingly, bought telecommunications equipment from Hytera to put in its communications system. The government says the change would streamline the process and give security and intelligence agencies more time to complete their reviews, but, as it currently stands, if the public safety minister only is responsible for those reviews, they would miss the mark, as they did with Hytera.

I have another example, more hypothetically. What if the industry minister was from Ontario and the public safety minister was from Manitoba and they were about to make a decision about a security review in Quebec? Would Quebec cabinet ministers not want to be guaranteed feedback and a say in cabinet? If we give that power to just one minister and take away the power of cabinet, ministers across the whole country would potentially lose providing their input into something as important as national security.

I have shared with my colleagues the satisfaction of seeing intangible assets included under this review. I wanted to mention this today because it is very important. There are alarming statistics about how much of our intellectual property leaves this country. The University of Waterloo said that 75% of its software engineering grads are being pilfered and leave Canada to go elsewhere. The U.S. has 169 times the IP production of Canada. Canada produces $39 billion worth of IP a year, but the U.S. produces $6.6 trillion. Not only do we need to develop and commercialize the IP, but through this legislation we also need to protect it. It is very important, as the economy of tomorrow is intangible and full of ideas, that we do all we can to ensure we protect the ideas that come out of Canada, and not lose them.

We have the largest gaps in the world. The OECD has forecasted that Canada will have one of the worst-performing economies in the developed world in the next 25 years. Canada has not been able to keep up with the world when it comes to IP and a knowledge-based economy. Canadian policy is still firmly grounded in industrial-era concepts and is failing to develop national strategies for IP and data.

China developed 30,000 patents just last year in Al. Canada has developed fewer than 30,000 patents in all of our industries across all sectors.

The future of Canada needs to be protected in the airwaves, blockchain, Al, quantum computing, the sky overhead and the Arctic. It needs to be protected in our farms, food-processing plants, genomics, oceans and fisheries, as well as in developing Canadian LNG, which the world is desperately screaming for.

Going back to The Giving Tree story, unlike the government, figuratively and literally, the Conservatives would just plant more trees and protect those trees. When we give the world what Canada makes, Canadians make paycheques and Canadians benefit.

Let us agree to support this bill with the Conservative amendment to remove the power from one minister and make sure it stays in cabinet. Of course, in the future, a Conservative government will not only protect Canadian investment but build Canadian companies and attract investment to grow them.

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

Madam Speaker, the legislation would modernize the act. There has been so much change over the last 12 to 14 years that it dictates the government needs to do something, recognizing technological advances to AI and the importance of international interference.

What surprises me is that the Conservatives seem to be buckling down on the whole idea of not allowing the minister to have the authority. I am wondering if they would apply that principle to other areas of responsibility. What specifically is it? A consultation does take place with what I believe are other public safety ministers, though I am not 100% sure of that, but why is it the Conservatives do not want to see robust legislation that would enable a minister to take the action necessary in order to protect Canadian interests?

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, it is quite obvious: the minister has failed in the past and the minister is going to fail again. When it comes to national security reviews, we need to ensure we have all actors or all members who can participate in that review process be part of that process. I imagine the example of having a minister from Ontario, a safety minister from Manitoba and an industry in Quebec being looked at. I am not sure why the member would not want a Quebec minister or member of cabinet also being part of that conversation.

More importantly, in the past the minister has given away these resources. Neo Lithium is one example of when we gave away resources to make batteries. That was one minister's decision. We need to make sure it is the cabinet because we can have bad ministers.

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

Madam Speaker, one of our amendments that Conservatives put forward at committee was voted down at committee. I wanted to ask my colleague about it. It was the amendment that called for the modification of the definition of state-owned enterprise to include any company or entity headquartered in an authoritarian state like China, for instance. It was voted down.

I wonder if he could comment on the importance of that amendment and why it should have passed.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, not only at the industry committee, but also at the ethics committee, we have had CSIS and other organizations talk about just what state-owned companies do in Canada. One of the witnesses said:

Chinese law requires that all companies and individuals co-operate with their intelligence establishment and hide that co-operation [under state-owned law in China]. That, combined with the Chinese regime's unrelenting cyber and human-source spying on our Parliament, political parties, government departments, universities and businesses, is reason enough to conclude that foreign investment from China must be subject to the most stringent national security test, regardless of what sector or industry the proposed investment may target.

We are in a new world now. We talked about the importance of identifying and ensuring a review of all state-owned Chinese corporations' involvement in Canadian companies. It is of utmost importance. I wish the other parties would take that matter as seriously as we do.

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

Madam Speaker, I would like to ask my colleague to address something in the Canada Investment Act that he left out in his speech.

It is true that the Canada Investment Act includes a section on national security, but this legislation also includes a section that affects nearly every transaction for which the minister must assess whether it provides a net benefit to Canada.

First, I would like to know if my colleague is satisfied with the way this analysis is done on a regular basis. Second, does he not think that this section of the act could also use some modifications and adjustments to ensure that the transactions are carried out in the best interest of Quebeckers, in my case, and Canadians, in his case?

[Ryan Williams, Conservative, Bay of Quinte, ON]

Madam Speaker, net benefit review is extremely important. When we look at any kind of investment, state-owned or otherwise, we want to ensure that Canadians and Quebeckers are getting the best part of that deal for that.

When we look at one aspect, being the Volkswagen and Stellantis deals that have come into Canada, certainly we are evaluating that now. As parliamentarians we look at the net benefit to Canada. It seems that they are investments that, as I mentioned, are more branch-plant investments that did not look at the benefits to our Quebec mining sector. That should have been included to ensure that, any time there was an investment into batteries, we had investments in those mines as well, so that would create more Quebec jobs.

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, I am thankful for the opportunity to speak about Bill C-34 today. It has been said before that weak leaders create hard times. The bill is meant to deal with foreign interference and the lack of infrastructure. I am going to speak specifically about that lack of infrastructure in the north.

Point (b) in the summary says that the bill is meant to “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...”

Again, I think it is pretty easy to make the case that this weak NDP-Liberal government, after eight years, and I would also include the members of Parliament from those territories, has put Canadians at risk in the north. It does not take too long to find articles that are really concerned about this. I will even quote from leaders who are actually in the north.

This is an article from just a week ago: “CSIS warning Inuit leaders about covert foreign investment in Arctic, documents show... The Canadian Security Intelligence Service has warned Inuit leaders that foreign adversaries could gain a foothold in Canada by offering to fill infrastructure gaps in the north.”

This is what this legislation says it is supposed to prevent from happening, and that is good, I guess, but, again, this NDP-Liberal government has been in power for eight years.

“We are making decisions every day that are currently not as informed as they could be about threats and considerations,” said Inuit leader Natan Obed.

I will read on.

“...CSIS documents obtained by CBC News show that the agency is trying to grow its presence in the North and deepen its relationship with Inuit communities in response to 'economic, strategic and military interests of foreign states in the North.'”

I go up to the territories quite often. It is quite a different perspective when one gets to the north, because when one talks to somebody in the southern parts of Canada, the north, the territories, is a faraway place. They do not really get how seriously the territories take this because, really, it is their front yard. They are seeing foreign activity increase right in their own front yards.

The article went on.

“'Foreign interference is a significant threat, primarily from China and then Russia. Both desire access to natural resources in the Arctic, like minerals,' said one of the CSIS documents, released through an access to information request. 'To date, however, [CSIS's] presence in Canada's north and Arctic has been limited.'”

I will go on.

“...CSIS Director David Vigneault visited the region in 2022 and has had meetings with [local leadership]...His talking points for those meetings, released to CBC News, included questions for the leaders about partnering with foreign telecommunication providers. 'CSIS's interests in Canada's north and the Arctic stem from our mandated responsibilities to address security threats, including foreign interference and espionage,' the talking points say.”

On espionage in our Canadian north he said, “'These take the form of activities such as covert foreign investments or partnership arrangements, efforts to interfere in decision-making at all levels of government, theft of research or data and interference in research agendas or funding.'”

Lastly, Natan Obed said, “'There's still incredible infrastructure deficits in the Canadian Arctic, whether it be for airports, for marine facilities, or for just a network for shipping.'”

I started off by saying that weak leaders create hard times. Indeed, this government has had eight years to really strengthen what I would say was a pretty strong approach. The former Stephen Harper government, in 2015, spent a lot of time and made a lot of investments in the Arctic and we just have not seen that continue.

This goes beyond what people think of security, as in the military, investments. Arctic sovereignty really refers to supporting northerners in the north, to make sure that they have good jobs, that they can have healthy families and healthy lifestyles, so they can reside in the north and do so in a strong position.

A way to erode that is to erode the economy. When we erode the economy, we erode those investments that are often made as a side benefit of infrastructure or of industrial development, such as roads, fibre optic networks and other really important infrastructure, which we all use.

This is about a previous action by the Liberal government when there was a moratorium placed on offshore oil and gas development in the Arctic. Bob McLeod, the then premier, who is the brother of the current NWT MP in the House, was not very happy about the decision the Prime Minister made to shut down all development in the north. The premier said there was billions of dollars of investment that simply got pushed off the table. Those investments would have also impacted, in large part, indigenous communities.

The premier said, “we made the decision to unconditionally share 25 percent of resource revenues with NWT Indigenous governments. We are proud to be on the forefront of preserving Indigenous languages”.

However, he also states, and this is a quote specifically about the moratorium:

Restrictions imposed on our vital energy and resource sector—40 percent of our economy and source of middle class jobs and incomes for many of our people—are driving companies away, and with that go the jobs that sustain healthy families and community life. Staying in or trying to join the middle class will become a distant dream for many.

That was then premier McLeod speaking to Bill C-34. When we have weak economies in our territories because of Ottawa-knows-best policies, this is what happens. Infrastructure does not get built and that is what puts us in this precarious position. That was from the Northwest, Territories.

I am going to go over to Nunavut. A recent article is entitled “Arviat South MLA blasts proposed amendments to federal mining law”. This is an MLA in Nunavut criticizing the current member of Parliament for Nunavut. The article states:

During three separate question periods in the legislative assembly on Tuesday, Wednesday and Thursday, Arviat South MLA Joe Savikataaq asked Premier Akeeagok and multiple ministers for their positions on [the MP for Nunavut's] proposed amendments to the Territorial Lands Act.

The article continues:

He said if adopted [the NDP MP's] plan would impede the growth of mining in the territory and make it harder to increase Inuit employment in the mines.

“Not everybody wants to be a Government of Nunavut worker,” Savikataaq said. “Her position is completely wrong for Nunavut.”

I say that in relation to what we are talking about today. If economies are not developing and they are retracting, this is what happens. Investments are not made. We are put into a position where foreign governments can have undue influence because the territories are so desperate to get this infrastructure that it puts our security and sovereignty at risk.

As it relates to the security aspect of it in the military, we have seen recent quotes from former Liberal MP and general, Mr. Leslie. The article is entitled “Canadian Forces in desperate need of new spending, procurement follow-through”. The follow-through is what needs to be done here. The government makes a lot of promises. I have said in the House before that it has promised billions of dollars to modernize NORAD, but only $45 million has been spent. I have the documents from the estimates in front of me.

I will read from the article. It states, “Canada spends $23.3 billion on the Department of National Defence, but Leslie said the department has a chronic problem with actually using the funds.” Leslie stated, “Over the last seven years, the Armed Forces has been allocated roughly that amount but it hasn't been able to spend it all. And the blame for that lies squarely with the prime minister and the minister of finance,” and I would add on the NDP members to my left. The article continues, “Leslie, recruited in 2015 as a star candidate to write the Liberals' defence and foreign policy platform, is now disillusioned with the government procurement abilities.”

I started off by saying weak leaders create hard times. This weak, NDP-Liberal government has created hard times for us in the north, and it needs to change.

[Lori Idlout, NDP, Nunavut, NU]

Uqaqtittiji, I would like to thank the member for his interest in the north and the Arctic. I am not sure how genuine it actually is.

With respect to this act, the Investment Canada Act, when it comes to ensuring we are doing better at protecting individuals and the land, a lot of what we have to do in these pieces of legislation is prevent the acquisition of certain things. For example, in Nunavut there is a mining company that is not owned within Canada, and a lot of damage is being caused by this mining companies to our lands and our territories. What we need to do is make sure that there is free, prior and informed consent so that indigenous peoples can and will have a say in ensuring that legislation, such as the Investment Canada Act, can have a positive impact on them.

Does the member agree that ensuring free, prior and informed consent should also be included in acts such as these?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, I would go back to what I started off with saying, which is that the NDP is really the no development party.

I will quote an MLA from Nunavut, who said, “if adopted, [the member for Nunavut's] plan would impede the growth of mining in the territory and make it harder to increase Inuit employment in the mines.”

What the member for Nunavut is doing is preventing this infrastructure investment, the very thing the bill is talking about doing. It is encouraging investment so that the infrastructure gets built, especially in places where it is already lacking in the north. All the member is doing is causing less infrastructure development and less infrastructure to get built.

[Andréanne Larouche, Bloc, Shefford, QC]

Madam Speaker, in addition to discussing public safety, my colleague addressed the issue of national security by talking about the armed forces and commenting on that.

I would like to know whether he agrees that beyond the issue of national security, there is a blind spot in this bill, namely the matter of preserving our economic levers. I would like to know what he thinks because we have some head offices to protect.

How does this bill respond, or fail to respond, to my colleague's expectations when it comes to further protecting our economic levers?

[Bob Zimmer, Conservative, Prince George—Peace River—Northern Rockies, BC]

Madam Speaker, the economic development we hope to see with this bill is through the prevention of foreign interference from really taking hold.

I have a quote with respect to another security issue, which states, “Russia is a persistent proximate threat to North America. And we know that China has growing capabilities and ambitions. I don't think the status quo is going to keep us safe”.

I do not know if the House fully knows this, but Russia has made claims to our sovereignty over the Arctic seabed we claim belongs to Canada. There are many resources attached to that territory as well. Russia reiterated those claims just in March of 2023. It is imperative that we have strong infrastructure and sovereign security in our north.

[Lloyd Longfield, Liberal, Guelph, ON]

Madam Speaker, I would like to build on the security aspect that the Investment Canada Act, as amended, would now provide, the additional security protections against foreign actors, such as China and Russia, that want to capitalize on Canada's technological advancements, our skilled workforce and the economy, which is really coming along compared to other nations and puts us at risk with respect to security.

Could the hon. member comment on how we are building our security through the amendments to the act that have come back to us?