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

[Tony Baldinelli, Conservative, Niagara Falls, ON]

Madam Speaker, I rise today to take part in the debate on Bill C-34, an act to amend the Investment Canada Act. Bill C-34 attempts to update and strengthen the Investment Canada Act through seven significant amendments. Mainly, these changes to the act aim to protect Canada's national security with stricter regulations and higher penalties. Why does the government feel we need this bill? Here is a little background and some timelines.

In the Prime Minister's December 2021 mandate letter to the industry minister, he asked the minister to:

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.

In essence, this bill would give the industry minister more time and authority to assess foreign transactions that might compromise national security by removing the Governor in Council from the initial process while also making penalties more severe for violating the Investment Canada Act.

Why, again, is this bill needed? Well, 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 China-based Hytera Communications, which is partially owned by the People's Republic of China. In 2020, the Department of Foreign Affairs awarded a contract to China-based Nuctech, founded by the son of a former Chinese Communist Party secretary general, to supply X-ray equipment to 170 of Canada's embassies and consulates.

In response to some of these failures, in March 2021, the industry minister updated and enhanced guidelines for national security reviews for transactions involving critical minerals and state-owned enterprises. However, in January 2022, the same minister failed to follow his own guidelines when he fast-tracked the takeover of Canadian lithium company Neo Lithium Corp. by Chinese state-owned Zijin Mining without a national security review. In November 2022, the minister then ordered three Chinese companies to divest their ownership of three critical mineral firms, but not included was the previously approved acquisition of Neo Lithium. One cannot make this stuff up.

In December 2022, the RCMP awarded a contract to supply sensitive hardware for its communications system to Sinclair Technologies, formerly a Canadian-owned company, which is a wholly owned subsidiary of Norsat International. Norsat, founded and based in Richmond, B.C., itself was acquired by Hytera Communications. Hytera, headquartered in Shenzhen, China, is partially owned by the People's Republic of China and is a major supplier to China's public security ministry. It was also revealed in December 2022 that in 2017 the Canada Border Services Agency had been using communications equipment and technology from Hytera Communications, which worked with Canadian company Canquest Communications to supply the Hytera equipment.

Hytera has been charged with 21 counts of espionage in the U.S. and banned by President Biden from doing business in the U.S. When and if this bill passes, the government would need to come forward with regulations to identify the prescribed business sectors in which enhanced review processes would take place. These sensitive business sectors would be decided upon through regulation. However, it is expected these sectors would feature aerospace, defence, artificial intelligence, biotechnology, energy generation and medical technology.

After eight years of this Liberal Prime Minister, numerous foreign state-owned enterprises have acquired interest and control in many Canadian companies, intellectual property and intangible assets, and the data of our citizens. The government is doing little, too late to protect our national economic and security interests with this bill. Liberals do not take sensitive transactions seriously and have failed to fully review transactions involving Chinese state-owned enterprises, putting the security and material interests of Canadians and the government at risk while Conservatives have continually pressed the government to ensure that appropriate national security reviews are conducted on Chinese state enterprises. While we do agree with the general principle of this bill, we have also flagged issues in which this bill does not go far enough to address the risks faced by Canadians.

That is why at committee, Conservatives found opportunities to strengthen this bill. We actually found 14 opportunities. We put forward 14 amendments aimed at providing a far more rigorous review process of acquisitions and investments involving foreign state-owned enterprises. Unfortunately, the NDP-Liberal government rejected 10 notable Conservative improvements to this legislation, but we still managed to fight hard to get four amendments passed.

The four Conservative amendments that passed accomplished some changes. We reduced the threshold to trigger a national security review for all state-owned enterprises from $512 million in asset value to zero and, for countries not listed as trade agreement investors, we ensured all investments made by state-owned enterprises would be reviewable. We also implemented a requirement for the minister to review any investments or acquisitions made in Canada that exceed $1.9 billion in enterprise value instead of being an option.

These changes would be positive for Canadian industry, Canadian workers and our national interest, but Conservatives still see room for improvement in this bill. We will continue to work to improve Bill C-34 even further by working to delete clause 15, which would remove the mandatory consultations with cabinet in determining whether an investment is a threat to Canada's national security. This change would be problematic, given the number of state-owned enterprises made in Canada over the past eight years that have not undergone a security review as a result of decisions made by past industry ministers.

By removing cabinet from the process, decisions over whether an investment is considered injurious would receive less debate and scrutiny. By removing clause 15 from the bill, the language would revert to the act's current text, thus making all security review decisions reviewable by cabinet and not just by the ministers of industry and public safety.

After eight years of the Liberal government, numerous foreign state-owned enterprises have acquired interest and control in many Canadian companies, intellectual property, intangible assets and the data of our citizens, all under their watch. More needs to be done to protect Canadian interests and Conservatives will continue to work hard to achieve this.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Madam Speaker, I would be uncomfortable if I were the Liberals too, called out for their failed record on combatting foreign interference.

We had a resignation from David Johnston. We had 24 hours of filibustering at a committee because Liberals did not want the Prime Minister's chief of staff to testify. Let us not forget the Winnipeg lab documents where the House of Commons ordered the production of those documents, but the Prime Minister and Liberal government took the Speaker of the House of Commons to court in an attempt to cover up information that Canadians deserved to know.

As we talk about issues of combatting foreign interference, if we talk about issues of strengthening investment in Canada, there are many failings after eight years of the Prime Minister and NDP government that leave a lot to be desired. Bill C-34 is just scratching at the surface of what truly needs to be done.

[Eric Duncan, Conservative, Stormont—Dundas—South Glengarry, ON]

Madam Speaker, I am honoured to rise in the House, as always, and add my voice to the debate we are having here about Bill C-34. When we say “Bill C-34”, most Canadians who are watching or hearing the debate here would know exactly what that means.

I would remind members that today, we have heard several points of order from members on the Liberal side of the aisle who do not like the topics we are covering regarding this legislation. However, Bill C-34 is an act to amend the Investment Canada Act, modernizing ways in which the federal government could attract more investment in this country. This line is very important, because it was the Prime Minister who instructed the industry minister to “Contribute to broader efforts to promote economic security and combat foreign interference by reviewing and modernizing the Investment Canada Act”.

I am going to take the time I have on the floor here today, and hopefully not get “point of ordered” too many times from the other side, to say this: Actions speak a lot louder than words. What we have, after eight years of the NDP-Liberal government, is an economic situation in this country that is not very good. After the vote today, for example, a big contributor to the frustration of millions of Canadians is the punitive and damaging carbon tax that the Liberals, the NDP and the Bloc Québécois are imposing on this country. The carbon tax is bad for our economy, for business, for investment and for Canadian households.

In talking about investing in Canada and competition from other countries around the world, the example I am going to cite is one that the Leader of the Opposition, the member for Carleton, has raised from our neck of the woods in eastern Ontario.

We talk about the government's economic record, its actions and not just its words in a mundane piece of legislation. The Liberals are continuing to endorse the carbon tax, and they voted today against taking the carbon tax off all forms of home heating for all Canadians. If that is not out of touch, then the way we have greenhouses taxed, and the lack of competition, or frankly, taxing them out of business in this country in too many cases, is a perfect example of how the Liberals' policies are failing.

I think of SunTech Greenhouses in Manotick, in Carleton County just north of my riding in eastern Ontario. For years, it has been struggling to compete. It is based in Manotick, here in eastern Ontario, and it is struggling to compete on cost with tomatoes that come from as far away as Mexico, or even farther south than that. Why is that? It is because the greenhouse in eastern Ontario is being nailed with the carbon tax. The irony of all that is the fact that the CO2 it creates does not go into the atmosphere; it goes into the greenhouses and into the plants that are being grown here locally. It is local food, a local economy and local investment, yet it is getting nailed with the carbon tax, which is the height of irony. It is struggling to compete with tomatoes shipped from Mexico, coming up on a ship and then by truck, and those countries are paying no carbon tax whatsoever.

What we are seeing is our potential in agriculture in this country being hurt badly. We are seeing farmers being taxed for growing food, truckers being taxed to ship the food and grocers being taxed to sell the food. It is adding to a competition problem in this country, and it is adding to, not taking away from, the cost of living crisis in every single part of this country.

I think about two areas I have had the opportunity to visit in recent months. Let's say someone runs a business in northern Ontario and is trying to compete for investment into Canada and actually taking the investments here and maybe exporting around the world. Timmins is hundreds of kilometres away from southern Ontario and the United States, our largest trading partner.

Let us just think about it for a second. There are zero rebates for businesses in Timmins when it comes to these carbon taxes that they are being nailed with. This is only just beginning. They are going to be quadrupling in the coming years. If they are trying to compete with a business in, say, Michigan or even the other way around, if a business in Michigan is competing with somebody at the soup and salad bowl, Simcoe County in Ontario, if a business is trying to take the 600 or 700 kilometres up to Timmins to provide groceries and fresh food, they are being nailed with the carbon tax on the Canadian side.

One of the things I think is really important in this debate is what I will say again: actions speak louder than words. We have a modernization effort here in this bill, long past due. We have tried to add to and strengthen the bill in many ways with no success from the Liberal government.

We talk about priorities and we talk about legislation coming forward. There are so many ways to combat the problems we are facing. Axing the carbon tax is a very high priority for a growing number of Canadians. It is not an environmental plan. It is a tax plan and it is punitive to competition and to investment in Canada, as we can see by recent stagnant numbers, which we are continuing to see in economic indicators on inflation, on housing and on our growth as an economy. We are going in the wrong direction.

The other half I want to highlight is when we talk about efforts to combat foreign interference, we will not look at the words. We will look at the actions of the Liberal government the past couple of years.

We have seen multiple efforts by the Prime Minister and the NDP and Liberals voting together multiple times to ignore, brush aside or try to sweep under the carpet the seriousness and magnitude of foreign interference in our country. In response to the bombshell allegations that were leaked by journalists and courageous whistle-blowers who had to come forward to give the information, we found out that there were numerous members of Parliament who were under surveillance, under threat. It was not until these leaked reports and these whistle-blowers came forward and they were published on the front pages of The Globe and Mail and other national publications that the government finally attempted to address the issue.

Look at the Rosenberg report by Morris Rosenberg after the 2021 election. That was an absolute whitewash attempt to cover up the severity and the depths to which the Communist Party in China attempted to interfere in our democratic process. They did not even bother to interview members of the official opposition from the Conservative Party on their experiences and evidence of serious wrongdoing in the 2021 election. They said that report would be good enough and tried to move on.

Second, whenever further allegations came and they were under further pressure, their actions spoke louder than their words. They appointed a special rapporteur. Most people had to google what rapporteur even meant. For months they went on a charade in a process that resulted in the resignation of David Johnston after he lost a lot of credibility—

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

Madam Speaker, I do not think so. The difficulty is that, yes, there would be improved transparency once one has a review, but what would trigger a review in an issue like that of Paper Excellence, which I have referenced? How wide is the net cast, and when could we take concerns forward?

I wish we had more time. I will vote for Bill C-34; let me make that clear. It is an improvement and would modernize the Investment Canada Act. I think I would like to also vote for one of the Conservative amendments, to ensure that cabinet would retain control in the reviews. In any case, I will vote for it, but I am very concerned, because the innovative ways in which Canadian corporations are taken over by foreign interests do not trigger the usual notion of national security but can be very significant for national sovereignty. That is my concern.

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

Madam Speaker, it is an honour to rise in this place to speak to Bill C-34, which has been before the House for some time. I must state my great regret that time allocation has been applied to it before any member of the Green Party has been allowed to speak to it.

People know that when someone rises on the government's side and says it has had 20 speakers, 20 witnesses and so on, it sounds exhaustive. However, the rules in this place are intended to allow a proper debate of every bill that involves all members with an interest in it. Members will know that I have long decried, as mentioned earlier in this debate, the use of written speeches. This allows more members to speak to a bill who have a strong interest or background in the subject matter.

I think in this case we have the reverse. We have a really important piece of legislation that got all the way through second reading without any speakers from my party, and then it got into committee, where we are not allowed to be members. Then amendments were made, and here we are at report stage already and I have a lot of concerns. Without further pause to reflect on my regret that this is the first time I have been given a speaking opportunity in this place, let me speak to the Investment Canada Act and to the revisions that are made in Bill C-34.

It is very important that we, in 2023, take a new lens and look at what we mean by foreign investments of concern and what that means for national security and national sovereignty. I am concerned that the bill leaves cabinet decision-making more as a discretionary matter and that there will not have to be a cabinet decision unless there is a recommendation from the minister.

Triggering a foreign investment review has never been easy in this country. Let me just reflect for a moment on two specific cases. I think one will be better with the changes made under Bill C-34, but I hate to say that, even at this late hour, I am not certain this bill would improve the situation on a more complicated matter.

Let me speak to the first one. It was a few years ago that a takeover was proposed for one of Canada's largest engineering firms, Aecon. It had gone quite far. It was reported in the business pages that Aecon was to be purchased, after being approved by Aecon shareholders, by a People's Republic of China company, CCCI. It was moving along without concern.

It was in 2018 that I was the first member of Parliament to raise on the floor of the House of Commons a concern: Did we not need a national security review before one of the largest engineering companies in Canada became the property of a company based in the People's Republic of China? It has been a particular concern of mine for some time because, back in the Harper years, a decision was taken by cabinet alone with no vote. I want to repeat that for new members of Parliament, as it will be shocking to them. We never had a vote in the House of Commons on the approval of the foreign investment promotion and protection agreement, otherwise known as a FIPA, between the People's Republic of China and Canada.

It gives corporations and state-owned enterprises from within the People's Republic of China superior rights, if they are a Canadian company, to complain of changes made by regulation, complain of court decisions or complain of any number of matters where a corporation feels that its expectation of profits has been somehow reduced. This originally emerged as an investor-state provision in chapter 11 of NAFTA back in the day when it was NAFTA. Ironically, this investor-state provision has been removed from CUSMA, but it has been transplanted into bilateral trade agreements. However, they are not even trade agreements, as in the case of the FIPA with China. There is no trade deal between the People's Republic of China and Canada. Thanks to former prime minister Stephen Harper, there are investment protections for corporations from the People's Republic of China that Canadian corporations cannot access.

Even worse, the FIPA with China keeps any complaints from the People's Republic of China or its state-owned enterprises completely secret. The complaint process is secret. We would only find out about it if it went to the end, to an arbitration. That would be reported.

I do not have enough time in the time I have to speak to Bill C-34 to fully explain why we must have a very different lens when looking at the takeover of Canadian enterprises by any foreign entity. If that foreign entity has the benefit of an investor protection agreement that gives a corporation superior rights to a domestic Canadian corporation, it is very concerning.

I think I had to raise it two or three times in the House before a few other MPs began to say that they were also concerned about Aecon, and in the end, the minister triggered a foreign national security review. It was turned down. The decision was made by the Government of Canada, I think appropriately, to stop the takeover of Aecon by a corporation in the People's Republic of China.

More complicated and recent is the takeover of virtually all of Canada's pulp and paper production by a corporation owned by one man. It is not a limited corporation. It does not appear on the stock exchanges of any country. The name of this corporation is Paper Excellence. It is owned by one human being, one sole person who is a billionaire from Indonesia.

Some of the media coverage, which thank goodness has been intensive, is quite belated. Basically, Paper Excellence had already bought up Domtar, already bought up Catalyst Paper and already bought up Resolute, and after purchasing Northern Pulp of Pictou, Nova Scotia, suddenly Paper Excellence, which has a registered headquarters in Vancouver but is no more Canadian than the Indonesian billionaire who owns it, has bought up virtually all of the pulp and paper processing across Canada.

This is alarming. Is it a national security threat? The question was never asked. No one really saw it coming. It was only seen through the media investigations subsequent to this Indonesian billionaire-owned enterprise called Paper Excellence becoming the owner of all the pulp and paper mills.

The acquisition of Resolute Forest Products had a major impact in Quebec. Many people, including members of the Bloc Québécois, are very concerned since Resolute is an important player in Quebec's pulp and paper industry.

It is also very important in British Columbia, where Catalyst Paper is based. The mill in Crofton and the mill in Powell River were purchased initially from Catalyst Paper and suddenly became owned by a very mysterious Indonesian billionaire. Should this have had a review? Media coverage has managed to unearth that the buying spree of Paper Excellence was likely, although we do not know for sure, financed by loans from the state investment bank of the People's Republic of China.

Do Paper Excellence mills have access to the FIPA with China to complain if we make changes in any way, like provincial changes in Quebec or British Columbia, where these mills are based? They would have access to the FIPA if they can make the case that they are operations of the People's Republic of China. We do not know if this investment is from the People's Republic of China.

Even with the changes made in Bill C-34, I am not reassured that we would have caught what was going on with Paper Excellence. Would we have had an opportunity to have a foreign investment review before this single Indonesian billionaire began buying up all our pulp and paper mills? I wish I had had an opportunity at committee. I wish I had had an opportunity to be in debate at second reading. I know the hon. member for Timmins—James Bay raised some of these issues at the time. He is also concerned about Paper Excellence.

With the time remaining, I will say I think it is unfortunate that we have time allocation now and these issues are rushed. It is unfortunate that we will not adequately debate the amendments that have come forward at report stage, such as the ones I have heard mentioned by the member for South Shore—St. Margarets. I close here and hope we have not missed too much.

[Ted Falk, Conservative, Provencher, MB]

Madam Speaker, to carry on, in a so-called capitalist system where the Prime Minister picks the winners and the losers and stacks the deck to ensure a select few friends get rich while everyone else is pushed to become reliant on government for everything from housing to basic income, the general trend, and I believe the endgame of the government, will inevitably collapse.

Likewise, so would a democracy that has been left unprotected and consistently undermined by the actions of the Prime Minister and his friends in Beijing. Beijing had spies, scientists with ties to China's bioweapons program, in our National Microbiology Laboratory in Winnipeg, which is one of our most secure facilities. Now, they are nowhere to be found.

The Prime Minister took the former Speaker of the House, the person who sat in Madam Speaker's chair, to court and sued that person to prevent the truth about what was happening at the Winnipeg National Microbiology Lab with those Chinese spies from coming out.

There is hacking and espionage against Canadian infrastructure, academia and industry. The list goes on and on. It is always China. What has the government done so far? In eight years, what has the Liberal government done? It has done nothing up until today, unless of course we include cash for access with Chinese billionaires and donations to the Trudeau Foundation.

However, now the Liberals have a plan, which is Bill C-34. What is the solution government members have put forward? Are they proposing to ban Communist Chinese acquisitions of Canadian companies or to take China to the World Trade Organization? Would they expel Beijing-run spies and state police from Canada? No, they would not. Their solution is more government, more bureaucracy and specifically for more power concentrated in the minister. This would not be the Minister of Public Safety or the Minister of National Defence, but with the Minister of Innovation, Science and Industry. It is bizarre. One cannot make this stuff up.

In almost case with the government, it is the same minister who created the problem tasked with fixing the problem. In this case, we have the minister of industry, who I actually like. I wish him all the best in his leadership bid. In 2017, before his time, the minister of industry failed to request a full national security review of the acquisition of B.C.-based Norsat International and its subsidiary Sinclair Technologies by Hytera Communications, which is owned by the People's Republic of China.

Then, in December of 2022, under the former public safety minister, the RCMP awarded a contract to supply sensitive hardware for its communication systems to Sinclair Technologies, which was then owned by a Beijing company and major supporter to China's public security ministry. Then it was revealed, also in December of 2022, that since 2017, the CBSA had also been using communications equipment and technology from Hytera Communications.

Hytera has been charged with 21 counts of espionage in the United States and has been banned by President Biden from doing business in the U.S., but it has not been banned here in Canada, not under the Liberal government. How did the minister respond to these acquisitions? He thought it was cool.

Let us look at another example. In March 2021, the minister updated and enhanced guidelines for national security reviews for transactions involving critical minerals and state-owned enterprises, but in January 2022, he failed to follow his own guidelines when he fast-tracked the takeover of Canadian lithium company Neo Lithium Corp by, once again, Chinese state-owned Zijin Mining Group, without a national security review taking place.

Then, in November of 2022, the minister ordered three Chinese companies to divest their ownership of three critical mineral firms, but guess who he forgot to mention? It was Neo Lithium. The list goes on.

I am not sure what is more astounding: that it is always China with the Liberal government or that the minister can put forward this legislation with a straight face. How can he expect the House or Canadians to trust him to solve this problem when his own lack of oversight has been so instrumental in creating the problem?

As I wrap up, I will say that the member for Kingston and the Islands always asks whether there is nothing positive in the legislation, and if we cannot say one positive thing. Even he needs reassurance that the Liberals are not completely dropping the ball.

Therefore, I am happy to inform him and his—

[Ted Falk, Conservative, Provencher, MB]

Madam Speaker, it is always a privilege to rise in the House.

Before I really dive into my speech on Bill C-34, I just want to acknowledge Marilyn Bouw, the president of the Springfield Agricultural Society, for hosting my wife and me at their annual banquet. She is a tremendous advocate and supporter of agricultural communities in her riding of Springfield and broader.

I also want to mention Mayor Myron Dyck from Niverville, Manitoba, who also hosted my wife and me this weekend, together with his wife Shari, at the Niverville Heritage Centre annual fundraising banquet. The Niverville Heritage Centre does a tremendous amount of good work in the community, especially supporting our vulnerable seniors.

I thank Niverville Heritage Centre very much.

The interesting thing about what came up this past weekend at both of those events was the issue of the carbon tax. Folks at both venues talked to me about the carbon tax vote that we had here earlier in the House today. They said, “How is it going to go, Mr. Falk? Is this a confidence vote? Will this actually bring us into an election?”

We know that the Liberals want to quadruple the carbon tax and we know that, already, Canadians right across the country are experiencing significant increases to the cost of living and affordability is top of mind for almost all Canadians.

They asked me—

[Ali Ehsassi, Liberal, Willowdale, ON]

Madam Speaker, I am pleased to rise in the House today to speak in support of Bill C-34, An Act to amend the Investment Canada Act.

This bill would improve our ability to respond to changing circumstances that affect Canada's economic well-being and to remain vigilant in upholding our national security. More specifically, I want to focus on how our government's efforts to modernize the Investment Canada Act would help protect the intangible assets of Canadian businesses, which are the cornerstone of economic growth in a 21st-century economy.

As all members are fully aware, intangible assets, such as intellectual property, trade secrets and data, are of immense importance to our economic vitality and prosperity. As such, our country and other open economies are increasingly being targeted by hostile actors, which pose a threat to our national security, continued economic well-being and prosperity.

Consequently, our government is taking timely action to respond to evolving threats to our economic well-being and national security. Foreign investment certainly fuels innovation and assists businesses to succeed and grow. However, I want to emphasize that we should not compromise when safeguarding Canada's economic interests. As members will note, we should be laser-focused on striking the right balance between attracting foreign investment to help Canadian businesses grow and remaining mindful of the need to protect our intangible assets and intellectual property.

Highly innovative Canadian companies are at the forefront of developing new technologies, such as quantum computing, biotechnology, medical devices and innovative clean energy. Attracting investments to actualize innovation is complex and challenging, yet the safety and protection of Canadians is our government's number one priority. Canada must have a robust and flexible tool kit to protect Canada's interests from national security threats, which come in many forms.

We heard from multiple witnesses on this topic in the context of hearings arranged by the Standing Committee on Industry and Technology. Those witnesses shared their expertise to highlight that hostile state and non-state actors are increasingly pursuing strategies to acquire goods, technologies and intellectual property for uses that are incompatible with our national interest and economic outlook.

We also heard witnesses signal how foreign investment can be a conduit for foreign influence activities that seek to weaken our long-term economic prosperity. Around the world, foreign investment regimes are getting finetuned to better incorporate national security considerations. Our international partners are taking action to respond to shifting technological and geopolitical threats by amending their investment screening regimes.

The U.S. overhauled its foreign direct investment laws in 2018 by adding new types of transactions to government review. For the first time ever, the U.S. also mandated notifications in transactions involving critical technologies. These regulations came into effect in February 2020.

Similarly, Australia updated its regime in January 2021 to grant its government the discretion to require mandatory notification for transactions with a national security dimension. The same can be said for the United Kingdom, which introduced a new stand-alone regime for national security and investments in January 2021.

The U.K. established a mandatory obligation to secure clearance for transactions where control of a business was acquired in 17 sensitive sectors, to be secured before the transaction is completed. The U.K. also introduced legislation that allows the government to impose interim orders while the review is being conducted.

I reference such changes in the U.S., Australia and the U.K. to make a simple point: Canada's national security review authorities under the ICA have been in place since 2009. Quite often, changes introduced by our allies are meant to ensure that they catch up to where we already are. Given our track record, Bill C-34 is the latest in a series of actions our government is taking to make our regime more robust, responsive and flexible.

I would remind members that in March 2021 we updated the national security guidelines to advise that investments involving sensitive personal data, sensitive technologies and critical minerals, as well as investments by state-owned or state-influenced investors, would face enhanced security. The next step came in 2022 when we issued a new policy for review of foreign investments originating from Russia.

In 2022, we also introduced a new voluntary filing mechanism for investors intending to obtain greater regulatory certainty with the same statutory deadlines as a mandatory filing. In addition, we now have five years to review and adopt measures regarding an investment in the absence of a voluntary filing.

As members can see, Bill C-34 is just the latest effort to ensure Canada's foreign investment review regime represents the gold standard. Fundamentally, our government believes that an effective investment review regime must adapt to changing world dynamics and business practices. To respond to the evolving and accelerating threat environment, now is the right time to modernize key aspects of the ICA.

Bill C-34 would better align Canada with our international partners and allies. One of the ways our regime would align more closely with allies includes introducing the new requirement for prior notification of certain investments. This particular amendment would ensure that Canada has greater oversight over investments in certain sensitive sectors, especially when they give investors material access to assets and non-public technical information, such as cutting-edge intellectual property and trade secrets, once the investment is finalized. It would enable the government to prevent potentially irreparable damage. Investors would have to provide notice of the transaction within the timelines specified in the regulations.

A second important change is that it would provide our government the authority to impose interim conditions on an investment during the course of a national security review to prevent potential national security injury taking place during the time the review is being conducted. Another amendment would allow Canada to share case-specific information with international allies to support national security assessments.

Finally, the ICA includes a provision to allow for closed material proceedings. As such, the act would introduce new rules that would allow for more effective judicial review of national review decisions by allowing the use of sensitive information, while also protecting such commercially sensitive information from disclosure. Ultimately, these significant amendments would ensure that Canada's tool kit evolves and adapts to the changing global threat landscape.

It is for these reasons that I believe the House should support this bill and these new amendments. Where national security is concerned, we should never hesitate to take decisive action.

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

Report Stage

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

Mr. Speaker, today we are talking about Bill C‑34 at third reading stage. I feel like I am going back in time because even though I am not a member of the committee that studied Bill C‑34, I had the opportunity to speak to it at second reading. That was on February 8, if I am not mistaken. I find it fascinating to see what has changed in the bill between February 8 and now, or rather, what has not changed in Bill C‑34.

At the time, we said that it was an interesting bill that would enhance security, for example in terms of foreign investments in sectors where we feel that national security might be jeopardized or in danger. We said that we agreed.

However, we also said that we should take the opportunity to examine another thing while studying Bill C-34, an act to amend the Investment Canada Act, which includes a mechanism for initiating a study or review of an investment when it exceeds a certain threshold, in order to determine whether the investment is of net benefit to Canada. That is what Bill C‑34 says. We thought we should go a little further than just considering the issue of national security and also question the effectiveness of this legislation in terms of protecting our head offices.

When a foreign entity comes to Canada and says that they want to buy a certain brand or company for a lot of money, and when that purchase would have an impact on our entire supply chain, our infrastructure, our habits and our competition system, one of the first things we should instinctively do is look at whether it is a good investment or not. Unfortunately, that was not included in Bill C‑34 at the time. It is still not in Bill C‑34 today. There are mechanisms, but they are weak. They are extremely weak.

Back when I was elected in 2015, the review threshold was set at $300 million. That was okay, because at least some reviews were being done. Maybe it might have been better if it were lower, but a threshold of $300 million would already capture many businesses. The government could say that a review would be done to see if allowing a foreign business or investor to buy a business worth $350 million, $400 million or $600 million would be of net benefit to Canada. I thought it was a good thing. There was a baseline.

The problem is that, since the Liberals took office, the threshold has jumped. Today, it is no longer $300 million. It is $1.7 billion. I challenge anyone in the House to go search online and find a Quebec business worth more than $1.7 billion. There really are not many. There are maybe a handful, no more than 10 for sure.

In theory, a wealthy investor, or several wealthy investors, from any country in the world could swoop in and buy everything, or nearly everything, and the government would not make a peep because each of the transactions is less than $1.7 billion. According to the government, that would not be a big deal. That is the reality of this government's laissez-faire attitude. What is worse is that the government has exacerbated the situation over the years, saying that things are fine that way.

In Quebec, we take the notion of national interest to heart. It is important to us. However, in a self-proclaimed postnational state like Canada, nobody even knows what a nation is anymore. How can the government know what is in the national interest if it does not even know what a nation is?

The problem relates to a significant difference between the economies of Quebec and Canada. It may be an underlying factor in the government's non-response or hands-off approach to this issue. Canada has a branch-plant economy, which means that, naturally, a foreign company that sets up shop in Canada will often have a Canadian head office. The company will do all the buying, but it will keep a head office in Canada and manage its Canadian interests from there. It might well belong to someone who is 1,000 kilometres outside the country, but that is no big deal because the company still has a small head office here. Where is the head office usually located? It will be located in Toronto, not in Montreal, Quebec City, Shawinigan or Boucherville.

That is sad because many entrepreneurs in Quebec are working hard to build a strong ecosystem. We decided to build an entrepreneurial economy, rather than the type of branch-plant economy that is part of Canada's vision, if it even has one.

The Bloc Québécois has a constructive vision. We simply want to know what is happening. We want investments to be reviewed. We are not saying that we are against investment, but we want to at least know whether an investment is in our interest before it is authorized.

I am very disappointed. The fact that the government is not even thinking about this is problematic. The government does not even want to know whether investments are in our interest or not. If the transaction is less than $1.7 billion, the government closes its eyes, signs on the dotted line and everything is good. That approach is not working and, unfortunately, we are going to have to resolve that problem. If Canada does not want to solve this problem within the framework of the Canadian Confederation, then an independent Quebec will certainly be able to solve it when it has all the tools at its disposal to make its own decisions.

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

Mr. Speaker, I would like to take this opportunity to respond right away to my Conservative colleague, who is criticizing us for not supporting their amendment to Bill C‑34.

The Bloc Québécois did not support the Conservatives' amendment to Bill C‑34 because it was too broad. It was so broad that it included just about every investment not originating with one of the Five Eyes countries, the Commonwealth allies or certain major countries in the world. Unfortunately, my colleague may not be aware of this, but Quebec accounts for 40% of European investments in Canada. The amendment would have discouraged a whole lot of investments.

We suggested another solution. We suggested lowering the review thresholds, which had been raised so high that we ended up with a net benefit review threshold of $1.7 billion. In 2015, that figure was about $300 million. Why has the review threshold skyrocketed like this, and why do the Liberals seem to think that is okay?

I would like to know if the Conservatives are okay with it too.

[Michael Cooper, Conservative, St. Albert—Edmonton, AB]

Mr. Speaker, I rise to speak to Bill C-34, an act to amend the Investment Canada Act, at report stage. I will get into the particulars of the bill shortly, but before I do, let me say that in a little more than an hour and a half, Liberal members across the way will have a choice. They can vote for our common-sense Conservative motion to axe the tax on all home heating, or they can do the bidding of their boss, the Prime Minister, and sell out their constituents.

These are Liberal MPs from Ontario, Alberta, Manitoba and British Columbia. We will see whose side they are on, because their colleagues from Atlantic Canada, including the member for Avalon, received an exemption for Atlantic Canadians on home heating oil. However, it seems that all other Liberal MPs are so useless that their constituents, including my constituents, Albertans, have received nothing. We will see whose side Liberal MPs, including the member for Edmonton Centre and the member for Calgary Skyview, are on very shortly.

With respect to this legislation, when it was presented in the House at second reading stage, it was a modest bill. It was, frankly, inadequate in terms of strengthening the foreign investment review process, which takes into account the net benefit for Canada, as well as national security considerations. However, the good news is that the bill has been significantly improved thanks to four Conservative amendments that were adopted at the Standing Committee on Industry and Technology, although opposed by the Liberals.

I would submit that the most important of those amendments is to require a mandatory security review for investments by foreign state-owned enterprises in which Canada does not have a trading agreement with the countries.

This legislation marks the first major revamp of the Investment Canada Act since 2009. It goes without saying the foreign investment environment has changed considerably in that time, with foreign bad actors, including Beijing, posing an increased threat to our security and sovereignty.

PRC firms work closely with Beijing's military and intelligence apparatuses to gain information about foreign companies, as well as to acquire their technology. Professor Balding, who testified at the industry committee in 2020, indicated that PRC firms are actually given a list each year of foreign assets to acquire, underscoring the threat posed by Beijing.

The fact that we have this increasing threat demonstrates that the Investment Canada Act is long overdue for an update. However, for the past eight years, the Prime Minister has been asleep at the switch, while Beijing has attacked our sovereignty, security and democracy on his watch.

Beijing has used its embassy and consulates to interfere in our elections and to target sitting members of Parliament for daring to speak up and call out Beijing's egregious human rights violations, including the genocide being perpetrated against Uyghur Muslims as we speak. This regime has set up illegal police stations to harass, intimidate and repatriate Chinese Canadians, and it is spreading disinformation on a mass scale to divide Canadians.

In the face of that, the response of the Prime Minister has been to do nothing, to turn a blind eye. Indeed, the only concrete measure that the Prime Minister took was to expel one Beijing diplomat, but only after he got caught for keeping the member for Wellington—Halton Hills in the dark about how he and his family were targeted by a diplomat at Beijing's Toronto consulate.

For the past eight years, Beijing has effectively been given the green light to acquire vast amounts of farmland. It has gained a foothold with respect to critical infrastructure and strategic resources, including minerals. Even worse than that, we have a government, under the Prime Minister's watch, that has refused to undertake national security reviews and has given the green light to Beijing-controlled enterprises to invest in Canada and acquire Canadian companies, to the detriment of Canada's national security. In so doing, it has also caused irreparable damage to Canada's reputation among our Five Eyes allies.

One egregious example of that, and I stress that there are many examples I could cite, was when the Beijing-controlled Hytera sought to acquire the B.C. communications technology company Norsat, which worked with National Defence Canada, Public Safety Canada and the Pentagon. Our U.S. ally said to put a pause on this takeover by Hytera, but the Liberal minister of the day, in his infinite wisdom, ignored the U.S. and gave the green light without any security review.

Last year, Hytera was charged with 21 counts of espionage by the U.S. This underscores the degree of recklessness on the part of the government to give the green light, not to mention the damage it has done to our reputation with our most important ally, the United States.

As bad as that is, one would think that after a company such as Hytera was facing 21 espionage charges in the U.S., it would be enough for the government to decide not to do business with Hytera. However, one would be wrong; it was not enough for the current Liberals. Eight months later, the Liberals gave the green light for a contract with the RCMP to sell technology to protect sensitive RCMP communications equipment for espionage from a subsidiary of none other than Hytera, a company charged with 21 counts of espionage. One cannot make this stuff up. It is scandalous incompetence with real national security implications.

In 2020, to make it appear that he was actually taking Beijing's interference seriously, the minister of industry announced a policy of enhanced scrutiny for investments from foreign state-owned enterprises. No sooner had he announced the policy than he disregarded it, giving the green light to another Beijing state-owned enterprise to acquire a mining company that operates the largest lithium mine in Canada. Now, all that lithium is controlled by Beijing.

In closing, let me say that when it comes to protecting Canada's national security from authoritarian states such as Beijing, the government cannot be trusted. The good news, however, is that this bill would require the reckless government to undertake the security reviews that it should have taken but did not. On that basis, it is a much stronger bill going forward, thanks to the Conservatives and no thanks to the Liberals.

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

Mr. Speaker, could the member provide his thoughts in regard to the idea that this is a modernization? It has been a number of years since the legislation has been changed to the degree that is being proposed today. Because of technological changes over the past decade, changes to the legislation are badly needed. That is one reason why we hope to see Bill C-34 pass as quickly as possible.

Could he comment on the importance of getting this passed before Christmas?

[Richard Cannings, NDP, South Okanagan—West Kootenay, BC]

Mr. Speaker, I am happy to rise today to speak to Bill C-34, which would update the Investment Canada Act. This act is designed to do two main things. The first is to ensure that foreign investments in Canada have a net benefit to Canadians. The second is to ensure that foreign investments are not detrimental to our national security.

Many Canadians, especially Canadians of my age, might know this act better by its former name, The Foreign Investment Review Act. In its early days in the 1970s, it was brought in to deal with a rash of foreign buyouts, mainly American, of Canadian companies.

The Foreign Investment Review Agency approved about 90% of the transactions it dealt with, but was criticized by both Liberals and Conservatives for actually doing its job by blocking some proposals that did not show a benefit to Canadians.

Therefore, Brian Mulroney brought in the Investment Canada Act in 1984. He replaced the Foreign Investment Review Agency with Investment Canada, saying that he wanted to welcome foreign investment. True to his word, under his government, Investment Canada did not block a single foreign investment transaction, not one. The Liberal governments that followed Mulroney, under Jean Chrétien and Paul Martin, had the same record, not one application blocked.

The Harper government was a different story. Harper blocked the sale of British Columbia-based Macdonald, Dettwiler to the American company Alliant based on both financial and critical technology arguments.

On the other hand, in 2012, the Harper government allowed the $15-billion sale of Canada oil company Nexen to the China National Offshore Oil Company, owned by the Chinese government, and the $6-billion sale of Progress Energy to Malaysia-based Petronas. However, the same day, Harper changed the Investment Canada Act to block state-owned foreign investment in Canadian oil and gas companies, essentially closing the barn door after the horses had left.

Therefore, legislation regarding regulating foreign takeovers of Canadian companies has changed from time to time over the past decades. Foreign investment trends have changed as well. The share of U.S. investment in Canada has declined over the past few decades, but it still leads the pack followed by the Netherlands, the United Kingdom, Luxembourg, Switzerland, Japan, China, Germany, Brazil, France and Bermuda, although, I suspect the high placement of Luxembourg and Bermuda reflects more where Canadian companies are hiding their profits than real sources of investment.

However, it is clear that we need to keep up with the times in regulating foreign investment, and Bill C-34 is another example of that.

Information and data are the new oil, and earlier versions of the Investment Canada Act were essentially blind to that. The bill before us introduces a pre-implementation filing requirement for certain investments to give earlier visibility to situations where there is a risk that a foreign investor would gain access to sensitive assets or information immediately on closing.

I have talked to numerous tech companies over the past few years. One story I hear repeatedly is that small Canadian tech companies work hard to develop a new technology, say in hydrogen energy development or AI advances. However, when it comes to expand their companies to really get their product to market, they need investment. Too often in the Canadian tech ecosystem, these companies simply get bought out by bigger companies from the United States, Europe or China. With those sales go the intellectual property that represents the core of their company's value.

The present version of the Investment Canada Act allows companies to report takeovers after the fact. However, if critical intellectual property is involved, it is usually too late to stop the transfer of that information, if we find out about the transaction 30 days later, for instance. It is not like the old days when the main value of a company was in the factories it owned. This new pre-implementation filing could help put a stop to that where necessary.

There are several other improvements that provide more flexibility for the minister to act and better manage the entire process.

What would make the act even better? First, the act should mandate the review of an acquisition by a state-owned enterprise of a company previously reviewed by the ICA, and I would like to spend some time on a story that illustrates why this is needed.

There is a company called Retirement Concepts that owns and operates a number of seniors residences in British Columbia, long-term care homes. One of them is the Summerland Seniors Village just outside the federal riding I represent but within the provincial riding I live in. When I first sought to enter politics 10 years ago, I was involved in a provincial election in that riding.

The Summerlands Seniors Village was involved in a tragic story of a local family that lost both its mother and its father in 2012 to poor care and accidents. I met with members of the family and heard the heart-wrenching story of neglect that had taken the lives of their parents.

After that incident, the provincial government demanded that Retirement Concepts hire more staff, but managers claimed that no one was applying. I am guessing that a combination of low wages and overworked conditions had a lot to do with that.

In 2016, Chinese insurance giant Anbang, then a privately held company, bought Retirement Concepts, a transaction that was reviewed and okayed by the federal government's investment review process. Less than a year after that purchase was okayed, the Chinese government seized the Anbang company and jailed its chairman for fraud. Perhaps it knew something that the Canadian government missed when that review was carried out.

Suddenly, we have the Chinese government owning a company that is one of the largest providers of long-term care in Canada and certainly the largest in B.C.. Not only is it one of the largest providers of long-term care, it is known to provide very poor care at times for our seniors.

In fact, in 2020, the provincial government in British Columbia had to seize management control of four care homes run by Retirement Concepts because of the continuing problems with poor care. It returned that control just over a year later, but it is an indication of the general lack of priority Retirement Concepts had placed on the care of seniors.

At present, there are no provisions in the Investment Canada Act that would allow Investment Canada or the minister to be able to review the subsequent acquisition by a state-owned enterprise of an ICA-approved takeover or merger by a foreign private company. We have to change this.

The NDP put forward an amendment that would allow for the review of a takeover by a state-owned enterprise. This can be done by establishing the power to require a mandatory divestment of all Canadian assets by entities in these specific circumstances.

As an aside, in the case of long-term care homes, the NDP is very much in favour of a move to a future where seniors' care is given the same respect that all health care gets, a future where no long-term care homes are owned by private companies that put profit ahead of the well-being of our seniors.

This is an example of where we could and should take a big step in that direction.

Another factor to consider in investment review is to prevent the loss of publicly funded research and development from leaving the country, resulting in the loss of jobs and, basically, the theft of taxpayer dollars.

A company called Nemak received $3 million dollars from the government's automotive supplier innovation program. However, in 2020, Nemak closed its plant in Windsor, where those funds had been used to create new products for General Motors, and transferred that technology and those jobs to its operations in Mexico.

An NDP amendment, passed in committee, would allow for the review of a foreign takeover to consider the intellectual property whose development was funded by the federal government and to issue remedies to retain the benefits in Canada. Therefore, a situation like that of Nemak would not happen again.

I do not have time today to go over all the improvements this bill would bring to the foreign investment space in Canada or to go over all the improvements that we had hoped it would bring but fell short.

In this new world, where ideas and data are often more valuable than the natural resources we have so long relied on for our wealth, we need a new regulatory framework to protect our industries, our workers and our companies. Bill C-34 is a step in that direction.

The House resumed from October 30 consideration of Bill C-34, An Act to amend the Investment Canada Act, as reported (with amendment) from the committee, and of the motions in Group No. 1.