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.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Thank you so much.

My colleagues tell me that I should be asking this question of Mr. Krishnamurthy. I apologize. I missed the opening statements. I was debating Bill C-34 in the House of Commons.

Would you like to comment, sir?

National Security Review of Investments Modernization Act

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Mr. Speaker, today we are talking about Bill C-34 and the final amendments to it. I want to outline briefly, as many others have done, but with my own spin, details on the context of Bill C-34.

We have to look at the economy as it is today, both in Canada and around the world. Twenty or 30 years ago, or even a decade ago, the economy was much different than it is today, both in Canada and around the world. Economies were winning in the 1950s and 1960s if they had a manufacturing base. That was the primary driver of the economy. It was the new economy of the day, as we moved from an agriculture economy to a manufacturing economy.

This has radically changed in the last decade. We have moved to an economy that is largely based on intellectual property. Knowledge is truly power in today's economy. It will determine who are the winners and the losers in the future economic growth of the world.

The 1950s, the 1960s and even the 1970s were characterized by a Cold War, both economically and geopolitically. On the one hand, the Soviet Union was advocating for a centrally planned economy ruled by an authoritarian regime, and on the other hand, the other power, the United States of America, called for a free market system, a system that empowered people around the world to hit their maximum. Our economies and frameworks were built around that.

The challenge today for Canada is that too often our legislation, our frameworks and even our mindsets in certain instances are still back in the sixties, seventies and eighties. We need to adopt a framework. I am pleased the government put Bill C-34 forward, but in some ways it is the exception that proves the rule. When we look at major pieces of legislation, the major frameworks required, unfortunately Canada is falling further and further behind.

If we look at the Income Tax Act, nearly every other OECD country has had a major reform to its taxation regime in the last 40 years. Canada has not. The last time Canada had a major income tax reform was back in the 1970s when the capital gains tax was brought forward. We are not modernizing. We are not keeping up with the rest of the world.

Even Bill C-34 is a dollar short and a day late in many instances, because in some cases the horses are already out of the barn. We have talked about a number of examples, including the lithium mine, which was just rubber-stamped by the government. We have had examples of predatory state-run companies that have walked into our market, purchased our goods and left, with us smiling all along the way. As Canadians, we have to not be afraid to stand up for the Canadian economy and for our fellow Canadians.

We have precious resources, and when I say “resources”, I am sure many members' minds go to our natural resources, which are critical. However, we have a resource that is far more valuable than lithium, gold, platinum or other natural resources we might have. We have the intelligence and ideas of our young and our workers across this country from coast to coast. Right now, we do not have an effective regime to allow those people to be successful here in Canada. We see far too often that our best and brightest, instead of growing great Canadian companies, are taking their ideas abroad, often to the United States of America but also to Europe and other countries, where they are given the opportunity to fully promote and exploit their ideas. We are lacking the intellectual property framework that allows Canadians to be successful.

In Canada, from coast to coast to coast, including in the great province of Quebec, we have some of the best ideas in the world. The difficulty is the transition of those ideas into a commercially viable product. We have resources, which might be gold, lithium or the ideas generated by the great Canadian workforce, and those ideas and resources are among the best in the world and are incredibly valuable. However, what happens far too often in Canada is that we just let them go away, whether it is a lithium mine being sold to state-owned enterprises or our ideas.

Instead of grounding those works in a framework where those individuals can make the most of them, people feel that they cannot make the most of them in Canada because we do not have intellectual property. There are ideas like patent boxes and other tax reform ideas that could have been implemented yesterday. They are not partisan ideas. They have appeared in both Liberal and Conservative, and maybe even Bloc Québécois, platforms, and they just make sense, but we need to get a move on. We need to modernize, but unfortunately the government is slow to act. Even Bill C-34 is very modest and moderate movement. It was with the pushing of some great Conservative members on the committee that we were able to be a bit more aggressive, such as by reducing the cut-off for a national review from $512 million to zero. We have to look at the world not as it was, but as it is.

Another key element that has changed since the 1950s, 1960s and 1970s is that then, we had the Soviet Union. It had state-run enterprises, but for the most part they simply did not engage in trade with the west. The need to protect our local economies and our national economies from the Soviet Union was limited, because it really did not trade with us very often. That is completely different from, diametrically opposed to, what the People's Republic of China, the regime in Beijing, is accomplishing. It is engaged in trade throughout the world and with Canada, and aggressively so. We have to acknowledge that, and the bill starts to do so, which is good. It is very different, when we have a company coming to our shores to invest and do business, if it is a privately owned company really motivated by one thing, as most companies are: profit. That is not a bad thing in my opinion. The NDP might disagree.

There are other companies that are state-owned enterprises. Their goals and targets are often much more obscure and vague. They are sometimes looking to promote an authoritarian regime within our own country, to have power and to take charge within our economy. We have to acknowledge the reality of state-owned enterprises and the differences and challenges they pose for our economy. While Bill C-34 is a step along the way, we still see a number of challenges going forward with respect to protecting our national security.

Canadians cannot be afraid. We are good people. We are nice, polite people, and there is no doubt about that. Even the member for Kingston and the Islands is. I will throw that in there, as a good, polite Canadian. We cannot be afraid to put our elbows up a bit in a respectful way to protect our economy and our national interests. We simply can no longer allow our ideas, which I believe are the most valuable resource we have, or our natural resources to simply flutter away. What happens is that those natural resources and ideas get combined outside our shores into commercially viable products, and we end up paying billions of dollars that could have been Canadian. That is a huge issue for us because we are lacking productivity in our country.

We have the lowest per capita GDP since the 1930s, and productivity is based on a three-legged stool. One leg is technology. We talked about the issues with that. We have to look at ideas such as patent boxes and putting in frameworks to protect our intellectual property. The second leg is capital. We need to be able to attract and invest capital. The third leg is people, and like I said, we need to make sure we keep those great young minds from coast to coast to coast right here in Canada, so they can contribute and build our country into the great country it should be.

With that, I look forward to the members' questions and comments.

[Chandra Arya, Liberal, Nepean, ON]

Mr. Speaker, I rise today to speak on Bill C-34, an act to modernize the national security provisions of the Investment Canada Act. We have been clear that we will always welcome foreign investments and trade that encourages economic growth, innovation and employment opportunities in Canada.

At the same time, we know that economic security is national security. That is why this bill, which will amend the Investment Canada Act, would bring forward improvements so our government can act more quickly when required. This legislation would represent the most significant update of the ICA since 2009 and would ensure that we could address changing threats that can arise from foreign investment. While our government continues to welcome foreign direct investment, we are modernizing the ICA framework to ensure Canada’s continued prosperity while acting decisively when investments threaten our national security.

Let me first appreciate the fundamental importance of foreign investments to our economy. Canada has a long history of welcoming foreign capital, businesses and expertise, and this openness has played a pivotal role in shaping our nation's growth. Foreign investments are a driving force behind economic development in Canada. They fuel innovation, stimulate job creation and enhance our global competitiveness. Foreign direct investment has enabled us to harness the expertise and resources of international partners, thereby propelling our own industries forward.

These investments result in the creation of well-paying jobs for Canadians and help diversify our economic landscape. Moreover, they facilitate the transfer of knowledge and best practices, fostering innovation and productivity enhancements. While the economic benefits of foreign investment are undeniable, we must not overlook the critical dimensions of national security. Protecting our sovereignty, infrastructure and sensitive data is paramount. National security is not a matter of choice. It is an unwavering obligation of the government to safeguard the interests and well-being of its citizens.

Over the years, the interconnectedness of our world has increased exponentially. Technology and the flow of capital have become global, creating unprecedented opportunities but also potential vulnerabilities. We cannot afford to be complacent when it comes to the protection of our national interests. While our commitment to an open and welcoming environment for foreign investors remains steadfast, it must coexist with a thorough evaluation of the national security implications that each investment brings with it.

As I said earlier, we welcome foreign investments and trade that encourages economic growth, innovation and employment opportunities in Canada. At the same time, we know that economic security is national security.

In my speech during second reading, I had mentioned the importance of economic security. I would like to touch on that again. The importance of economic security in the context of foreign direct investments cannot be overstated. In the pursuit of economic growth, it is essential that we safeguard against any potential threats to our long-term economic security.

The economic security part primarily concerns the stability and growth of our economy, while the national security part pertains to safeguarding our sovereignty and protection from external threats. Foreign direct investment is a powerful tool for economic growth, but it must be leveraged in a way that ensures that all sectors of our economy continue to thrive.

The steel and aluminum industries in Canada, which are 100% foreign-owned, serve as a compelling example of how a failure to address economic security can potentially result in stagnation and even decline. These industries, dominated by foreign ownership, have seen little to no growth in production capacity over the past two decades.

While the rest of the world is expanding its aluminum and steel sectors, Canada's lack of growth and diversification in these areas has hindered our ability to tap into new markets and fully leverage our numerous free trade agreements. In fact, there are hardly any exports from the Canadian steel and aluminum industries outside of North America, even though we have signed 15 free trade agreements with 51 different countries that cover 61% of global GDP.

There is a need for a comprehensive approach to foreign investment that addresses not only national security but also the economic well-being of our nation. We must find a balance that encourages investment while ensuring that the growth and diversification of our economic sectors continue to contribute to our long-term economic security.

To strike a balance between these economic requirements and national security requirements, we have adopted a comprehensive and multi-dimensional approach to foreign investments. The approach is rooted in a principled and fact-based assessment of each investment proposal. The key elements of our approach include legislation and regulations, a national security review process, risk assessment, proportionate responses, consultation and transparency.

There are certain principles that guide our approach to foreign investments and national security. The first is sovereignty and security. Canada's sovereignty and national security are not negotiable. The government is committed to safeguarding the country's interests and ensuring that foreign investments do not compromise its security.

The second is openness and partnership. Canada remains open to foreign investments that enhance economic growth and job opportunities. We value international partnerships and the mutual benefits they bring.

The third is transparency and accountability. Our approach is characterized by transparency, accountability and due process. Decisions are made based on facts, expert advice and consultation with relevant parties.

The fourth is proportional response. The response to national security risks is proportionate to the level of risk identified. This ensures that legitimate and beneficial investments are not unfairly restricted.

The fifth is continual adaptation. Our approach is not static. It evolves to address new and emerging challenges. The government remains committed to staying ahead of evolving threats and opportunities.

With this act, we are highlighting that Canada's approach to foreign investments strikes a delicate balance between economic growth and national security. We remain committed to welcoming foreign capital and expertise that contribute to our prosperity, innovation and employment opportunities. However, this commitment is tempered by an unwavering dedication to safeguarding our sovereignty and national security.

The Investment Canada Act, the national security review process and the guiding principles that underlie our approach provide a robust framework to evaluate foreign investments. Through consultation, transparency and a proportional response to identified risks, we ensure that legitimate investments are not discouraged and national security is upheld.

In this era of interconnectedness, Canada's approach is not a mere policy. It is a reflection of our values, our commitment to our citizens and our vision for a prosperous and secure future. We embrace the world while safeguarding our national interests, and in doing so, we strengthen the very foundations of our great nation.

The ICA provides for both the net benefit and national security reviews of foreign investments into Canada. It was established to provide investor certainty while reserving Canada's ability to block individual investments under specific circumstances. The act is designed to encourage investment, economic growth and employment, only interceding when an investment is not of net benefit to Canada or would harm national security.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

Mr. Speaker, Bill C-34, otherwise known as the national security review of investments modernization act, seeks to update and strengthen the Investment Canada Act with the aim of protecting Canada's national security when it comes to foreign investments in our country.

As tensions rise around the world, Canadians, our businesses, our intellectual property, our private data and our natural resources must be protected from bad actors who seek to undermine our sovereignty and exert influence on our institutions and way of life in Canada. For eight years, the NDP-Liberal government has not taken sensitive transactions seriously and has failed to conduct full reviews of transactions involving Chinese state-owned enterprises, which has seriously jeopardized the security of Canadians and our government.

According to Statistics Canada, China's share of Canadian assets under foreign control doubled from 1.9% to 3.8% between 2015 and 2019. Large shares of key industries are also under foreign control, including 40% of all assets in Canada's oil and gas industry, 48% of wholesale trade, 44% of manufacturing, 30% of mining and quarrying and 25% of professional, scientific and technical services. With so much of Canada's economy controlled by foreign companies and governments, it is crucial that we ensure foreign investments do not pose a threat to our national security and prevent bad actors from weaponizing Canada's economy and our own resources against us.

Let us take a look at some recent examples of investments the government missed.

One example is the Neo Lithium Corp. and Zijin Mining. In March 2021, the minister of industry updated and enhanced guidelines for transactions involving critical minerals and state-owned enterprises. Just 10 months later, the minister ignored those new guidelines, allowing a Canadian mining company, Neo Lithium Corp., to be acquired by Zijin Mining, a Chinese state-owned enterprise, without a security review.

Another example is Sinclair Technologies and Hytera Communications. In December 2022, the RCMP awarded a contract to supply sensitive hardware for its communications systems to Sinclair Technologies, which is directly linked to Hytera Communications, a company partially owned by the Chinese government and a major supplier of China's public security ministry. It was revealed in December 2022 that the CBSA used Hytera's technology and communications equipment in 2017. Hytera has been charged with 21 counts of espionage in the U.S. and banned from doing business in that country. In 2017, when Hytera acquired B.C.-based telecommunications company Norsat International, the parent company of Sinclair Technologies, the minister of industry failed to request a full national security review.

Conservatives have long called on the current government to take swift action to ensure that, any time a foreign state-owned enterprise seeks to invest in a Canadian corporation or asset, the government conducts a thorough review. At second reading of this bill, Conservatives voted to advance the proposed legislation to the industry committee, upon which I sit, with the clear expectation that significant amendments would be made. At industry committee, Conservatives tabled a number of amendments to ensure these reviews would take place and to strengthen this legislation as a whole.

Some of the amendments tabled by my colleagues and me at industry were adopted. However, many more were voted down by the government.

We wanted to modify the definition of “state-owned enterprises” to include any company or entity headquartered in an authoritarian state. We wanted to list specific sectors necessary to preserve Canada's national security rather than the systematic approach applied or recommended by public servants. We wanted to exempt non-Canadian Five Eyes intelligence state-owned enterprises from the national security review process, to prevent an overly broad review process for an ally such as the United States or Australia. We wanted to allow the Government of Canada to maintain ownership of intangible assets that have been developed, in whole or in part, by taxpayer-funded dollars. The committee members rejected those things.

We wanted to allow the minister to go back and review past state-owned acquisitions through the national security review process, allowing for a flexible review process. They rejected that ministerial power.

We know that public servants do take a risk-adverse approach in crafting regulations and providing advice during the legislative process. That is not necessarily a bad thing. That is a good thing. However, politicians must be willing to make the tough decisions, weighing the potential benefits against the repercussions of any decision.

Going back to that first rejected amendment, Conservatives moved to include companies headquartered in an authoritarian state in the definition of state-owned enterprises to ensure that they are automatically subject to security reviews. We just want to protect our sovereignty.

Public servants warned against calling out certain nations like this, as it could conflict with WTO obligations. However, when we look at the 2019 annual report from the national security committee of Parliament, NSICOP, it highlighted activities carried out by the People's Republic of China in Canada, stating, “they are a clear threat to the security of Canada.” The report also stated that “foreign interference represents a significant threat to Canada's society and fundamental institutions.”

The government's own Indo-Pacific strategy reads:

China has benefitted from the rules-based international order to grow and prosper, but it is now actively seeking to reinterpret these rules to gain greater advantage. China’s assertive pursuit of its economic and security interests, advancement of unilateral claims, foreign interference and increasingly coercive treatment of other countries and economies have significant implications in the region, in Canada and around the world.

Despite all that, the Liberals and the Bloc members voted down our amendment. Frankly, it is not surprising, given how long this government has ignored the 2019 NSICOP report, which called for a foreign agent registry, and given the fact that our Prime Minister has said that he admires the basic dictatorship of China.

The question I want the government members to answer is this: Do they really believe that, without the amendments we put forward in good faith, which they rejected, this bill is as strong as it could be to protect Canadian assets, companies and, most importantly, our sovereignty? I do not believe they can answer with a yes.

Thankfully, a few of our common-sense Conservative amendments were passed.

Number one was to reduce the threshold to trigger a national security review from $512 million to zero for any investment by a state-owned enterprise. I think if there is one thing to note from the work the Conservative Party did it would be our standing up for Canadian sovereignty by changing this fundamental aspect of the Investment Canada Act. Moving forward, when this is passed, when China is looking strategically to take an asset in Canada, say mining rights or a small mine that would fall under the threshold, which I believe this year is at $512 million, that strategic move to try to make its way into the Canadian economy would be subject to a security review. That would be thanks to the hard work of the Conservative members.

Number two was to ensure that items reviewable under the national security review process would include acquisitions of any assets by state-owned enterprises. Number three was to work to ensure that an automatic national security review would be conducted whenever a company had previously been convicted of corruption charges. Number four would require the minister to conduct a national security review by changing “may” to “shall” to ensure a review is triggered whenever it is in the review threshold.

That brings us to today. Conservatives have brought forward a common-sense amendment here at report stage that would protect the system of checks and balances in place on the minister's power to undertake, or not undertake, a national security review. Our amendment would remove clause 15 of Bill C-34, which would revert the language back to the existing text in the Investment Canada Act. This would ensure that cabinet continues to play an active role in ensuring regional representation and in making major decisions about foreign investment in our country.

In conclusion, I understand what the Liberals are trying to do here by streamlining decisions through the minister of industry and the minister of public safety, but we must ensure that regional representation plays a role in national security reviews moving forward.

[Ryan Turnbull, Liberal, Parliamentary Secretary to the Minister of Innovation]

Mr. Speaker, I am thankful for the opportunity to speak to Bill C-34, an act to amend the Investment Canada Act.

Today the House of Commons will vote unanimously to support this bill's objectives. This bill was studied at the Standing Committee on Industry and Technology, and we encourage those members to send this bill to the Senate for its consideration.

Members all know very well this legislation plays an important role in our economy and that it helps in making Canada a destination of choice for foreign investments. This legislation will ensure there are favourable conditions for a trade based on a stable regime and clear regulation.

This legislation encourages economic growth and employment. The legislation allows for a government intervention only if an investment would harm Canada’s national security. Bill C-34 allows the government to act rapidly if the circumstances require it, and this is exactly what we intend to do with these proposed amendments.

In fact, it is clear the time has come to modernize the ICA and ensure Canada is aligned with the rest of the world. Our industry remains one of the most dynamic in the world, but as members all know, Canada is facing unprecedented geostrategic challenges and national security issues.

Canada’s foreign investment regime must adapt to the speed of innovation. In recent years, intangible assets in the knowledge economy, like intellectual property and data, have grown in importance in defining Canada’s economic strength and at the same time pose new challenges in terms of how these are to be managed to ensure the benefits accrue to Canada and Canadians.

Our government recognizes the value of the intangible economy, its growth and the relevant opportunities for all Canadians. These new innovations are driving new ways of doing business and with huge opportunities for Canadians. Our government will support this growth as it helps drive Canada’s economy and supports highly skilled, well-paying jobs.

To do so, tools such as the ICA must also be modernized to offer additional protections considering changing geopolitical and technological advancements, and to prevent hostile actors from exploiting Canada’s expertise and capacity for innovation.

Geopolitical risks and instability are now fixtures in our operating environment. Hostile state and non-state actors pursue deliberate strategies to acquire goods, technologies and intellectual property. They do so in ways that are fundamentally incompatible with Canada’s interests and principles. We also know that foreign investments can be used as a conduit for foreign influence activities that seek to weaken our norms and institutions. The nexus between technology and national security is clear and here to stay.

Rapid technological innovation has provided Canada with new opportunities for economic growth, but it has also given rise to new and difficult policy challenges. More and more, Canada is the target of hostile threats. This threatens both our national security and our prosperity simultaneously. That is why our government must adapt our tools to better defend ourselves against current and future threats.

All over the world, foreign investments have been the subject of many investigations, with a specific focus on national security. These investigations focused on several angles, such as the impact of the COVID-19 pandemic, the security implications of climate change, disruptions to global supply chains and shifting geopolitical considerations. Hence, by amending this legislation to stop the threats of tomorrow, Canada will remain a destination of choice for foreign investments.

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

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

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

The ICA already gives us much of the authority we need to intercede and address national security risk that can arise from foreign investment. These amendments build on the solid foundation and will improve the mechanics around the national security review of investments.

Now is the time to act decisively so we can make sure that Canada will continue to gain the economic benefits of investments while strengthening our ability to address threats to our country and ensure its future prosperity. It is clear to everyone that the proposed amendments in Bill C-34 would ensure an important equilibrium. They would protect Canadians and Canadian enterprises while making sure that investors will continue to view Canada as their first destination of choice.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I am pleased to speak to Bill C-34, as well as to the amendments being proposed today, amendments that are actually pretty important to consider. I will be considering them, as will the NDP.

The amendments pertain to the independence of the minister, in particular where the minister could have ultimate authority with less cabinet oversight. As industry critic for about 17 of my 21 years here, I can think of some deals that were not even looked at by certain ministers. I am not sure whether this would solve it, because I know they actually brought some of these things to the cabinet table in successive Conservative and Liberal governments and they were allowed to be taken over.

The reason I asked my previous question about natural resources, and I want to touch a little on that, is that the companies in the mining industry that are now owned by foreign conglomerates used to be Canadian champions. Now, the battery supply and different minerals necessary for electrification of vehicles in our corner of the world are very much affected by that. It is the same with the independence. What is also important and has not been taken much into account by either of these two parties in the last number of years is the number of tax subsidies, reductions and investments that those companies have gotten from Liberals and Conservatives that let them actually go out the door.

I want to talk about a more recent case, and then I want to get to natural resources. The most recent one is Nemak in Windsor, which is the Mexican-based company that got a series of investments. It was bought out, previous to that. It got a series of subsidies from the federal and provincial governments of the day, a federal Liberal government and a provincial Conservative government. There were no conditions on the investment of those subsidies. They went towards a new transmission update, a new motor update and other types of innovation. They then took that and put it in Mexico, and closed the Windsor plant down. We had to fight to get the workers' wages back. Our bankruptcy and solvency laws are actually very much against workers right now. We lost this opportunity, but we funded the loss of our opportunity after we let the company be taken over.

The reason I talk a little about the auto sector is that we had to have some foresight. Successive Conservative and Liberal governments have never had that. Some Canadians might remember Inco, Alcan, Falconbridge and Stelco. They are all gone. All were Canadian giants in natural resources, and the industry is now owned by Vale, Rio Tinto, Xstrata, and U. S. Steel. Some have even changed since then. All were foreign interventions in the Canadian system of natural resources.

Who owns the natural resources? We do, as Canadians. It is a privilege to be able to mine those resources. We are the ones who actually have the asset. It is no different actually from the spectrum that we have for our telecommunications industry, where successive Conservative and Liberal governments have taken in $21 billion from taxpayers and allowed companies like Shaw, Telus, Bell and others to charge some of the highest rates. From the year 2000 to this past year, we actually took in, under successive Conservative and Liberal government, $21 billion in spectrum auction of the airwaves above us that Canadians own. Then we let them charge us some of the highest prices in the world, with some of the worst practices.

That is important, because natural resources are at a premium now, especially when we are looking at lithium ion and different types of minerals related to the new economy and the emerging auto industry in electrification. It actually goes further than that. There was a big loss with respect to getting the next chips and innovation related to the electronics industry. The shortages were high. The U.S. is spending billions of dollars in investment. In microchips, we were actually a leader at one time, in Mississauga. We let that be bought out, closed down and shipped over to Taiwan. All of it was approved under Liberal and Conservative governments in the past, after policies of reducing corporate taxes and giving subsidies with no conditions and terms. Companies were bought up, closed down and, with less competition, moved out of the country.

Finally, and I have raised this in the past, when China Minmetals was on the lookout to buy Canadian natural resources in the oil patch, what is interesting about that is at that time, back in, I think, 2004, there was no national security review screening, and that was okay, if members can believe it. Paul Martin was the finance minister at the time, and he later became Prime Minister. It was okay with the Conservatives and Liberals for China's national industries to own Canadian natural resources, but it was not okay for Canadians to own Petro-Canada, so we sold off our shares in Petro-Canada. We took a bath on it because six months later, the prices skyrocketed, at a time when it was okay for China to invest. All the records are here. All the documents are here. At the same time, we could not have a national champion like Petro-Canada, heaven forbid, but at the same time we brought in investments from China. Now the Liberals are talking about concerns and reservations, but we do not have those resources under control anymore.

We are looking at the same thing with competition right now. If we look at the frustrations in the grocery industry and all the different consumer industries, they are of concern. There is a pattern here. All these industries I have talked about had to be approved by the minister and cabinet, so I am empathetic to the Conservatives' amendment here for a cabinet review, but when we have a party that is destined ideologically to sell off Canada, it does not matter if it is one person or 12 in the room making the decision to sell off those jobs and those investments. That is the problem.

When we look at some of the most historic ones, such as Lowe's buying Rona, how well did that work out? Now it is going back to the Rona brand, because people trusted it because it was a Canadian company. What did we do? We allowed Lowe's and basically Home Depot to be the competitors, and we eliminated the Canadian competitor by allowing it to be bought up. What Rona got as a condition and term was a supposed corporate office, I cannot remember if it was going to be in Quebec City or Montreal, but in one of those two places. We know that was a facade.

At the same time, we saw it in the retail sector, which is just as important, with electronics. We used to have Future Shop. It is gone. Now we have Best Buy, and that is it. It only had a limited market to begin with, but on top of that, Best Buy said it would sell off the Canadian component as well so that it would have no competition. If we wonder why we have less competition, it is because ministers and multiple cabinets are ideologically driven, not from a business sense, by competition or all the other things that are important to the consumer society. The United States has laws preventing that from happening. What we have are ideologically driven governments that want to sell off Canada and say it is okay because that is the way of doing business. However, it is not the way of doing business anywhere else but Canada. The United States has anti-competitive laws for those things that break up companies like Microsoft and others when they have gone too far. We do not have any of that stuff here.

There are so many cases it is unbelievable, but another one I want to note is Zellers and Target. It is one of the most eye-popping ones. During the retail market struggles when companies were losing money, Zellers was still making a profit, even with a union that provided benefits for its employees. What did we do? We opened the floodgates. We let Target come right in and take over Zellers and close some of them down. A few months after that, Target realized that maybe it was not so hot for the Canadian market, and after about a year it ended up closing those stores. The workers were gone. The pensions were gone. The benefits were gone. The stores were gone. Zellers is trying to make a return now, but what does it matter when we had a minister, cabinet ministers and parties in power who were ideologically driven to basically give Canada and the investments away?

It is not the same free market as in the United States. I live close to the U.S., and I know it has much stronger laws that protect consumers than in Canada. It is about time we got them here.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I would like to take this opportunity to share with my colleagues some of the other ideas that emerged during the work of the Standing Committee on Industry and Technology. One of the most important changes for which the Bloc Québécois vigorously advocated involves transparency provisions.

I know how important transparency is to you, Mr. Speaker. We could have included other provisions, but I sense that you are particularly attentive to transparency. It is an important concern that witnesses have mentioned, and it has been reflected in the technical documents that have been presented to us.

I stressed the need for greater transparency in the national security decision-making mechanisms. I went to the right school, some might say, and I think I have colleagues who have influenced me, in particular the member for Joliette, whom I would like to recognize.

This includes more information from agencies responsible for decisions related to national security. It is a legitimate request to want to understand how the decisions are made and what criteria are taken into account.

The minister's obligation to publicly present his or her decisions is significant progress in fostering public understanding. This will allow citizens, businesses and stakeholders to better understand the process and the motivations underlying national security decisions.

We remain firmly committed to acting in the best interest of the Quebec nation, ensuring that our national interests are preserved in harmony with our democratic values and our quest for an open and transparent governance.

We think it is a shame that the government restricted and limited the amendments to Bill C‑34 to the single issue of national security related to foreign investments.

I think there was some consensus around the table with respect to the fact that the government missed an opportunity to review the thresholds for mergers and acquisitions, especially when it comes to guaranteeing that the foreign investments have a net benefit for Canada.

We therefore support this bill and will continue to demand loud and clear that the government introduce a new bill to also review the other sections of the Investment Canada Act.

That said, it was high time to address national security issues related to foreign investment.

The House resumed 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.

Business of the House

[Karina Gould, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, I do not want to commit to setting anything in stone, but I will commit to it being very likely that this will indeed be the calendar for next week.

This afternoon, we will continue report stage debate of Bill C-34 concerning the Canada Investment Act. Tomorrow, we will begin second reading of Bill C-52, the air transportation accountability act. On Monday and Wednesday, we will return to debate on Bill C-34.

Next Tuesday and Thursday shall be allotted days. I know that is what the member is particularly interested in. I am sure it is the best part of his week; I am not sure it is the best part of my week.

I would also like to inform the House that the Minister of Veterans Affairs will be delivering a ministerial statement on Thursday, November 2 to acknowledge the beginning of Veterans' Week.

Motions in Amendment

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I would like to begin by telling the interpreters that I will not try to fit my speech into the six minutes, although I think I could. The fact that I will not have to take questions immediately afterwards may save me from getting a question like the one my colleague from Windsor West asked. I will prepare accordingly.

I rise today to speak to Bill C‑34, which has just passed an important milestone. I understand that my colleagues have identified other amendments at this stage, and I will inform the House of the Bloc Québécois's position in due course.

This bill represents the first substantial review of the Investment Canada Act since 2009, when the government introduced a mechanism for assessing the national security implications of foreign investments. Essentially, it aims to strengthen the government's powers to monitor foreign investments that could compromise Canada's national security

Bill C‑34 introduces seven major changes: a new requirement to provide notice of certain investments prior to their implementation in designated sectors; ministerial authorization to extend national security reviews of investments; harsher penalties for contraventions; ministerial authorization to impose conditions prior to the national security review period; ministerial authorization to allow undertakings that mitigate national security risks; improved information disclosure with international counterparts; and new rules to protect information in the course of judicial reviews.

These undeniably necessary changes reflect the logical evolution of an increasingly interconnected world. Foreign investment plays a vital role in economic development, not only in Canada, but also, and especially, in Quebec.

Over the past few months, the members of the Standing Committee on Industry and Technology examined several important issues related to these foreign investments. We held no less than 12 meetings, during which we heard from nearly 20 witnesses. Their testimony informed our debates and contributed to our collective understanding. We heard valid concerns about the potential vulnerability of our businesses and our sovereignty to ill-intentioned foreign investments. This strengthened our conviction that Bill C‑34 is an important first step.

When it came time to consider each member's amendments, we each addressed aspects that seemed important to us. I was particularly anxious to ensure that Quebec's economy would not be hurt. I thought about several situations where investments shaped Quebec. I wish the federal government had done some thinking as well, in response to the recommendations of the Bélanger-Campeau commission, and that it had opened up certain sections of the act to make amendments to better protect Quebec's leading companies.

The Conservatives tried to make changes that probably would have had disastrous consequences for Quebec's aerospace industry. They suggested drastically limiting the ability of foreign state-owned enterprises to invest in critical sectors and authorizing such operations only with the members of the anglophone Five Eyes, meaning the United States, Canada, Great Britain, Australia and New Zealand.

Let us look at the practical consequences of the Conservatives' proposal. Take, for example, the takeover of Bombardier's C Series by Airbus. That transaction, which was completed successfully, is critical to our aerospace cluster. Airbus is a company owned by the French and German governments, which are neither American nor anglophone. If amendments CPC-5 and CPC-6 had been in effect at the time, that transaction would have been prohibited, which would have had disastrous consequences for our aerospace sector. That is what the Conservatives' aerospace policies are like at times.

I appreciated the government's openness to considering clarifying that purchasing a company's assets is the same as purchasing the company itself, and so the transaction is subject to the act. This clarification was necessary, especially when it comes to intangible assets such as intellectual property patents, where there was a gap in the previous legislation. It is crucial that our laws protect the national interest, including intellectual property.

On some amendments, our position was more nuanced. I supported the idea of taking intellectual property into account during reviews of transactions, because it enhances our national security and protects our strategic assets.

However, we must keep in mind that Bill C‑34 seeks mainly to align our security policies with those of the United States, an essential prerequisite for Canada to be included in the U.S. industrial modernization strategy, in particular the development of electrification.

The proof is that, immediately after Bill C-34 was introduced, the Americans lifted the most protectionist measures through the Inflation Reduction Act, which Joe Biden announced just before his visit to Ottawa.

Restrictions remain in future incentives for the purchase of electric vehicles, but these provisions will only come into effect later, when current investments have increased the supply of cars enough to meet demand. There is every indication that they will harmonize this with the industrial component.

As a result, Canada's agreements with the U.S. include specific provisions on personal information in the defence sector, allowing Canadian companies to bid on Pentagon contracts for the first time since 1956. Since these contracts give access to U.S. defence secrets, the U.S. government asks for information on our companies' personnel in order to conduct security checks. We have to be careful not to lose this privilege.

I would like to take this opportunity to inform the House that other ideas emerged during our work on the Standing Committee on Industry and Technology.

I will continue my speech after question period.

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

Mr. Speaker, one of the acquisitions that I wish had been reviewed, which I do not think Bill C-34, even with amendments, would catch, was Paper Excellence buying up the pulp and paper mills of this country: all of Catalyst, all of Resolute and, in the member's home province, starting with Northern Pulp. It looks like it was all financed by the China Development Bank. What does the member think about that?

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

Mr. Speaker, today, we are debating Bill 34, an act to amend the Investment Canada Act, at report stage. We are dealing with a new amendment to this bill from the Conservative side of the House, as well as some housekeeping amendments from the government side.

To make sure everybody watching understands what the Investment Canada Act is about, it deals with the acquisition of Canadian companies by foreign entities: companies and governments that come to Canada to try to acquire our businesses. There is a government process, through Investment Canada, that these entities need to go through with the Minister of Innovation, Science and Industry and cabinet. Through the bill before us, cabinet would be removed from the process. I will speak to this in a moment.

Wayne Gretzky, whom I know everybody here admires, said, “You miss 100% of the shots you don't take”, and this bill fits that description. While it would make administrative amendments and speed up the process a little, it missed the opportunity to look at what is happening in the Canadian economy and deal with the increasing acquisitions of assets and businesses of various sizes, from small businesses worth a few million dollars up to minerals rights and large corporations, by states that are hostile to us. As has been said before, it has been 14 years since the act was amended. A lot has changed in the world, in particular around the way that state-owned enterprises have become extraterritorial in taking over companies around the world for their own economic interests. The Conservatives' challenge with the bill is that it thinks small. It did not use this opportunity to take a shot on net and score a goal by recognizing the change in the global economy and what is happening with the outright sales of Canadian businesses and assets to hostile states.

The minister is the minister of broken bills, which is why we are having to make more amendments to this one. On his other bill, Bill C-27, after a year and a half, he has had to make amendments. Perhaps if he had spent more time here in Canada understanding what was going on, he might have produced better legislation. The Liberals missed the chance to think big and understand what is going on in our economy. What is going on in our economy is what I call the Chinese government cold war. We are in a new cold war. It is not one of bombs and the military in that sense; it is the silent takeover of the economic assets of other countries. This is how China is gaining influence all around the world. We all know about the election interference issues, but those things are perhaps a little more obvious than this is to Canadians, this creeping strategic control by the Communist Party of China of Canada's assets and those of other countries. Other countries have put mechanisms in place within their investment acts to recognize this and prevent it. The bill, as it was introduced in the House and debated at second reading, did not contain any of that.

Small businesses in my riding, such as lobster buyers, are $2-million businesses being bought for $10 million by China. The Chinese government owns a number of lobster businesses in my riding. It is how it is getting control of our seafood assets behind the door. It is doing the same in agriculture. It is buying land and farms in western Canada and mineral rights in our land. It is buying more obvious things, which I will speak to. It is buying companies like the only producing lithium mine in Canada. Therefore, Bill 34 missed a lot and would just make small administrative changes.

The Communist Party of China cold war's being ignored in Canada might be out of incompetence, but it also could be the case, as we know, that the Prime Minister believes that China is his most admired country, so maybe it is more strategic. Let us take a look at the Liberal government's record on this issue.

In 2017, the Liberal government allowed a telecom company from B.C. called Norsat to be acquired by a company called Hytera, which is Chinese-based. Hytera does not make any money. 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, but only eight months later, the RCMP in Canada, shockingly, bought telecommunications equipment from Hytera to put in its communications system. When I asked the RCMP, at the industry committee, because it was in all the newspapers, whether its members were aware that eight months before, Hytera had done this and been banned in the U.S., the RCMP, shockingly, said no.

I referred earlier to the Tanco mine, our only producing lithium mine, which was bought by the Sinomine Resource Group, a Chinese-owned mining company. Every ounce of that lithium in our critical minerals industry goes to China.

The record on this is very awkward for the government to hear, but it is a growing concern. It did not take those things into consideration in drafting the bill before us, As a responsible opposition to His Majesty, the Conservatives proposed a number of amendments in committee, and thanks to the support of the other two opposition parties amidst the objections of the Liberals, we made some significant amendments. Those amendments include that with any state-owned enterprise from a country that does not have a bilateral trade relationship with Canada, the threshold for review by the Government of Canada would now be zero dollars. Any transaction over zero dollars would be reviewed, compared to the threshold now, which is $512 million. China is buying a lot of assets for under $512 million, and the threshold would now be zero. The same would apply for a new concept we added, which is that all asset sales would need to be included in that test with a state-owned enterprise.

Today, we are also taking this one step further by saying that the minister has made yet another error. That error was trying to consolidate all his power and ignore his cabinet colleagues. The bill would change the Investment Canada Act process that requires that at the beginning, when an acquisition is made, the minister take his recommendation on how far to go with a national security and net benefit review into a study. The bill before us says that he would not have to do that anymore and that he could decide on his own, that at the end of the process, whatever the results are, he would come back and say he will decide whether or not he goes to cabinet with the results.

Removing cabinet from the decision-making process would mean that we would not get the breadth of experience of people around the cabinet table and that we also would not get the breadth of experience from regional perspectives. For example, there have been companies bought in Quebec. If an industry minister is from Ontario and our public safety minister is from out west, they would make the decision on their own without any input from Quebec. I suspect that the Bloc Québécois would be opposed to that issue and would want to see Quebec representation in those decision-making processes, but the bill before us has the potential to eliminate that part of it.

We are proposing common sense Conservative amendments, as we did in committee. Thankfully we upped the ante of the bill and made it more than an administrative bill such that it would deal with the serious international challenges we had, through the four amendments that were accepted. By the way, there are two national tests in there. One is on national security and the other is on the net benefit to Canada. Conservatives in committee added a third: if a company has been convicted of bribery or corruption, the minister would now have to take that into consideration in deciding whether to approve the acquisition. It would add much benefit, but, for some reason, Liberals did not think it was worthy when they voted against it.

We believe that Conservatives have improved the bill dramatically. We are trying to improve it again in the spirit of good public policy for Canada and protecting our economy against hostile interests, which the Liberals seem not to care about. I urge the House, including all members from the Bloc Québécois, the NDP and the government, to recognize that cabinet's decision-making process is essential to getting the full breadth of things, and I urge members to vote for our amendment.

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

Mr. Speaker, we are debating Bill C-34. We were supposed to be debating it a few hours ago, but instead the Conservatives, in their reckless wisdom, thought it would be better to amplify their party's position on the Canada infrastructure bank, which, as I pointed out in my debate, is totally and absolutely bizarre.

Before I go on to the actual debate on the amendments, I have an observation and a plea for my Conservative friends.

Canadians were disappointed when the Conservatives flip-flopped on the price on pollution, a fairly significant flip-flop. I would encourage them to do another flip-flop on the Canada Infrastructure Bank. Canadians would benefit immensely if they were to do that, so I highly recommend that.

I am glad that we are finally on this debate. It is important to recognize that the last time the Investment Canada was amended was maybe 12 or 14 years ago, I believe. A great deal has taken place since then.

We can talk about things such as foreign interference. Foreign interference takes place in many different ways. One of those ways is through investments, significant investments.

When we think of investments, we have to think of it in two ways. There are those who will invest in Canada to get a rate of return. They are not necessarily a majority; they are not taking ownership, if I can put it that way.

Then there are investments in which ownership has taken over. I think most Canadians, including myself, have a great deal of concern when that takes place. Whether we are debating the amendments or the legislation itself, we have to be very careful to recognize that we are debating ways in which we can modernize the Investment Canada Act.

I want to focus on technological changes, such as the development of AI and the impact that this has on society.

We have incredible companies throughout the country. We have endless minerals and potential for development and extraction. Many minerals that are in exceptionally high demand can be found in Canada. We have companies that are leading the world in certain sectors, such as anything related to companies that are technologically advanced, AI being one of those.

As a government, we have been putting a great deal of focus on green jobs, recognizing the not millions, not even billions but close to a trillion dollars of investment around the world. We have to be very much aware of that. We have to realize that Canada has a role to play. We need to be in a position to protect our industries, the AI and the technological advancements that are taking place today. That is why we have things such as copyrights and patents.

We do not want a company from abroad coming into Canada, buying something and then taking it out of Canada. Canada loses out because of that leading technology that was part of a company.

This is why it is important we see this legislation pass. It would modernize the Investment Canada Act.

Let us think of this with respect to national security reviews, how we look at certain aspects of industries, anything from military weapons development to Internet or artificial intelligence being developed in Canada, to see if it is in Canada's best interest. It is not in Canada's best interest to accept all international investments coming into our country.

At times, as a government, we want to be in a position to put in some constraints, take specific actions that will protect Canadian industries and Canadians as a whole. It also ensures the type of growth we want to promote and encourage in certain sectors. In fact, we often provide incentives for those industries.

Canada, through the many trade agreements we have signed off on in the last number of years, has created opportunities, not only for investment outside of Canada but also for investment to come into the country. Canada, as a result of our many trade agreements and our reputation around the world, is a great place to invest.

Billions of dollars every year enter our country for a multitude of reasons. Let there be no doubt that a lot of it is because of Canada's reputation in the world as being a safe place to invest. At the end of the day, it's those and other investments that we have to be aware of with respect to how they impact Canadian jobs, not only for today, those good, hard-working middle class-type jobs, to ensure we protect them well into the future.

This legislation would empower the minister and different areas of the department to do just that. It would provide a higher sense of security and ensure that the best interests of Canadians are better served. That is what I like about the legislation, and it is very timely. As we continue to grow in commerce throughout the world, we have to ensure we have the regulations and laws in place to protect the population from a wide spectrum of things that could come about.

I look to my colleagues across. Instead of filibustering the legislation by doing what they did earlier, we could have been debating this. I could have been giving this speech over three hours ago. It would have been nice to have seen this legislation possibly pass before question period, as we are at report stage; it still has to go through third reading. We know that is not going to happen now because they were successful with their three-hour filibuster. However, they were the ones who made with that decision.

I hope members across the way will see the value of the legislation for what it is. It is about ensuring that Canada is well positioned, from a worldwide perspective, on investments, so we are able to better create and promote industries in Canada, thereby keeping the jobs we have and growing our economy well into the future by providing well-quality jobs for our middle class.

Speaker's Ruling

[The Acting Speaker, Conservative, John Nater]

There are three motions in amendment standing on the Notice Paper for report stage of Bill C-34. Motions Nos. 1 to 3 will be grouped for debate and voted upon according to the voting pattern available at the table.

I will now put Motions Nos. 1 to 3 to the House.

National Security Review of Investments Modernization Act

[The Acting Speaker, Conservative, John Nater]

I wish to inform the House that, due to an administrative error, there is a portion of text missing in the printed version of the Notice Paper for report stage of Motion No. 1 in relation to Bill C-34, an act to amend the Investment Canada Act.

The missing text should appear at the beginning of part (b) of the motion. The text appears correctly in the electronic version, which is published on our website. A corrected printed version of the Order Paper and Notice Paper is available at the table.

I regret any inconvenience this may have caused hon. members.