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.

The House proceeded to the consideration of Bill C-34, An Act to amend the Investment Canada Act, as reported (with amendments) from the committee.

National Security Review of Investments Modernization Act

[The Acting Speaker, 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.

Speaker's Ruling

[The Acting Speaker, 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.

Motions in Amendment

[Pablo Rodriguez, Liberal, Honoré-Mercier, QC]

moved:

Motion No. 1

That Bill C-34, in Clause 4, be amended

(a) by replacing lines 2 and 3 on page 3 with the following:

“notice for review under section 15 within 45 days after the certified date referred to in paragraph (a) or within the prescribed period,”

(b) by adding after line 16 on page 3 the following:

“(4) Paragraph 13(3)(b) of the Act is replaced by the following:

(b) in a case where the receipt contains the advice referred to in subparagraph (1)(b)(ii), no notice for review is sent to the non-Canadian pursuant to section 15 within 45 days after the certified date referred to in paragraph (1)(a) or within the prescribed period.”.

Motion No. 2

That Bill C-34, in Clause 8, be amended

(a) by replacing line 11 on page 5 with the following:

“8 Paragraphs 17(2)(b) and (c) of the Act are replaced by the”

(b) by adding after line 17 on page 5 the following:

“(c) in the case of an investment reviewable pursuant to section 15, forthwith on receipt of a notice for review referred to in subparagraph 15(1)(b)(ii) or paragraph 15(2)(d).”

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

moved:

That Bill C-34 be amended by deleting Clause 15.

[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.

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

Mr. Speaker, I listened intently to the parliamentary secretary's remarks on the Investment Canada Act changes, and I would like to ask a question. What we are debating here today is the report stage and some amendments. Conservatives have put forward a particular amendment that would restore cabinet decision-making in reviewing foreign investment. This bill would actually take that out of section 15.

I wonder whether the parliamentary secretary thinks that cabinet decision-making is of value, or whether we should just have a lot of little independent ministers who could run the roost over making individual decisions on whether an investment is good for Canada or not, without the input of their colleagues, including their colleagues from Quebec or other parts of the country?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I was not on the committee, and I suspect the member was on the committee. I understand there were a number of amendments being proposed. One of them required unanimous consent, which it did not get. That is encouraging, and hopefully we will see some amendments.

I do not know offhand whether the member is going to get the opportunity to explain his perspective on his amendment. I am not going to predetermine what the position of the government would be on it, but I can assure the member that, as a government, we are very much concerned about making sure we get this right.

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

Mr. Speaker, I am pleased to see you in the chair.

The Investment Canada Act was in need of a review, especially when one thinks of businesses in the context of COVID‑19, like our aerospace businesses. There is an issue. Are we protecting them enough? I do not think we talked enough about thresholds at committee. The government did not exactly show it was open to reviewing these thresholds.

At what point do we start an inquiry? I would like to hear what my colleague has to say. Should we have dug deeper into this to make sure we could protect our SMEs, which are the backbone of the Quebec and Canadian economy?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, like the province of Quebec, the province of Manitoba has a very healthy aerospace industry. The technology is absolutely incredible. When we start to take a look at things such as computer components and the whole area of AI, I suspect there are companies outside Canada that would dearly love to be able to get their hands on some of this information, and they may not necessarily want to keep those good-quality jobs in communities. That is one of the reasons it was important we bring forward legislation of this nature. Again, I am a bit reluctant to provide comment on the real details of it. If the member has some very specific questions, he might be best advised to check with the minister in question.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is good to see you in the chair.

I have a specific question for the parliamentary secretary. The former minister of industry, who was a Liberal, allowed the takeover of Zellers by the American conglomerate Target. Subsequently, we saw the loss of all the Zellers stores across Canada, which included union jobs and benefits, and they actually had a small profit. Target then closed all shops in Canada. Does he regret the minister's decision at that time to allow the takeover to take place?

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, the minister does have an obligation to review things.

I think back to 10 years ago, and things do change. We could ask how many dollar stores, such as Dollar Tree, were around at the turn of the century and where they are today. Even stores like Giant Tiger have popped up in more communities. I would suggest there are probably more of them than there were Zellers stores.

There is a wide spectrum of things that have to be taken into account that the government is ultimately responsible for. The biggest concern I had was when Loblaws assumed Shoppers 10 years or so ago. That was something I do not know whether I would have approved of. With respect to the Target and Zellers stores, I just do not know enough about the details. All I do know is that there seems to be a lot of retail competition, especially if we factor in the advancement of the Internet.

[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, as I indicated earlier, we recognize that foreign interference takes many different forms. One of them is through investments. I am glad that it appears, from what I can tell, the members of the Conservative Party are in fact supporting the principle of the legislation.

That being said, I anticipate that the Conservative Party would like to see this legislation pass through all readings before Christmas. Is that a fair assessment?

[An hon. member]

What year?