Evidence of meeting #18 for Canada-China Relations in the 44th Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was investment.
A video is available from Parliament.
Full Professor, Université de Sherbrooke, As an Individual
By targeting Hong Kong and Taiwan, the Chinese regime is mostly showing a sign of weakness. It looks like it wants to find external enemies to justify what's going wrong internally. It closed cities during the COVID‑19 pandemic, locking people up for months without any resources. This has created discontent. The middle class is losing its shirt in real estate, there have been problems in agriculture, and unemployment is coming. The Chinese haven't experienced this in a long time, but unemployment is coming back.
I am convinced that the regime is weaker than it appears. It adopts a rhetoric that it is strong and good, but, indeed, it can experience some instability. I don't think the Chinese are really going to invade Taiwan, especially not [Technical difficulty—Editor]. However, they will certainly indulge in displays of force.
Liberal
The Chair Liberal Ken Hardie
Thank you very much.
Now we will go to Ms. McPherson for the remainder of our time.
NDP
Heather McPherson NDP Edmonton Strathcona, AB
Thank you very much, Mr. Chair, and again, thank you to both of our witnesses.
I have to say that I'm not feeling terribly reassured. The testimony we have received today has certainly opened up more questions for me than answers. I recognize that you have said Canada is naive and is perhaps late to the table. Many countries are.
One thing you said, Mr. Payette, that really struck me was, “if you lose, you lose”—ho-hum. Unfortunately these are investors who are using other people's money, so there are some challenges to that as well.
Could both of you very quickly comment on that? Knowing that is the case, what federal role is there in warning investors and making sure investors understand the risks? What federal role is there in making sure that investors are being held responsible for the particular, perhaps too risky, decisions they make with regard to China?
Mr. Arès, why don't you start us off?
Liberal
The Chair Liberal Ken Hardie
I think we've just lost him. Oh, there he is again.
Mr. Arès, do you want to take the question?
Full Professor, Université de Sherbrooke, As an Individual
I just heard every other word, so I would ask that you repeat what you said.
NDP
Heather McPherson NDP Edmonton Strathcona, AB
Frankly, I'm not sure I could.
I'll let Mr. Payette answer, and then we can provide some clarity from that answer.
Chief Executive Officer, Cercius Group Ltd.
I will answer in French.
It's pretty complicated to hedge your bets on this kind of thing. Investment funds sometimes go through third parties. So how can you really know what you're investing in, ultimately? That's one of the critical questions: how do you know, ultimately, if the fund has invested in another fund that has invested in a third party, and so on? There is always a game of subsidiaries that gets complicated. It's something that's very difficult to know.
If it's done directly, it's much easier. In this regard, again, Canada could learn from the Trump experience. I'm not talking about the man here, I'm talking about what he did and what he forced the U.S. to do, which was to develop a list of sectors to watch and companies, including their subsidiaries if they had them, not to invest in. A lot more measures have been put in place. It's not necessarily enough, but it's a very good start in terms of identifying what we don't want. So Canada should already start doing that groundwork to establish what it does or does not want to do.
Next, we need to remember the importance of due diligence. In our experience, many companies make investments, but only come to us after something has happened to them. They ask us for information and we tell them yes, but it's too late because they've already done something. They need to ask for this information before they act. They could have known not to do what they did, but they should have asked first. I can't tell you the number of companies that got caught for investing in this or that.
Liberal
The Chair Liberal Ken Hardie
All right. With that, I think we'll bring the panel to a close.
We appreciate the time, Dr. Payette and Dr. Arès, that you've given us this evening. We appreciate very much your testimony. You're now released to get on with the rest of your evening while we will take a quick break and go in camera. We'll suspend.
[Proceedings continue in camera]
