Fisheries Committee on June 1st, 2023

[Shendra Melia]

I'm sorry. To answer your final question about dispute settlement, yes, if an investor alleges that Canada is not in compliance with international investment obligations, almost all of our treaties allow that investor the right to pursue investor-state dispute settlement. As well, of course, the investor has the right to pursue dispute settlement in domestic courts.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you. Sometimes there's too little time, and I don't get to the other question.

[The Vice-Chair, Conservative, Mel Arnold]

Thank you, Mr. Hardie. That's two seconds, so unless you're really quick....

We'll move on to the next round now. We'll go to Mr. Bragdon for five minutes, please.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Thank you, Mr. Chair.

Thank you to the witnesses for taking the time to be here today and to share with us on this very important subject.

I have a couple of questions. I want to circle back to what my colleague was referencing a little bit ago in regard to Canada's food security and the questions that arise out of that in relation to foreign ownership and, increasingly, foreign corporations' involvement in Canadian waters.

As a result of what's happened in the last few years, we're seeing increased anxiety and the absolutely critical importance of securing our food supply chains. What steps and mechanisms would you recommend to the government in order to ensure the protection of Canada's food supply in the event of the geopolitical uncertainty going on around the globe? I'm wondering if you have specific recommendations that you would put before this committee as some practical steps that can be taken right now to help alleviate the concerns of many Canadians about their food security and the future of the fishing industry on all our coasts.

I'll start with you, Ms. Melia, and then we can go from there.

[Shendra Melia]

Unfortunately, I don't think that's a question I can answer. Perhaps my colleague from Industry Canada can answer that question. My responsibilities are related to international investment treaties. Food security is certainly not one of the issues that I would say are within my responsibilities.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Go ahead, Mr. Burns.

[James Burns]

I'm not sure you're going to like my answer either.

My responsibility is to help administer the Investment Canada Act, which governs the review of inbound foreign investments, such as investments that have already taken place or that are below a particular monetary threshold and have not triggered a net benefit review. These are the conditions precedent.

I can say that on any investment, if a foreign investor makes a significant acquisition of control, the Minister of Innovation, Science and Industry has within his authority the ability to consider a range of economic factors that touch on our food security as well as the nature of the economic activity related to a particular investment, including the effect of an investment on competition within an industry; the compatibility of an investment or an investor with our national industrial, economic and cultural policies; and the contribution of the investment to Canada's ability to compete in world markets.

If the minister is not satisfied that this investment would meet our net benefit test, then certainly the minister has within his authority the ability to block that investment. More often than not, in the engagement with investors and different parties, the minister will accept binding undertakings that would help ensure a certain level of production in Canada or keep the management team Canadian or keep the headquarters in Canada. These are some of the typical undertakings that are accepted by the minister in certain cases.

It probably doesn't answer your larger question about what recommendations we'd put forward to support food security, but certainly the protection of a marketplace in Canada is one thing that helps ensure that we have the ability to do that.

[Richard Bragdon, Conservative, Tobique—Mactaquac, NB]

Yes. Thank you, Mr. Burns, because it definitely plays a role and it is related.

Obviously I'm referencing, maybe through a layman's lens, the concerns we hear on the ground relating to ensuring a future for the Canadian fishery, owned by Canadians as much as possible, employing Canadians as much as possible, in a way that provides wonderful, safe, healthy, nutritious protein to the world's markets and benefits our own communities and also the world. I think that's a question that's on our minds.

Ms. Melia, in regard to your opening remarks, you stated, “Parties to investment treaties maintain their right to regulate domestically to achieve a legitimate policy objective, such as the protection of health, safety and the environment.” Where are these legitimate policy objectives defined? Are these policy objectives defined in Canada's trade and investment agreements?

I don't know how much time we have, Mr. Chair.

[The Vice-Chair, Conservative, Mel Arnold]

Your time is up. If we could get that in writing, that would be fine. Thank you.

We go now to Mr. Cormier, who is online.

Go ahead, please.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you, Mr. Chair.

Mr. Burns, earlier you said that transactions that are not in Canada's interest are certainly reviewed or examined. On that subject, my colleague Mr. Bragdon just asked some questions I had in mind.

In my riding, there are 15 fish processing plants. Some of them are worth several million dollars. Let's take the situation where a group of foreign investors, regardless of country of origin, would approach some of these owners and offer $25 million to buy a particular plant. If I understand what you've said correctly, the minister would have a say, so to speak, or would be made aware of this transaction and could see that everything is done in accordance with the law. Am I mistaken or is that what you just answered my colleague?

[James Burns]

Thank you very much for the question.

I would note two things. Yes, the Minister of Innovation, Science and Industry, in consultation with the Minister of Public Safety, has the ability to review any investment in Canada on grounds of national security.

The second piece I would flag for you is simply that the net benefit provisions of the Investment Canada Act kick in only in the event that an investment is above a particular monetary threshold. Therefore, an investment of around $25 million would not be subject to net benefit review in the same way that a large-scale investment that exceeded the thresholds would be subject to review.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you.

I have another quick question, and anyone can answer it.

Do the provinces have any role to play or any say in these investments or transactions?

[James Burns]

My understanding is that each province has the remit to review investments, and we consult regularly with our provincial and territorial partners. I would suggest that the provinces, territories and other partners have the ability to review and assess investments in their jurisdictions.

[Serge Cormier, Liberal, Acadie—Bathurst, NB]

Thank you, Mr. Burns.

I am going to give my remaining time to my colleague Mr. Hardie.

[The Vice-Chair, Conservative, Mel Arnold]

Okay. There are two minutes remaining.

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

Thank you. Everybody is being so generous today. That's so nice.

Mr. Burns, we've seen a number of different scenarios in which a threshold is set and then people game the system by coming in just under the threshold. In the case of what appears to be happening in Atlantic Canada with the acquisition of processors, does your department look at the cumulative investments over time to see, in fact, how much is being aggregated into one foreign investor?

[James Burns]

Our department, in the administration of the Investment Canada Act, works with a variety of different partners to gather intelligence to assess risk, and so, as you noted, investments below a particular threshold would not be subject to a net benefit review, but all would be subject to a national security review.

When you talk about cumulative investment, that is one factor that is raised in the context of a national security review, as you—

[Ken Hardie, Liberal, Fleetwood—Port Kells, BC]

We're not necessarily talking about national security here. We're really talking about scooping away social, environmental and community benefits. This isn't a threat to our sovereignty, but it is a real threat.

I'm just going to park that one with you, but I also want to hear from anybody who wants to comment on money dumping. We've seen not necessarily money laundering—although that's something this committee has looked into in this study—but literally what we would call “stupid money” coming in, which people are trying to hide from a foreign government. They come over and invest in boats, houses, airplanes, luxury cars, fishing licences and quotas, and they overpay quite significantly simply as a way of getting their money out of one country and into the relative safety of this country.

Who looks into that?

[The Vice-Chair, Conservative, Mel Arnold]

Can you provide a quick answer, or else something in writing? The time is up.

[James Burns]

Sure thing.

Under the Investment Canada Act, we review investments on a case-by-case basis. The facts of each case are assessed and carefully considered. We look at whether investments are beneficial to Canadians or whether, alternatively, they can lead to national security risks in the context of beneficial ownership.

My partners from GAC might have something to add.

[The Vice-Chair, Conservative, Mel Arnold]

We'll have to move on now to Madam Desbiens.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

Thank you, Mr. Chair.

We feel like we're always reacting late, and that concerns us. Obviously, the pandemic hit us in the face and made us realize that the sovereignty of our assets was essential for the future. Suddenly, everyone's more concerned about it.

However, the committee has already done a study, somewhat along the same lines, to establish a balance. It's okay to have foreign investment; everyone understands that. But we need to strike a balance to ensure that Canada and Quebec continue to be the first to benefit from our natural resources. In fact, I think that's what every country in the world wants. That said, the majority of countries interested in our marine potential and our seafood products are those who otherwise have no access to this resource or who over-consume it. They have headhunters and are making inroads wherever this resource is available.

Now, people are realizing that we're divesting ownership of our seafood and dispossessing the owners, these people who pass on their knowledge from generation to generation. Perhaps we don't realize that when we dispossess the main players in the fishery, those with the most knowledge, of this resource, constantly impoverishing them, emptying villages and reducing know-how, everyone comes out the loser.

Is anyone capable of sounding the alarm and making people understand that not everyone can help themselves to the buffet without worrying about what we're going to eat tomorrow? We have to save for tomorrow and the day after. That's what life is all about; everyone knows that.

Could the Department of Fisheries and Oceans and the Department of Foreign Affairs, Trade and Development work together to put a mechanism in place to make sure we secure the base? It's fundamental. In Quebec, we have a lot of expert owner-fishers. Can we find a solution? Do you think the committee can, today, find some initial solutions?

The witnesses can answer me personally.

[The Vice-Chair, Conservative, Mel Arnold]

We'll have to ask for that in writing, as you've used up more than your time allowed.

[Caroline Desbiens, Bloc, Beauport—Côte-de-Beaupré—Île d’Orléans—Charlevoix, QC]

I'm sorry, Mr. Chair, I thought I had six minutes.

Witnesses may send their response in writing to the committee.

Thank you.

[The Vice-Chair, Conservative, Mel Arnold]

We'll ask for a written response, please.

Next is Ms. Barron, for two and a half minutes.