Industry Committee on Feb. 17th, 2011

[Marie-Josée Thivierge]

For the opposite situation, the laws of the other countries would apply. We have no role to play in that regard.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

A Canadian company that buys an American company will be subject to American laws and will have to deal with...

[Marie-Josée Thivierge]

...American officials.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Obviously, changes were made to the act to improve it. Do you think there are things that could have been added or incorporated to improve it more? Were some things left out?

[Marie-Josée Thivierge]

As I said earlier, the purpose of my appearance is to explain the act as it now stands in its present form.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

That's right.

[Marie-Josée Thivierge]

I'm not here to propose possible changes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

You understand that the committee's goal and the purpose of your presence here is, first, to clearly understand the act, the spirit and role of the act. However, we also need to see whether the implementation of the recent amendments meets expectations.

I have been a member of Parliament in Ottawa for about 15 months. I understand the importance of the confidentiality of a transaction between companies very well. Obviously, I'm not a stockbroker. But still, when a transaction is made, and I did that for 20 years, I bought other companies, it is essential and fundamental that the information between the companies be strictly confidential. Otherwise, it would make no sense.

We are often accused in the House of not being transparent. We saw this particularly in the case of PotashCorp. The word "transparency" is very broad. Myself, I have never understood why we were told we were not being transparent enough on the question of that specific transaction since we could not get access to the information.

In terms of transparency and confidentiality, do you think the information that the Minister may disclose under the act is sufficiently complete for the various parties around the table?

One region or another is going to be affected by a transaction. So it inevitably has an effect on individuals, on human beings. Do you think the information about the transaction itself is sufficiently general to disclose it to the public at large? I don't know whether you understand my question.

[The Chair, Conservative, David Sweet]

Madame Thivierge, be as brief as possible, please.

[Marie-Josée Thivierge]

I understand your question very well. The last time an independent committee reviewed the Canada Investment Act, certain recommendations were made to the government by that group regarding the provisions for disclosing information and offering more transparency. Some of them were proposed by the government, including starting to publish an annual report. The first annual report is being prepared. So measures were taken, after the last review of the act, to add certain provisions that offer more transparency.

[The Chair, Conservative, David Sweet]

Thank you very much.

Mr. Stoffer, for five minutes.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you, Mr. Chair.

Am I correct that you said, in answer to a question, that more than 600 reviews were done last year?

[Marie-Josée Thivierge]

No. Allow me to quote the number again.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you.

[Marie-Josée Thivierge]

In 2010 there were 16 reviews, worth, in aggregate, $16.1 billion.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

How many people on the staff actually do a review?

[Marie-Josée Thivierge]

We are a group of approximately 11 people, and we work, as provided for under the act, in consultation with other federal departments and provincial departments as applicable, depending on the specifics of the given transaction. We also call on our colleagues from the Department of Justice.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Right. Thank you for that.

I'll go back to two things. My colleague Niki Ashton raised an issue in Thompson, Manitoba, the other day of a company that purchased a smelter plant with the purpose of shutting it down. I question what economic benefit goes to Canada on that issue.

I'm just wondering; obviously, if you review a company and they have good practices and they meet all the criteria and they come in and do something like U.S. Steel does, for instance, then besides taking them to court, what other things can we do in that regard if indeed they plan to shut something down in order to withdraw some of the competition they have?

Two, 45 days doesn't seem to me to be a long time to complete a review. What is the average length of review? You said there were 16 of them. What was the average time it took?

I would go back to this question. If a company operates in certain countries of the world with very poor labour records, very poor environmental standards, very poor work standards and safety records and the whole bit, and that company comes in and wishes to invest in Canada, my fear, and my line of questioning, is that I don't think they're going to change their habits in any way. They're going to sort of downgrade the labour wages and benefits and everything else that we have here. We saw that with Vale Inco in Sudbury and everything else.

What thorough review do you good folks do to ensure that the investor or investors have clean hands and are reputable, that they have high levels of human rights and environmental and labour standards, before we allow that investment to take place--bearing in mind the net benefit test and the six factors? I don't see human rights here as part of your six factors. I don't see environmental standards as part of your standards.

This is my concern. I know that an awful lot of unions and workers are very concerned that when takeovers happen, their wages, their situations, start diminishing. I just question what benefit that is to Canada when people of that nature have to suffer those types of consequences.

I thank you.

[Marie-Josée Thivierge]

As I've indicated before, there are only six factors under the act. Those are the factors that are considered part of the review process.

That being said, on your point about non-compliance, to the extent—and I'm not talking case-specific—that an investor had a number of plans that were supplemented by undertakings and ultimately received approval to proceed with the transaction, and they then exhibit behaviour after a certain period of time while those undertakings are still valid such that they are non-compliant with one of those undertakings, sections 39 and 40 kick in.

If they exhibit a behaviour that happens to be totally outside the plans or undertakings that were part of the transaction, then the ability of the minister to trigger section 39 or section 40 might be limited. To the extent that what happens was very much goes against the plans and the undertakings that were provided to the minister, the act provides, under sections 39 and 40, for the minister to take enforcement action.

As for the average time of review, Richard, can you address that?

[Richard Saillant]

I do remember that number by heart. For 2010, the median time was 67 days. It doesn't mean--

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

So it's beyond the 45 days.

[Richard Saillant]

Yes. It doesn't mean that there aren't complex transactions that for whatever reasons expanded for much longer than that.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Stoffer. I'm sorry, but all of your time has been exhausted.

Now we're on to Mr. McTeague for five minutes.

[Dan McTeague, Liberal, Pickering—Scarborough East, ON]

I apologize for my tardiness. I didn't miss your introductory remarks. I've tried to read up a little bit.

If I could, I have a few what may be housekeeping questions to ask, without dragging this on much longer. Most importantly, I want to know the extent to which international treaties, obligations, or undertakings, impact--and how they would impact--the determination of a net benefit. For instance, if Canada concludes an agreement with Panama, would that trump, would that modify, or can that modify the minister's decision? It seems that the minister has quite a bit of latitude here. One would almost say it's bordering on arbitrary in terms of determination of net benefit.

But for the argument, is it that international obligations can indeed trump, define, or set aside the impact or the considerations, the factors, or the criteria for the net benefit test?