Industry Committee on Feb. 17th, 2011

[The Chair, Conservative, David Sweet]

Very briefly, please.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Briefly, then, I'll give you one last question having to do with the undertakings. If a company doesn't abide by the undertakings, can you think of a situation where the government has been unable to enforce the agreement?

I guess the biggest thing here is the Federal Court process, which is rather lengthy and cumbersome. Can you think of any situations where the government has tried to enforce them, but because of the situation in the courts, it hasn't been able to? I've read somewhere that a tribunal possibly would be an alternative that would work well, because it would be dedicated to such a process.

[Marie-Josée Thivierge]

I wouldn't want to speculate on--

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

In your experience, can you just say “this does work” or this doesn't work”? I'm drawing on something that I know you have--

[Marie-Josée Thivierge]

That being said—again, this is section 36 kicking in—it's very difficult for me to talk about individual transactions. You're asking if there are instances. I would say, really, that in terms of the act and how it works now, there are provisions in the act that allow for the minister to take enforcement actions. There are some guidelines that clearly articulate what investors are expected to do under the Investment Canada Act.

In terms of proposing future government policy in this area, I don't feel that this is the purpose of my presentation today.

[The Chair, Conservative, David Sweet]

Thank you, Madame Thivierge.

Mr. Braid has five minutes.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you very much, Mr. Chairman.

Thank you to our officials for being here this afternoon.

To recap or confirm, we have two scenarios where the act applies and a review takes place. One is where the book value is over a certain threshold, which currently is $312 million. The second is where there are national security concerns involved. Is that correct?

[Marie-Josée Thivierge]

That's correct.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

In a situation where there are national security concerns involved, that's a unique and independent review in and of itself, I presume. In other words, the threshold doesn't need to apply when there are security concerns. It's separate and distinct. Is that correct?

[Marie-Josée Thivierge]

The threshold does not apply under part IV.1.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay.

When reviews take place, are they reviews of transactions involving only publicly listed companies or can they be privately held companies as well?

[Marie-Josée Thivierge]

They can be both.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Very good.

Are most of the acquisitions involved in the transactions direct or indirect? What has been the experience?

[Marie-Josée Thivierge]

We have both. I don't have those numbers with me.

Richard, do you wish to add anything to that?

[Richard Saillant]

Yes.

Since the negotiation of NAFTA, I believe, indirect acquisitions by WTO members are not reviewable for likely net benefit. If they are from the investor, or if the investor is from a non-WTO country, then the indirect acquisitions are reviewable.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

Now, national security concerns are not defined in the act, as you've covered. What about the term “strategic resource”? Is that referred to in the act or is it defined? Is that an important consideration that's covered in the act?

[Marie-Josée Thivierge]

You will not find the words “strategic resource” in the act. The factors that the minister considers as part of his likely net benefit determination are listed under section 20 of the act. There are six factors that are clearly defined. They are the factors that the minister must consider when making his ultimate decision.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

I'm curious to know if you have this particular statistic. Since the act has been in force, do you know what the average length of time is that it has taken a minister to review and make a decision? On where I'm going with the question, are the timeframes sufficient? These are pretty complex transactions.

[Marie-Josée Thivierge]

Richard, do you have that information?

[Richard Saillant]

I do not have that information with me right now. We measure it by using the median time, but we do report on that. I'd be happy to send you that information.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Okay. Thank you.

[Marie-Josée Thivierge]

The act provides 45 days plus an extension of 30 days, which is within the discretion of the minister. Then it can be further extended if the investor and the minister agree, so the length of time is on a case-by-case basis.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Thank you.

I wonder if you can elaborate a little on this one point on page 9 of your deck presentation:

The Minister’s decision is an exercise of discretion and final, not subject to appeal. Process may be appealed to the Federal Court.

Can you explain that?

[Marie-Josée Thivierge]

Yes. On that one, I think I will turn to Maître Legault.

[Peter Braid, Conservative, Kitchener—Waterloo, ON]

Wonderful.