Evidence of meeting #70 for Industry, Science and Technology in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was changes.
A recording is available from Parliament.
May 21st, 2013 / 4:10 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
If a small Canadian investor is looking at investing in a company that, as far as he or she can tell, appears to be Canadian, how are they going to know whether or not it's likely that the minister or the department, at some point either before or after a sale, will determine then that in fact it is not effectively Canadian-controlled?
4:10 p.m.
Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
Did you say a Canadian investor?
4:10 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
An investor here in Canada, a person with his RRSP or whatever, wants to invest in a company and invests and suddenly finds out that the minister says it's not Canadian. “Well, I didn't know that.” Now the idea the person has perhaps that it might be sold to foreign investors or whatever suddenly is a problem. Doesn't that create uncertainty?
How is an investor going to know what the heck is going to go on, and isn't it the case, according to the Canadian Bar Association, that it may even happen after the fact? According to the provisions of Bill C-60, it looks like this declaration could be made at any time. There is no requirement for the minister to do this in advance of a takeover. He can do it afterwards and nullify it. When investors are trying to decide what they should invest in and are looking for companies that will potentially have some gain, maybe because they'll be sold in some cases, how are they going to know?
4:10 p.m.
Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
They won't know. A Canadian investor will not know specifically.
Matt, do you want to jump in?
4:10 p.m.
Acting Director, Investment, Insolvency, Competition and Corporate Policy, Department of Industry
Yes, sure.
Your question is, how will a small Canadian investor buying shares on the TSX, for example, in a Canadian company know whether that Canadian company is Canadian or not? Is that the question you're asking?
4:10 p.m.
Acting Director, Investment, Insolvency, Competition and Corporate Policy, Department of Industry
Then the response here would be that they may not know. They may not know until later, but whether this is the way it is or not in the act, they wouldn't know either. The only way there is a potential loss is if there was an attempted takeover of that Canadian company by a foreign state-owned—
4:10 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
The first question to begin with was whether or not you have control of that, this part where it can well be under the threshold, the investor looks at it and says he knows it's majority Canadian-owned, so what does he have to worry about?
Well, now they don't know. They don't know what they're getting into.
4:10 p.m.
Acting Director, Investment, Insolvency, Competition and Corporate Policy, Department of Industry
How would that impact their investment? I'm sorry—
4:10 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
The whole problem here is when you have investors who are looking at making investments, whether that be in the oil and gas sector or whatever, the more certainty there is, the more likely.... There is enough uncertainty as it is and there's a lot of risk in Canada. Investors obviously look to avoid or minimize their uncertainty.
It seems to me what's happening here is we're creating more uncertainty.
4:10 p.m.
Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
Well, the uncertainty would exist in the other direction as well. If a Canadian made an investment in what he or she believes is a Canadian-owned and operated company, and, in fact, it turns out that through a de facto control test the company is not owned and controlled, then it's not the minister who has led to the circumstances; all the minister has done is uncovered circumstances which existed.
4:10 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
But if the result is that it can't be sold, then the investor is the one who loses out.
4:15 p.m.
Acting Director, Investment, Insolvency, Competition and Corporate Policy, Department of Industry
There's no limitation on a Canadian company that's not a Canadian company being sold.
4:15 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
I'd refer you to the arguments from the Canadian Bar Association because they seem to be very concerned about not only the Canadian entities and the control, in fact, but also subsidiaries of a company that suddenly it turns out, supposedly, isn't Canadian anymore because the minister has decided, “Hey, I don't think it's really Canadian”. There's no way for the investor to know that.
Let me ask you, can you provide the committee with a complete list of everyone who was consulted by the government, and when they were consulted, prior to proposing these changes to the Investment Canada Act ?
4:15 p.m.
Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
Certainly, we could put together that list.
4:15 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
Did Industry Canada receive instructions from the Privy Council Office or the Prime Minister's Office with respect to these amendments to the Investment Canada Act? If so, could you provide the committee with those documents?
4:15 p.m.
Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
Is that a question? For the policy review process, we did work, obviously, with our minister's office in terms of developing these policy amendments. In terms of the Privy Council Office and the Prime Minister's Office, we had no direct interaction.
4:15 p.m.
Liberal
Geoff Regan Liberal Halifax West, NS
Who made the decision that these amendments would be part of Bill C-60 instead of being introduced as a stand-alone bill which, of course, would have ensured that Parliament and this committee would have a chance to actually have the proper time to hear from expert witnesses, analyze this, consider amendments, and give serious consideration of the impact of these changes?
4:15 p.m.
Director General, Marketplace Framework Policy Branch, Strategic Policy Sector, Department of Industry
I don't know who made the ultimate decision on it.
4:15 p.m.
Conservative
James Bezan Conservative Selkirk—Interlake, MB
On a point of order, Mr. Chair, I believe O'Brien and Bosc is quite clear on page 1058, in chapter 20, talking about the need for witnesses who are employees of the department to be careful in how they're asked questions and how they respond to questions. Often committees usually excuse witnesses from making comments as it entails their personal relationship or the relationship between the department and their ministers.
I think that the line of questioning by Mr. Regan is out of order and we need at least to provide the witnesses a chance to recuse themselves from actually replying to any comments that may jeopardize or compromise their relationship with the minister.
4:15 p.m.
Conservative
The Chair Conservative David Sweet
Mr. Bezan, I don't know if I can specifically direct the wording for Mr. Regan, but I do hope that the witnesses know that at any time, if they feel that they're going to compromise their position, they can recuse themselves from answering, or, of course, if it's some aspect of policy, they're aware of their appropriate responsibilities in that regard as well.
Mr. Harris, is it on the same point?
4:15 p.m.
NDP
Dan Harris NDP Scarborough Southwest, ON
I was going to ask Mr. Bezan if maybe he could clarify exactly which part of the question he thought was stepping over the line.
4:15 p.m.
Conservative
James Bezan Conservative Selkirk—Interlake, MB
Mr. Regan had asked at what point in time who made the decision to include this in Bill C-60. I think that compromises the position of our witnesses in trying to answer a question that is beyond their mandate in providing testimony here today.
4:15 p.m.
Conservative