Industry Committee on May 21st, 2013

[Phil McColeman, Conservative, Brant, ON]

I appreciate that.

It seems to me, from a layman's language versus the various legal ways that these things are stated, that as we develop these changes and as we bring in new amendments and regulations, in many ways they are the result of trying to close loopholes, figure out ways that people are going to try to come in through the side door or some other fashion that's going to not be what was intended with the regulations in the first place.

In other words, there's this industry out there that considers how to figure out a way to get around these rules and regulations. So, we're trying to work out a system here or changes that will allow us to balance the interests of foreign investment along with the lines of protecting the many and the diverse interests of Canada. Is it fair to say that it's kind of the thrust of these changes, what we're trying to accomplish?

[Paul Halucha]

I think it's very well put.

If you look at each of the instances where there's a lack of clarity and there's discretionary power with the minister, it's to permit the minister to safeguard the interests of Canadians. That's a balance we're interested in. This is not a question of the transactions being cleared as efficiently as possible from the market perspective, but ensuring that Canadians have a system, a foreign investment regime that adequately protects their interests.

[Phil McColeman, Conservative, Brant, ON]

We've had the rules and regulations and now we're adding different dimensions to it, but over time we get this body of knowledge built where we're moving towards a better understanding of what the best scenarios would be, but we never will catch up with people or companies trying to circumvent the rules. Maybe that's asking you for an opinion and I don't mean to put you into a tough position. If it is, just say so. Is that not also the thrust of what governments do when they bring in guidelines and new regulations such as this?

[Paul Halucha]

I would agree. The changes are there to ensure that the government's policy intent as articulated in December...that the minister has the tools to ensure that the policy intent is achieved.

[Phil McColeman, Conservative, Brant, ON]

I'll use one last word in terms of this. Again, if you wish to respond, please do.

I think that one of the ultimate tools I would like to see in many more parts of the rules and regulations of governments at all levels is flexibility, flexibility to deal with especially exceptional circumstances, and flexibility to respond, in business terms, in a timely and nimble way if it means good things for Canada, if it means good things for Canadians.

[The Chair, Conservative, David Sweet]

Thank you, Mr. McColeman. That is going to have to be the final word.

[Phil McColeman, Conservative, Brant, ON]

Oh no, Mr. Chair....

[The Chair, Conservative, David Sweet]

I mentioned that I had to stay pretty tight in this to make sure that everybody gets an opportunity. I know that Mr. Regan wants that last opportunity.

[Geoff Regan, Liberal, Halifax West, NS]

Thank you very much, Mr. Chairman.

[The Chair, Conservative, David Sweet]

No, no, not yet. I'm sorry.

[Geoff Regan, Liberal, Halifax West, NS]

Not yet? I was going to finally get there. I'm working on it.

[The Chair, Conservative, David Sweet]

Mr. Harris, please.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you. I'm glad to have another round.

I just have to follow up on what Mr. Lake said. It's bizarre to me to characterize the Prime Minister and the industry minister as “commentators”. They are decision-makers: people who are supposed to be crafting the direction of government and policy.

On the case of the Investment Canada Act reviews and what happened in the past in previous Parliaments, I do believe that a study actually had been started but then got cut short when the Prime Minister broke his own fixed election date legislation to call an election in 2008.

Moving to the present, we have had in Parliament a motion that was passed by all parties to engage in a thorough study of the Investment Canada Act, as well as a motion passed by this committee itself. As the Conservatives are in the majority position, they're the ones who dictate when, where, and what we are going to study as a committee.

The fact that the Investment Canada Act, despite there being large cases with Petronas and CNOOC-Nexen next year.... This government has decided in fact to not engage in a thorough review and study of the act. Instead, all we have are two meetings to deal with rather large and substantive changes to the act.

Earlier in Mr. Regan's questions, you mentioned capital confidences and the issue of not being able to say who with or where consultations have been done. The Minister of Industry, when he was here a couple of weeks ago, spoke of round tables that have been done. How many round tables have actually been done in consultations with stakeholders in regard to these changes that have been brought forward in the budget implementation bill?

[Paul Halucha]

What the minister mentioned, I'm not sure.... I think the minister was talking about general discussions that he's had with stakeholders. I'm not aware of any specific round tables on the changes in the budget implementation bill.

I would point out the fact that the minister meets many, many representatives of industrial sectors, internationally and in Canada, and investment comes up frequently as a topic. I'm certain that he and our deputy minister would have heard, and the senior management generally hears often, the assessments of different proposed changes around the Investment Canada Act.

To the extent that almost everything that's in the budget implementation bill was signalled quite publicly by the government in December, we've had a number of months to take the pulse of Canadian industry, as it were, and internationally as well, around these changes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Were these changes signalled in the 2013 budget or the economic action plan prior to the budget implementation bill?

[Paul Halucha]

There was a page in the BIA—or, sorry, in the budget bill, the documentation I saw, there was a page that described these changes.

[Dan Harris, NDP, Scarborough Southwest, ON]

With those, are you aware of any public consultations that have happened in regard to these changes?

[Paul Halucha]

As I mentioned, we were in cabinet secrecy for a number of months undertaking the work in support of it. Therefore, consultations.... At my level, this is what I can speak to. We did not have the ability to undertake consultations.

[Dan Harris, NDP, Scarborough Southwest, ON]

I'd like to share what's left of my time with Mr. Masse, please.

[The Chair, Conservative, David Sweet]

You have 80 seconds.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

With regard to change number three and state-owned enterprises, it states there that “activity across the Canadian economy” will be scrutinized to determine the position. Can you tell me what types of activity will be scrutinized and what they'll be focusing on and looking at, and will that also include a wider global look at the state-owned enterprise's assets in activity internationally?

[Paul Halucha]

What section are you in, I'm sorry?

[Brian Masse, NDP, Windsor West, ON]

It's the third point, “the Minister of Industry declare the entity is controlled by S-O-E. These provisions support the Government' s commitment to carefully scrutinize S-O-E activity across the Canadian economy.”

What type of activity will be scrutinized by the minister, and does this exclude the global economy and the SOE's activity in the global economy?

[Paul Halucha]

I'll answer the first point.

SOE activity, basically, from an analytical perspective, as a result of the changes in the budget implementation bill, and the policy articulated in the fall, the government committed to monitor SOE activity in all sectors of the Canadian economy. We are working diligently now to undertake that analysis in support of the government. For a number of years now, there's been attention and awareness paid to whether or not it was a state-owned enterprise or a private sector company, so that type of work will continue going forward.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Halucha. That's the limit I'm able to give you. We're under quite a time pressure here.

Mr. Carmichael.