Thank you very much.
Good morning, Mr. Chair, members of the committee.
I am pleased to appear before you today on behalf of the Canadian Bar Association in response to division 9 of part 4 of Bill C-43 amending the Investment Canada Act.
The Canadian Bar Association is an association representing 37,000 members of the legal profession. Our primary objectives include improvement in the law and in the administration of justice. It is through that lens that we have examined this portion of the bill.
The submission before you has been prepared by the Foreign Investment Review Committee of the Canadian Bar Association's competition law section. This CBA section is composed of lawyers whose practices embrace all aspects of competition law and foreign investment review including direct experiences with transactions and other investments that are subject to review under the Investment Canada Act.
In 2009 the Investment Canada Act was amended to permit the review of virtually any foreign investment into Canada on the basis that it might be injurious to Canada's national security. We have previously expressed concerns about those amendments because of their broad potential application and because of the lack of guidance as to what sorts of investments would be reviewed. Without transparency and guidance it is difficult to advise foreign investors or Canadian businesses on the likelihood of a review or the potential outcome of a review. This creates a risk of chilling foreign investment into Canada.
We're making our comments today against the backdrop of those concerns. The amendments to the Investment Canada Act that are currently proposed would primarily make two changes to the law. First, the list of investments subject to notification requirements would be expanded. That may give rise to an increased number of national security reviews. The CBA section believes it would be helpful for the government to provide an explanation as to why these changes are thought necessary or desirable.
Second, the government would have greater discretion to disclose publicly information about the status and outcome of a national security review unless the Minister of Industry is satisfied that communication or disclosure of that information would be prejudicial either to the foreign investor or the Canadian business.
We fully support efforts to increase transparency and welcome this proposed amendment. However, we think the legislation would benefit from a specific qualification that no disclosure about the national security review process should be made in the context of a specific investment when the fact of that investment has not been publicly disclosed by the parties. Such unwanted disclosure could have the effect of deterring investors from approaching Industry Canada to address national security issues proactively and confidentially, thereby weakening the effectiveness of the process.
We also believe that the government should provide more disclosure about the frequency of national security reviews and the outcomes of those reviews. This would provide the Canadian public, the business community, and investors with better information about how the broad powers to conduct national security reviews are being exercised. In particular it would be helpful for foreign investors and Canadian businesses to have basic information about reviews in general. For example, how many reviews have there been since 2009? What were the countries of origin of the foreign investors? What business segments do the Canadian businesses operate? How many investments have been blocked? How many have been conditionally approved? We don't have access to any of that information. Industry Canada could make this information available in its annual report similar to what the committee on foreign investment in the United States does in that country.
In our view providing aggregate data on national security reviews would not itself be prejudicial to national security. We would encourage the minister to include such information in his annual report. We hope that the government would continue its efforts to increase transparency by considering amending the ICA and, further, require the annual reports to include aggregated data on national security reviews.
Thank you for your attention. I would be pleased to answer any questions later this morning.