Industry Committee on June 6th, 2017

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

You want your cake and to eat it too.

[James Hinton]

You can have the royalties from the Chinese company and also have a licence for Canadian companies to have the freedom to operate under that patent: two licences, one for just freedom to operate and the other one for the Chinese company to—

[The Chair, Liberal, Dan Ruimy]

Thank you.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

I have one last quick question.

Would it be feasible to say that whatever we find, you can licence anywhere in the world, but a Canadian company has the rights to it too? Can we do a carve-out? Would that work?

[James Hinton]

Yes, exactly. That's the collective concept that we've put forward, so in part.

[The Chair, Liberal, Dan Ruimy]

Thank you.

On that note, I want to thank our guests for being here today in person and over the WWW. It's much appreciated.

We're going to suspend for a couple of minutes and then come back and go on to some other business.

Again, thank you very much.

[The Chair, Liberal, Dan Ruimy]

We're going to get started again, please. Thank you, everybody.

The last time we spoke, we said that if we had time, we would go through some motions. Just to give you an update, there were four motions in all. Two have not been read in public and two have. One has been moved.

Mr. Lobb's motion on Retirement Concepts has been moved, so it's up to you if you want to bring that up. Alex's has been read in public as well, on the innovation leaders. Those two have been read in public—one has been moved—and the other two have not. I will open up the floor to anybody who wants to do something.

I don't see any hands.

[Majid Jowhari, Liberal, Richmond Hill, ON]

Are we talking about the first, Alex's?

[The Chair, Liberal, Dan Ruimy]

Right now the floor is open if you have something to say.

Ben, go ahead.

[Ben Lobb, Conservative, Huron—Bruce, ON]

This motion goes back to February 28, and it deals with a review of the acquisition of Retirement Concepts, to make sure the committee felt it satisfied the Investment Canada Act threshold. When the minister was here for the main estimates, he provided a poor answer to my question, in my estimation. That's backed up by the fact that there's zero information on Industry Canada's website with regard to the acquisition.

This committee is supposed to be one of the main areas where we're able to make sure that the minister is doing things correctly, and the public servants who work under him were satisfied with their work. Nobody's questioning their work here, but the fact remains that the only ability we have as a committee to verify on behalf of Canadian taxpayers that this was a good purchase, and it was a good purchase by a company that has no state resources—which is a bit of a stretch, in my opinion—is to take the minister's word for it in a one-minute answer. The answer was a bit confrontational, probably both ways. The fact that there is zero information on the Internet and zero ability to question anybody who works at Industry Canada, I think it really behooves this committee to do the work that's required.

Again, this would be only two meetings. I think that's what we had discussed before. There can be more to get an idea of what took place here. This will be the first of many. I think we should go ahead with this. I'd be interested to hear what the Liberals' perspective is on this. I think we should move forward on this motion.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Lloyd.

[Lloyd Longfield, Liberal, Guelph, ON]

I think the answer was short because it was a fairly straightforward concept. If the application hadn't passed the threshold, it wouldn't have been allowed. It passed the threshold, ergo it was allowed.

To get into the guts of an Industry Canada commercial evaluation, I don't think is the role of the committee.

[The Chair, Liberal, Dan Ruimy]

Okay.

Brian.

[Brian Masse, NDP, Windsor West, ON]

Mr. Chair, I think it is the role of the committee because the Investment Canada Act falls within our purview, I first raised non-democratic governments having the ability to purchase Canadian companies. That was done through the sale of Petro Canada when the Chinese government was purchasing Canadian shares in Canadian oil companies. Ironically, it wasn't seen as proper for Canadians to own their own oil in this country. China Minmetals Corporation was the catalyst for a review of that. This committee played a role in that. That's why part of the Investment Canada Act has that qualification under national security interests.

I think a meeting on this is fine. It's appropriate. Certain things can or can't be disclosed. The threshold has been dropped over the years as well. This committee has studied the Investment Canada Act several times.

It does lead to further discussion on whether we need to review it. The last time there was any discussion was during a omnibus budget bill, so if you go back to this committee's role in the past, not only was it raised under the Investment Canada Act, but later on when the Investment Canada Act was worked on, it was done as separate legislation.

In subsequent governments, both Liberals and Conservatives had the Investment Canada Act as part of their budget bills, so this committee has not vetted it since it was altered. I would be interested in a meeting on this just to find out how much more that process played itself out. I think that's our role as committee members, because the act has been changed a number of times without the committee hearing from any witnesses. It's like a review process. I don't see anything nefarious. It would be a good probe for us to find out whether there is an interest to look at the Investment Canada Act, given the threshold has dropped, the national security....

We have other issues too, and I'll summarize. An example would be private equity firms. We don't know who owns or has invested in them. They could be kingdoms. They could be other types of investors. We have no idea who's buying Canadian companies.

We have questions about some Montreal companies that have been bought. We have a series of things. This one stands out because it's gone through this current process, and I think it would be worth at least dipping our toes into it to find out how things are going by the way the act was changed, and it was changed without this committee's review. It was changed in a budget bill, so we don't know the mechanisms, and whether they're working or not.

I think those are the facts. I'd like to see if it's working for Canadians. It would be rather interesting because this committee...and I'm not trying to be overly political on this, but it's practically a reality. When we go to omnibus bills that include other legislation, it takes away the committee review and the full independence of the review of that issue. It takes away from business and public representation, from all those who would provide testimony and come back to us, as they would on any other bill. The repercussions are all that goes to Finance.

Inadvertently, we have ceded ground to the finance committee that does a pretty cursory flyover of issues in a bill, as opposed to doing the good scrutiny of legislation that committees used to do.

For that reason, it's worth at least a meeting to look at this, and I would move the motion at the appropriate time to have a vote on it. Let's be done with it. We won't be able to get to certain things because agreements have to be signed. That's the law, and that's fine, but at least we'll get enough information to know whether we need to do more work or no work.

[The Chair, Liberal, Dan Ruimy]

Thank you.

Lloyd.

[Lloyd Longfield, Liberal, Guelph, ON]

I'm not intending to go back and forth myself. I wanted to lay on the table that if there was a role for the committee, it would be looking at the Investment Canada Act, but not auditing the process that's being used by Industry Canada.

[The Chair, Liberal, Dan Ruimy]

Okay. Thank you.

Frank.

[Frank Baylis, Liberal, Pierrefonds—Dollard, QC]

Lloyd just touched on it. I think it's even what Brian's saying.

The concern I have with this particular motion is it's targeting one company. What we're talking about, Brian, is we should be looking at the process, and you mentioned the same thing. My concern would not be a specific Chinese company. There's an unfair trading advantage here. They can buy 100% of our company; we cannot buy 100% of their company. I'm quite concerned about our getting into a trade agreement that says we can buy 49% of a Chinese company; we cannot own 51% of a Chinese company, but they can come in and buy any company of ours.

I'm not interested in this particular motion because it's just looking at one company, but I would agree with Lloyd and Brian, if we wanted to take a look at the unfair trade practices with China right now. If I want to go to the United Kingdom, I can buy 100% of a United Kingdom company, and they can buy 100% of our company. We may or may not like it, but we're on a fair playing field. That's not the case here. If I want to set up a manufacturing plant in China, I cannot own it 100%. I think they're going to change that for manufacturing only—I think there's talk—but if I want to own a service company or anything else, they'd block it. That discussion is something I'd be open to.

[The Chair, Liberal, Dan Ruimy]

Before we move to Mr. Dreeshen, let me say that I want to keep us focused on the actual motion. There are two conversations going on here. One is trying to come up with another motion. That is not what's on the table. What's on the table right now is Ben's motion, and we should try to speak to that motion.

Earl.

[Earl Dreeshen, Conservative, Red Deer—Mountain View, AB]

Mr. Chair, I think a lot of good discussion is taking place on this, and it all started and stems from the fact that questions had been asked and answers weren't being received. This was a major public concern in the discussions that took place, and it was as though the government had no intention of being forthcoming with the discussions.

We understand the concept of secrecy and that type of thing and we've been engaged in it as well, but we've also seen situations in which companies have been refused because of the structure of the government investment from outside countries.

I think it's important, if we go back to what the motion says—that's what we're talking about, making sure that we're staying on task here: looking at the review of the Retirement Concepts acquisition by Anbang Insurance—that this was in the public realm for quite some time. No one seemed to be getting the answers they required, and this is at least one of the reasons we're talking about it today.

We also talked about the Investment Canada Act threshold. When we're looking at it and are trying to make comparisons, I think to talk about the two together becomes useful.

We have to recognize what is going to take place, because industry is going to have a role. When we deal with TPP it's going to have a role, and a continuous role as we're dealing with CETA, and of course it's going to have a role when we're taking a look at NAFTA. All of these things we have to be aware of, and if the Investment Canada Act is something in which people don't have the confidence they require, I think this would be a great way to flesh it out with something that people actually understand, because of the concern that was presented earlier on.

[The Chair, Liberal, Dan Ruimy]

Brian.

[Brian Masse, NDP, Windsor West, ON]

I think I may have a compromise amendment that might get to...and I'll ask that you see whether they'll review this.

I get what everybody is saying here. There are good points on all sides, but I would suggest that, for example....

I'll read it and I'll read it again a next time, just so that you get the idea. I struck out the middle part of the amendment and put “that the committee consider undertaking a review of the Investment Canada Act, including a departmental public briefing and reply from the minister”.

Let me speak to the reason. I'll be very quick in speaking to it. It is that then we actually get a review of the overall thing—and there are a couple of others that I wouldn't mind getting getting a little more information on—and then we get a reply from the minister to the committee, and then we all get a good update, with just a couple of meetings to start with, on whether or not there is more work to be done. We get all of those things accomplished together. It takes a couple of meetings, and then the committee at that time can decide where to go from there.

In this way there is no singling out, such as the Liberals are concerned about. The Conservatives have a particular one here, and I have that one, but also there are a couple of others, the telco sector, and so forth, that are leading to other stuff.

Again, I think we get a good public briefing from the departmental side and from there we see whether the minister is available to go from there. I think that would wrap things up nicely, and then we will be able to decide whether there is further interest.

I'd ask that this be treated as friendly, and if we're good with that, I'm ready to move the motion with the amendment when appropriate.

[The Chair, Liberal, Dan Ruimy]

Could you repeat the amendment, please?

[Brian Masse, NDP, Windsor West, ON]

We would strike out from the word “the”, so that the motion would read, “That the Committee consider undertaking a review of the” and we strike out from “recent” to “the”. We go all the way down, get rid of “recent acquisition of Retirement Concepts by Anbang Insurance and be satisfied that the acquisition met”, and then we put “Investment Canada Act”. Then we strike out “threshold” and then have “including a departmental briefing and reply from the minister.”

Again, it reads, “That the Committee consider undertaking a review of the Investment Canada Act, including a departmental public briefing and reply from the minister.”

We don't even have to have “public”. It can say, “a departmental public briefing and reply from the minister”.

There's at least a couple of days of meetings there.

[The Chair, Liberal, Dan Ruimy]

Ben, you're up.