The act has a dual purpose. First, it encourages investment in Canada, which in turn promotes economic growth and job creation. Second, it seeks to protect national security. This is a more recent development.
It's important to note that the act can only achieve its first objective if the rules remain unchanged. If the act is amended every time there is a recession or pandemic—situations that can be considered temporary—things get a lot more complicated, given the uncertainty facing foreign investors and local businesses that might want to potentially attract Canadian or foreign investment.
If the rules of the game are constantly changing, do we not risk missing out on potential investors and undermining competitiveness? Doing so might not only hurt economic growth and job creation, but also devalue our businesses. When there are fewer buyers and investors in Canada, then there is less capital, which could then drive down the value of Canadian companies.
And so, we need to be very careful not to amend an act every time a temporary situation arises. In theory, the act should be able to address these changes on a case-by-case basis. That is the first point I wished to raise.
My second point has to do with the definition of a “strategic Canadian industry”, as it appears in the statement. We have to ask ourselves what a strategic industry actually is. Is it an industry that is essential to the health of the economy and society as a whole?
Mr. Burton raised issues related to competition and issues related to democracy, for example. What is essential? The problem is that every person can have their definition of what is essential.
In coastal regions, be it the Atlantic or the Pacific coast, the fishing industry is probably considered essential. And yet, that doesn't mean that it is essential to the health of the Canadian economy as a whole or to society. People in Toronto can just as easily eat Maine lobster rather than lobster from Nova Scotia or the Magdalen Islands, even if the latter are better than those from Maine.
The same can be said of the mining industry in Quebec, the oil and gas industry in Alberta or the forestry industry in British Columbia. Are these industries essential to the health of the Canadian economy? From a regional perspective, the answer is yes. From a business perspective, they're indeed essential. From a job creation standpoint, they're essential. And yet, if that's true, could it not be argued that the value of what is deemed essential is diminished?
Who decides which industries are essential and which are not? Will that be up to individual MPs, or rather public servants? Who will be in a position to assess the differences between industries? What criteria will we use? The list of strategic Canadian industries could end up being quite long, since everyone will want their industry to be deemed strategic.
In Quebec, hardware stores suddenly became a strategic industry for the Quebec economy when it was announced that Rona would be sold to Lowe's. In France, for example, the yoghurt industry is a strategic industry. The French government indicated that it could not allow Danone to be sold.
Industries that, at first glance, don't appear to be entirely strategic from an economic standpoint can quickly become strategic for political reasons. It could then be argued that if every industry becomes strategic, then no industry is actually strategic.
We have to wonder whether it's worth having a list of so-called strategic industries. This could have some repercussions, in that each potential transaction would have to be reviewed. Is it necessary to set thresholds for a strategic industry? This could be a very cumbersome process.
The act, as it stands, sets out an approach for thresholds: regular thresholds; thresholds for state-owned enterprises; or cases in which thresholds do not apply, for example when national security is involved. In my opinion, the act, as it stands, is sufficient to deal with so-called strategic industries. National security is what is strategic. We're not talking about job creation or economic growth, because that would raise the notion of net benefit, which the minister will of course have to define for any acquisition.
In conclusion, I'd like to touch on acquisitions by state-owned enterprises of authoritarian countries. Again, what is the objective here? Mr. Burton spoke about reciprocity. That could be an objective, but I think it comes back to national security.
What's the difference between a state-owned enterprise and a private enterprise? Is it a matter of economic performance? In most cases, studies show that there is not really much difference in performance or operations when comparing a private enterprise and a state-owned enterprise. If it's not a matter of national security, is there a difference between a state-owned enterprise of an authoritarian country or a democratic country? Again, I think that the act, as it stands, is sufficient and simply needs some guidelines for enforcement.
Thank you for your time, and I'm happy to take your questions.