Industry Committee on June 18th, 2020

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Thank you for that.

Mr. Balsillie was here the other day in front of this committee. He's the chair of the Council of Canadian Innovators. He's advocating for adjustments to the Investment Canada Act to keep pace with Canada's digital economy. He talked about IP leakage. I have a quote from him that I just want to read to you, and I want to know if you agree with that. I'm going to put the same question to the two CBA lawyers as well.

This is what Mr. Balsillie said:

[T]he act is based on the premise that, with FDI, the direction of the flow of knowledge and technology is into Canada. This used to be the case with FDI into industrial production. It is not the case with FDI into the innovation economy where FDI is extractive.

Do you agree with that?

[Prof. Gordon Houlden]

Fundamentally, I would. Intellectual property and knowledge are flowing in both directions. China is producing five times as many STEM graduates as the United States right now. We need to tap into that. But in looking at individual deals, we need to make sure that we're not allowing what is our still pretty small pools of innovation, compared to China or the United States, to just evaporate or disappear.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Could I put the same question to you, Mr. Kilby?

[Michael Kilby]

I think certainly the Investment Canada Act is one important tool in the tool box in that regard, in particular in terms of its national security provisions. As we've heard, they're very broad in scope. They can be used at the unfettered discretion of the government to prevent transactions that it views as problematic from a national security perspective.

I would add, though, that there are other tools in the tool box too, perhaps more precise or surgical tools, including things like the export control list, the controlled goods regulations and other statutory instruments. We know a lot about the Investment Canada Act. It's very well known. It meets the headlines. But there are other tools that can be used as well to control technology transfer and who is entitled to own, transfer or possess goods and technology in Canada.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Good, thank you.

Ms. Salzberger, do you have any comments on that?

[Debbie Salzberger]

No. I appreciate that we are a little bit light on time. I would echo everything that Mike just said, including his last point, which I think is a key point for this committee to consider.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

Fair enough.

While I'm talking with you, Ms. Salzberger, I think you said that Canada might benefit from a better definition of what critical industries are. If you didn't say that, I'm going to ask you the question anyway. Would we benefit from more detailed, exhaustive lists of what are actually identified as critical industries that are subject to a greater degree of scrutiny?

[Debbie Salzberger]

I don't believe I said that. If I did, I think it was misunderstood. What I would say, though, is that we would benefit from additional guidance in respect of what types of industries might be considered critical industries for the purposes of national security reviews. I say that only to benefit the knowledge base. Transparency is a point that's been raised throughout this discussion. For the benefit of transparency, for the benefit of understanding what might be in scope, I think it would be helpful to have additional guidance, but to have an exhaustive definition of what constitutes national security, I think, is inflexible.

[Tako Van Popta, Conservative, Langley—Aldergrove, BC]

We're out of time. Thank you.

[The Chair, Liberal, Sherry Romanado]

That brings us to the end of our meeting today.

I want to thank the witnesses for being with us and for their excellent testimony.

Thank you very much to our clerk, our analysts, our IT people and our interpretation staff, who are helping to make this possible.

The meeting is adjourned.