Thank you, Mr. Chair.
Colleagues, thank you for welcoming me to the committee this evening. I would like to take this opportunity to wish you a happy 2022.
I also thank you for the opportunity to set the record straight on Canada's approach to the review of foreign investments, particularly those involving critical minerals.
First of all, let me be very clear with all Canadians watching tonight. Under the Investment Canada Act—or, as we call it, the ICA—all foreign investments are subject to a thorough review. This process is agnostic of country or industry and applies regardless of the value of the investment. It is a multistep process led by my department and Canada's national security and intelligence agencies.
Investments in critical minerals receive immense scrutiny. As you will recall, in March 2021 I was the one who updated the publicly available national security guidelines to make it clear to the world that we will apply this enhanced scrutiny when critical minerals are implicated. As a former minister of infrastructure and of international trade, as well as foreign affairs, I have been thinking about these issues from a number of angles and for many, many years. That is the perspective I now bring as Minister of Industry of Canada.
Transactions involving critical minerals are systematically and thoroughly reviewed and scrutinized. Neo Lithium was no exception. Let me be very clear: Neo Lithium was reviewed by the government and national security experts, full stop.
Let's be clear, we will not compromise on national security issues. That is our top priority.
The national security review framework built into the act is a critical tool that allows us to protect Canada from these threats.
Now, I understand that not everyone is familiar with how the ICA works, so let me provide some details on the process.
From day one, security and intelligence agencies assess information and intelligence related to the Canadian asset being acquired or business being established, the terms of the investment and the foreign investor. This often includes consultations with Canada's allies.
Following these consultations, investments that could be injurious to national security are referred to the Governor in Council, who may order a further extended review under section 25.3 of the act. If the transaction does not meet the legal threshold to extend the review further, meaning it is found to not be injurious to Canada's national security, then the process ends.
People mistake the extended review as being the only one in which national security concerns are taken into consideration. Let me be clear that a section 25.3 order is not required for the security and intelligence agencies and other investigative bodies to review an investment: From the moment we become aware of a proposed investment, the legal authorities to investigate under the act are exactly the same through each period of the multistep review process.
It is this review process that was followed in the case of Neo Lithium. Those who claim that a national security review was not done in this case are simply, knowingly or unknowingly, misrepresenting the facts. Instead, they are cherry-picking and jumping ahead to another step in the process that is further down the chain of verifications under the ICA.
There was sufficient information to make a determination at that stage of the review that no national security harm could arise as a result of this transaction.
Let me repeat this in French: the Neo Lithium transaction was carefully reviewed by experts, and no harm or risk to Canada's national security was identified to warrant an extension of the review.
It must be noted that by law there are stringent confidentiality requirements to protect both the commercially sensitive information shared by companies during a review and any classified information relating to Canada's national security.
It is public knowledge and worth repeating here that although Neo Lithium is domiciled and incorporated in Canada, the mine is in Argentina, the operations of the company are in Argentina and all but a handful of its employees are based in Argentina.
Finally, we are going to be talking a lot about critical minerals in the years ahead—at least, I hope so—so let's clarify certain things.
One could be misled into thinking that all critical minerals are inherently the same and of equal value. The reality is that critical minerals come in many forms, with varying degrees of importance to Canada's supply chain. Each deserves its own consideration and action.
We understand the importance of critical minerals. That's why, in Budget 2021, our government announced funding to improve Canada's supply of critical minerals.
In addition, Minister Wilkinson and I are developing a Canadian critical minerals strategy, in addition to our $8 billion investment in the Net Zero Accelerator initiative, to attract major investments across the electric vehicle battery supply chain.
In the case of lithium and battery production, for example, there is lithium carbonate and there is lithium hydroxide. Electric battery production in North America does not require or rely on imports of lithium carbonate. Even a cursory look at the market shows that lithium hydroxide is the product preferred by automakers, manufacturers, cathode suppliers and consumers in North America, Europe and Japan for electric vehicle battery production.
Factors such as the nature and strategic value to Canada of the mineral deposits involved, the ability of Canadian supply chains to exploit the asset, Canada's projected ability to produce a commodity itself, global commodity prices, current geopolitical circumstances and the nature of the Canadian business are all taken into consideration when determining what constitutes a national security concern. These are some of the important factors the government considers when deciding whether an investment is a potential risk to Canada's national security.
I would say, Mr. Chair, that it is irresponsible to brush them aside for a good headline. Canadians deserve a sober, thoughtful and factual conversation on this matter. Our government's record makes it abundantly clear that where national security is concerned, we do not hesitate to take decisive action, and our assessment of risk keeps pace with evolving economic and geopolitical circumstances.
Thank you [Technical difficulty].
