Industry Committee on April 26th, 2023

[Charles Vincent]

Thank you again for the question.

I will say that the minister has highlighted as well that we are focused largely on these amendments on the national security side. Obviously, that's something that you heard already. I will say that a lot of the time the issues that are being dealt with broadly in the context of national security have broad economic implications across Canada. Many times, the issues that we're dealing with through a national security review have broad implications for Canada's overall economic security.

The degree to which the net benefit test already provides us with the ability to look at certain investments that meet the thresholds, in the context of the national security investments, where there is going to be the ability to provide undertakings, that's a fairly significant change. That would allow us to make sure that as the minister and the Government of Canada are looking at these investments through the lens of whether or not they are in Canada's best interests or injurious to national security.... It gives us new tools that we didn't have before.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Go ahead, Mr. Van Bynen.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you, Mr. Chair.

I'd like to come back to the essence of the bill. It will update the penalties to strengthen deterrents. Can you talk to the committee a little bit more about these penalties for non-compliance? Who would be enforcing them?

[Charles Vincent]

Absolutely.

Currently the penalties that were set, were set the last time in1985. It was $10,000 per infraction per day.

Inflation alone would suggest that we need to adjust and shift for that. The proposal is to increase those to $25,000 per infraction per day. In that context, however, we would also be proposing to allow for the changes to that to happen through regulation rather than through legislation, recognizing that sometimes there's a large gap in terms of when the bill is reopened from a legislative standpoint.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Do you think, with the large multinationals, that $25,000 is going to be much of an impact?

[James Burns]

It's $25,000 per day per infraction. It can accumulate rapidly, and certainly much more than $10,000 per day per infraction. If, for example, a company fails to adhere or comply with an aspect of the act and it's taken, say, three weeks, that's $25,000 per day per infraction over a three-week period. It could conceivably make a bit of a dent. Certainly, our position is that we need to come up with a penalties regime that will allow us to correspond to typical deal valuations and inflation.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

Do all foreign investments undergo a national security review? What about investments from countries like the United States or Australia?

We're hearing a lot about friendshoring. How are we going to protect ourselves there?

[Charles Vincent]

Yes, it's important to recognize that the act is country agnostic. From that standpoint, yes, all investments that are notified go through a national security review and are looked at by the national security community.

At that point, as I mentioned earlier, the national security review has different stages. Ones that are determined early on to not have reasonable grounds to consider that they could be injurious, those ones take no further action and they move forward. Where there are indications of potential injury, then it moves to the next stage of the review and gets a deeper look, and it moves through the various stages from that standpoint.

When we're talking about investments coming from allied nations, yes, they do go through the process. It is a country-agnostic process, but if there's no reason to really consider that there could be injury to Canada's national interests, then at that point they are released at a fairly early stage.

[James Burns]

Yes. In fact, the vast majority of investments are cleared within 45 days.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

We're in an environment where we have a lot of complex corporate structures, and often intentionally to cloak ownership. What are your thoughts about a beneficial ownership registry so that we might be able to determine who the real owner of an organization is?

[Charles Vincent]

I think you're probably aware that we are actively in the process of developing such a beneficial ownership registry. It's one of the commitments the government has made. In fact, a different part of my organization, Corporations Canada, is working with various partners across the Government of Canada in that direction. From that standpoint, when we talk about the Investment Canada Act and the elements, it's always helpful for us to know and understand where the beneficial ownership lies.

I will say that the act provides us the ability to ask questions and require them, by law, to answer those questions. Within the context of investments that come through the Investment Canada Act, we're already in a position to be able to get at who the beneficial owners are, but that is through very specific and prescribed authorities that come under the ICA, as opposed to things that apply to Canadian businesses writ large.

[Tony Van Bynen, Liberal, Newmarket—Aurora, ON]

Thank you.

Thank you, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Van Bynen.

Thank you, Mr. Vincent and Mr. Burns.

That's all the time we have.

You look disappointed, Mr. Lemire.

[Sébastien Lemire, Bloc, Abitibi—Témiscamingue, QC]

Following your rather firm reaction earlier, I wouldn't want to challenge your authority.

[The Chair, Liberal, Joël Lightbound]

Thank you Mr. Lemire.

That's all for today's meeting.

I'd like to thank the witnesses for having contributed to this exercise, as well as the interpreters, the analysts, the clerk and all the support staff.

The meeting is adjourned.