Industry Committee on April 26th, 2023

[Brian Masse, NDP, Windsor West, ON]

Yes, it is. I come from the big three tradition, and it is because it has been something we've been trying to get for a long time.

We're already seeing the effects of the IRA, the Inflation Reduction Act, because even Canadian companies are subcontracting out some work to make eligibility back in the United States. It's going to get highly complex, and that's even for tool and die mould-making and so forth, so I appreciate that you're in front of trying to compete with it, because if we don't, then you're out of business generally. We don't like it in some respects, but that's the way this works.

I want to move on—actually, this does include land close to the Ojibway national urban park and by the Gordie Howe bridge—to a situation and to find out how Bill C-34 can deal with it. Windsor Salt was bought up by a holding firm and has now been bought by another one called “Stone Canyon Industries”. It's a U.S. holding firm.

It's now on strike. Stone Canyon is known for basically being a hedge fund for union-busting. That's what they're trying to do. There hadn't been a strike there in 30-something years. There now is a strike because they're trying to get rid of the union.

I guess the point is how we deal with this in this act where, for example, a Canadian business is bought by a legitimate green-lit buyer at the beginning, but maybe later on a foreign national state government comes in. Is there anything we can do about that? If it's a holding company, some of these private equity forms are also owned by different fiefdoms around the world, and we don't know where some of the money comes from.

Do you have any thoughts about that? Anbang was another one that came up before with the Chinese with regard to that situation. Is it almost like a rope-a-dope, where somebody buys a Canadian company and then later on, within a year or something else, it gets bought by another state-owned entity?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Thank you for your question.

To go back to your first thing, I'd say that when I started as industry minister there were plans about the slowing down of the auto sector in Canada. I think we've turned that around in a couple of months, and I can tell you that my phone is ringing like crazy, because if it's good for Volkswagen, it's good for the world. Now everyone wants to come, which is pretty good.

To your question, I think that every time there's a transaction under the act, it's subject to a review on national security, so it's not an evergreen thing. If there were a new buyer, a foreign buyer, that would be captured, and the pre-filing notice requirement will help. As you know, today they have to notify us regarding only sensitive areas, so not everything is captured. I think the pre-implementation filing requirement is the best insurance policy to make sure we can detect that and to make sure we have a national security review.

[Brian Masse, NDP, Windsor West, ON]

Do I have any time?

[The Chair, Liberal, Joël Lightbound]

No, you don't, Mr. Masse.

[Brian Masse, NDP, Windsor West, ON]

Okay. Thank you. It's all fair.

[The Chair, Liberal, Joël Lightbound]

We'll get back to you.

Mr. Généreux, you have the floor now for five minutes.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Minister, does the name "Medicago" mean anything to you? If memory serves me correctly, approximately $200 million was invested and then, all of a sudden, it just disappeared.

I hope we're going to build batteries. Seven billion dollars will still make each battery quite expensive.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

It's not the government that invested $7 billion.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

I know, but the government nevertheless gave Volkswagen some subsidies. You opened the door to the industry by giving the company a record amount in subsidies. The till will soon be empty unless your telephone stops ringing with all kinds of other companies asking for as much as the government gave Volkswagen. But then that's another topic.

I'd like to get back to Bill C‑34.

Neo Lithium was bought in January 2022 by a company owned by the Chinese government. In November 2022, about 10 months later, the Canadian government asked three Chinese companies not to get involved in Canada's critical minerals sector.

Why wasn't that done for Neo Lithium? It seems to me that it too was a national security issue.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I'll give a very clear answer to your first question, Mr. Généreux.

As we said, Canada, which is not the United States, will only allow a few investments of this kind. The other companies that have been calling want to invest in the Canadian ecosystem. That's why we decided on the contracts rather than the tax credits route. We choose those we are going to work with and we do it in a limited way; there are also several contractual conditions. You may have heard about these. We protect the interests of Canadians through a few highly targeted investments.

To answer your other question, I admit that it was based on information I had received from the intelligence services. We know that the Neo Lithium situation was special. When analyses are being done and decisions being made, I, as the minister of Innovation, Science and Industry, rely on intelligence received. When I decided to block the transactions of the three Chinese companies that wanted to make acquisitions, it was on the basis of the intelligence I received when the matter was presented to me.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Are you planning to block all Chinese investment in Canada?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I'm going to look very carefully at potential investments. I think, on the basis of the policies that were introduced, there are some key sectors that affect Canada's national security. We said that we would be paying special attention to transactions in these sectors. For state companies, we said that we could not allow transactions in the critical minerals sector unless the circumstances were very special. I think that the signal is clear: we're going to defend Canada's national interest in critical minerals.

[Bernard Généreux, Conservative, Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC]

Mr. Chair, I had forgotten that I was sharing my speaking time with Mr. Fast.

I'm giving him the floor.

[Ed Fast, Conservative, Abbotsford, BC]

Thank you very much, Minister. It's good to have you here at committee, and it's nice for me to be back at this committee.

I want to go to Volkswagen again. Earlier my colleague Mr. Williams asked you for a study that was done on the Volkswagen deal and seemed to indicate that there was a return on investment over five years. He asked you for a copy of that study. You demurred. I'm going to ask you again if you would provide this committee with a copy of that study.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would say you should talk to the Trillium Network because they published the study.

[Ed Fast, Conservative, Abbotsford, BC]

You know that the Trillium Network will not provide us with that study. The government based its decision, a $14-billion decision, on that study, or at least in part on that. Canadians certainly should have the right to have a look at the basis, the actual assessment and evaluation that were done, before $14 billion of Canadian funds are committed.

Again, I'm asking you if you would provide this committee with a copy of that study. It's a very simple request.

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would say you should ask the Trillium Network, and to be clear for the record, we did not base our decision on that, Mr. Fast. This is a generational opportunity. We've been fighting for a year on that, to bring $200 billion to $400 billion of economic value to the country. Mr. Fast, you have been minister of trade. You would have done everything in the world to bring an investment of that magnitude, my friend, and we landed it.

This is a moment to celebrate. It's about ambition. It's about possibilities. Let's dream big. We're Canada. We're big.

[Ed Fast, Conservative, Abbotsford, BC]

Minister, you actually have suggested that this study or the five-year return on investment contributed to the fact that you made this positive investment decision, so you have admitted that you've based a decision at least in part on this study. Would you please provide this committee and Canadians with a copy of that study so we can see some of that information that you based your $14-billion investment on?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

It's not a $14-billion investment. It's a $7-billion investment by Volkswagen. Let's be clear here, because we should not confuse Canadians. You're talking about $7 billion of Volkswagen's money to build a plant and a potential contingent liability—potential—to provide production support down the road after the plant is built, subject to the IRA retroactively after a year, sir, so—

[Ed Fast, Conservative, Abbotsford, BC]

With respect, Canadians aren't going to buy that. A contingent liability—

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

Actually Canadians understand that. You should have been in St. Thomas with us, sir, and you would have seen that Canadians are totally with us.

[Ed Fast, Conservative, Abbotsford, BC]

My simple question is this: Will you provide this committee with a copy of that study, yes or no?

[François-Philippe Champagne, Liberal, Saint-Maurice—Champlain, QC]

I would say to ask the Trillium Network, because that's their study.

[Ed Fast, Conservative, Abbotsford, BC]

Listen, Trillium will not provide us with that study. It's the government that should be providing us with that study.

[The Chair, Liberal, Joël Lightbound]

Gentlemen.... Mr. Fast and Mr. Champagne—