Good afternoon. Thank you for the opportunity to address you today.
I'm a litigator by training. I have a firm in Toronto called Gilbert's LLP. We work with innovation-driven clients, particularly those who are dependent upon investment for IP. We also work with indigenous communities, which increasingly are looking to expand their economic footprint. My perspective is one of someone in the field, less at a macro level and more as someone who's a foot soldier out there trying to promote Canada as a great place to be and to invest in and in which economies can grow.
The Investment Canada Act, of course—and I leverage its original foundation—seeks to strike a balance between national security and driving investment in economic activity. I look at these proposed amendments—in particular, we're going to focus on proposed new paragraph 11(c)—with particular concern, which I address in the prepared remarks I handed in. That deals with entities and the notion of what I see as a switch from the original act, which defines a potential investment by a third party entity, a foreign-controlled entity, in a Canadian entity. That's what the Investment Canada Act as currently drafted describes.
As I read it—and I'm just a plain litigator and a business owner out there dealing with these things—the proposed paragraph 11(c) describes an entity. It doesn't tie it to a Canadian entity as defined under the act. What that could lead to, since the definitions currently in the act are disjunctive, is a situation in which you have, for example, a U.S. entity that's going to invest in another U.S. entity, with a small operation here in Canada that wants to hire one employee and set up a place of business that might get material technical information, as described, having to give notice to the Canadian government and wait for an investment to take place.
I think it's a drafting error. I'm not sure it was the intent of the act to do that. I could be misreading it, but certainly from a layperson's perspective, I don't think it would achieve the objectives of this committee or of Parliament by trying to have that long arm's reach into any jurisdiction outside of Canada.
From our perspective, it would be important to clarify the scope and the reach. As the Canadian Bar Association also pointed out, it looks to be overly broad. It should be tightened up, or at least it should delineate to Canadians who try to operate a business here or to foreigners who are operating a business abroad who want to hire a Canadian why we need to go through this process.
Of course, Canada has a lot of skilled people. We are the most highly skilled of all the OECD countries. We're trying to encourage people to hire folks here and we're trying to encourage the placement of businesses here. The concern could be that we've gone almost too far with this act.
There is another concern. I mentioned at the outset that we do work with indigenous communities. That's increased in the last few years, and I don't see any specific addressing of the concerns of indigenous communities in the Investment Canada Act or in the proposed amendments. You could say, “Why is that? We're just concerned about foreign-controlled entities.” The perspective of indigenous communities is that they have been historically affected by the Indian Act and residential schools and they have long suffered under the reserve system, which took them and put them far away from the levers of economic activity. They also have not been involved in nation-to-nation consultations towards economic sovereignty.
The Canadian government did specifically recognize the UN Declaration on the Rights of Indigenous Peoples in June 2021 and is currently undertaking a review of all legislation to see how that commitment needs to be applied. Right now in this committee you're looking at an act that deals with investment. The question is—and I don't know the answer—has there been specific outreach to indigenous communities?
I can't speak directly, as I'm not indigenous, but I do advocate for interests like that, and a seat at the table, economic sovereignty, is what they're seeking. It would be interesting to see if the committee has received that input and would even consider possible exemptions as they lean towards economic sovereignty. I don't know the specifics of how that would work, but I think that conversation should take place, and the committee should look at that carefully in consultation with leaders from first nations and indigenous organizations, as they increasingly try to improve their economies.
I have also read the brief of the Canadian Bar Association and generally support the recommendations. I do think that the definitions need to be tightened up. I agree with the amicus suggestion in judicial reviews and further would consider it a good idea to have safe harbours for start-ups. We have a group within our firm called Slingshot, which helps start-up entities with a subscription model for legal services. We act for a lot of start-ups and small entities that are struggling to get money into their entities.
This country cannot be an island unto itself. We don't have the capital in this country that can be deployed, even that of the big pension funds. I can't tell you how many times I hear people say, “Oh, we'll get the pension funds to do it.” The pension funds need to spread their money across the world, and they can't be an answer for everybody who has an idea. We're in a marketplace that's very competitive, and we need to have access to capital.
That's the balance I leave to you. It's good work that you have, and I'm coming with a particular perspective. I look forward to the session.