Industry Committee on May 29th, 2023

[The Chair, Liberal, Joël Lightbound]

I call this meeting to order.

Welcome to meeting No. 76 of the House of Commons Standing Committee on Industry and Technology.

Pursuant to the order of reference of Monday, April 17, 2023, we are studying Bill C‑34, An Act to amend the Investment Canada Act.

Today's meeting is taking place in a hybrid format, pursuant to the House order of Thursday, June 23, 2022.

I'd like to apologize to the witnesses for today's delay because of votes at the House. Thank you for your patience.

I'd also like to thank the witnesses for being here on a sunny Monday afternoon.

Today, we have with us by videoconference, senior counsel Laura Black, appearing as an individual, Kate McNeece, partner, competition, antitrust and foreign investment at McCarthy Tétrault, and the Honourable Christian Paradis, who is a lawyer and former minister.

With us in Ottawa are Bob Fay, managing director, digital economy at the Centre for International Governance Innovation, and Tim Gilbert, managing partner at Gilbert's LLP. Thank you for coming in person.

Since we have a large group of witnesses, without further ado, I will give the floor to Ms. Black for five minutes.

[Laura Black, Senior Counsel, As an Individual]

Good afternoon. I'm honoured to be able to join you today to speak about foreign investment review.

Until October of last year, I was the director of policy and international relations in the office of investment security—that is, CFIUS—at the U.S. Department of the Treasury. As you are probably aware, the Committee on Foreign Investment in the United States, better known as CFIUS, is the inter-agency committee that reviews foreign investment for national security risk. In my prior role, I led the process for drafting and finalizing regulations to implement CFIUS's new authority under a 2018 statute and also led the international engagement function for CFIUS, where Canada was an excellent partner to the United States.

I am currently practising law with Akin Gump Strauss Hauer & Feld in Washington. Today, I am speaking in my personal capacity.

In establishing and implementing a foreign investment review mechanism, countries with open economies are attempting to meet dual objectives: protecting national security while maintaining an open investment environment.

In recent years, governments worldwide have created or strengthened review mechanisms—for example, to require more mandatory filings to ensure they have the opportunity to review higher-risk transactions, and in recognition of the fact that once material non-public technical information is shared, a subsequent divestiture cannot undo the damage to national security. These mechanisms vary by jurisdiction and, of course, each country must determine for itself where to draw various lines.

I understand that committee members have inquired as a point of reference how CFIUS has approached certain issues, and I will offer background on five relevant issues.

The first is mandatory filings. In the U.S., filing is generally voluntary, with parties receiving the benefit of a safe harbour from future review once CFIUS has cleared a transaction. Recent amendments made preclosing filings mandatory in two cases: investments where a foreign government would acquire a “substantial interest” in certain businesses with critical technology, critical infrastructure or sensitive personal data—called TID businesses—and certain investments by private companies into U.S. businesses with “critical technology”.

Although other transactions involving technology are subject to CFIUS's voluntary jurisdiction, the mandatory filing requirement is only triggered with respect to a particular transaction where a government authorization would be required to export the U.S. business's technology to the foreign acquirer or certain of its shareholders. Thus, transactions that are likely to be riskier are the ones that must be filed mandatorily preclosing. Other countries, such as the U.K., Japan and France, have taken a broader sectoral approach to mandatory filings.

Second is regulatory scoping. For CFIUS, the broad contours of jurisdiction are included in the statute, with many key terms defined in regulations, which can be updated more easily. Particularly where filings are mandatory, best practice is to provide as much detail as possible.

Third is interim measures. The 2018 legislation codified CFIUS's authority to impose interim measures while reviewing a transaction. Similar to the rationale for mandating filings, this can prevent harm to national security that cannot be reversed, such as preventing access to technology, though CFIUS has used this sparingly. CFIUS does frequently negotiate mitigation agreements to address identified risk.

Fourth is confidentiality. CFIUS's statute provides an explicit exception to its confidentiality requirements for sharing information with allied governments.

Fifth is excepted foreign states. Here, I will note an area of difference. As in Canada, CFIUS generally applies to investment from all foreign countries, and there is not a prohibited list. However, the 2018 legislation provided discretion for CFIUS to give exceptions for certain investors. Currently, investors with a tight nexus to Five Eyes countries, including Canada, are excepted from CFIUS's jurisdiction over non-controlling investments and all mandatory filing requirements. However, they are still subject to CFIUS's broad jurisdiction over transactions that could result in control.

Finally, I will also note that Congress provided CFIUS with a significant increase in resources concurrently with the expansion of its jurisdiction. Returning to the theme of protecting national security and open investment, this has allowed CFIUS to devote more resources to addressing risks while also more quickly processing benign transactions.

I look forward to your questions. While I'm not an expert on the Canadian process, I am happy to share my experience on investment security issues.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. Black.

I will now give the floor to Ms. Kate McNeece for five minutes.

[Kate McNeece, Partner, Competition, Antitrust and Foreign Investment, McCarthy Tétrault LLP, As an Individual]

Good afternoon, Mr. Chair and honourable members of the committee.

My name is Kate McNeece, and I'm a partner in the competition, antitrust and foreign investment group at the law firm of McCarthy Tétrault. Thank you very much for inviting me to appear before you today.

Before I begin my statement, I want to note that I am appearing here in my personal capacity. The views expressed today are my own and not those of my law firm or any client of McCarthy Tétrault. However, my submissions today are informed by my experience in assisting both foreign investors—including state-owned enterprises—and Canadian businesses navigate reviews under both the net benefit and the national security provisions of the Investment Canada Act.

I want to keep my remarks today brief, so I'm going to focus on just one aspect of Bill C-34 that I find welcome: the new provision empowering the minister to negotiate binding undertakings with the foreign investor to mitigate national security concerns.

Under the current ICA, the Governor in Council can impose conditions on an investment in the final stage of the review, but in practice this power has not been used since 2017. Empowering the minister to consider and accept binding undertakings during the primary national security review can improve the efficiency of the national security process by resolving matters prior to the final GIC review period. However, I believe the benefit of this provision will be limited if not paired with a greater level of transparency than currently exists.

First, when a national security review is ordered, the investor is customarily provided with very little information about the nature of the national security concern. In my experience, the foreign investor may not be able to discern the precise nature of the national security concern or even which business line or lines of the Canadian business it applies to. This lack of disclosure means that the investor's ability to provide representations to the minister or to propose meaningful and practicable undertakings to address the concern will be limited, undermining the potential benefits of this new process.

Second, the undertakings process will proceed more smoothly if there is sufficient context for the investor to evaluate the minister's requests for mitigation. If the minister cannot provide meaningful feedback to the investor on its proposed undertakings in the national security context, the undertakings negotiation process may move slowly or stall altogether.

Finally, further public disclosure of the undertakings that are agreed to with foreign investors is warranted for reasons of transparency and accountability. There are likely good policy reasons for not disclosing mitigation measures on a case-by-case basis. However, the minister could disclose mitigation measures on an anonymized or summary basis, as CFIUS does in the committee's annual report to Congress.

This disclosure would improve the administration of the Investment Canada Act by providing a remedial road map for investors—not to mention Canadian businesses—trying to assess the national security risk posed by a given investment. It would also demonstrate to potential investors that the undertakings process is not being used as a back door to obtain a net benefit type of undertakings for investments that are not reviewable under part IV of the act, and highlight to the public the steps that the Canadian government is taking to protect national security while ensuring Canada remains a welcome home for appropriate foreign investment.

Of course, there will be information that the government cannot share with the merging parties or with the public due to security reasons. It may be difficult as a practical matter to find the appropriate balance, but by including in Bill C-34 measures to improve transparency—such as an obligation to provide reasons for ordering a national security review, a clear legal standard for national security undertakings and a requirement to include information about mitigation measures in the annual report—Parliament can improve the efficiency of the ICA national security process and highlight its commitment to transparency and the rule of law in its administration.

Thank you very much for the opportunity to present these remarks. I'd be happy to answer any questions.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Ms. McNeece.

I will now give the floor to Mr. Christian Paradis.

[Christian Paradis, Lawyer and Former Minister, As an Individual]

Thank you, Mr. Chair.

Good morning, committee members. I would like to emphasize that I am appearing here as an individual.

My name is Christian Paradis, legal counsel and former member of Parliament for the beautiful riding of Mégantic—L'Érable. I also served as a cabinet minister in the Harper government from 2008 until my retirement from politics in 2015.

First, I would like to thank you for inviting me to the committee. Ten years ago already, I myself was Minister of Industry. I'd like to take this opportunity to extend my warmest greetings to the colleagues with whom I had the pleasure and privilege of sitting. I'm also delighted to meet the new members.

The subject currently being addressed by this committee is of the utmost importance. Our country has developed well compared to many other countries, thanks to its values based on a free and democratic society and mainly anchored in the rule of law. The strength of our system and its stability are cited as an example around the world.

Our heritage as an open, trading nation has made us a major economic powerhouse today. Our country is one of the most resource-rich places in the world, making it a popular place for foreign investment. The ever-increasing level of investment also brings its own set of challenges.

As you know, nearly 40 years ago, the federal government passed the Investment Canada Act. But society has come a long way since then, and many things have changed. More specifically, it's fascinating to see geopolitical and socio-economic realities have evolved over the past few years. Significant trends were already apparent in the late 2000s, leading to a growing number of investment reviews on national security grounds. In 2012, guidelines on publishing appeared with regard to the acquisition of Canadian companies by foreign state-owned enterprises. Basic questions of governance and transparency increasingly being raised, the government needed to step in to protect Canadians' interests.

The security upheavals of recent years, indeed months, certainly call for a review of the Investment Canada Act. I have taken note of the comments made by Minister Champagne, who said he wanted to add tools to his toolbox with the main objective of protecting certain sectors, which have yet to be defined.

I took note of the various proposed levers, such as advance notice of investment, interim conditions after consultation with the Minister of Public Safety, the extension or termination of a review, the protection of information in reviews and judicial reviews, the disclosure of confidential information to other foreign states and increased penalties.

As you are all aware, the current context calls for a review of the Investment Canada Act, as the authorities must be able to deal properly with fundamental issues of national security. Given the importance of this issue, I believe the work of this committee is extremely important. Dealing with issues that have international consequences sends out an important message that does not go unnoticed, whether in a positive or negative way. The markets are obviously the first to read these signals, and that's why we will have to move forward carefully and not intervene too heavily, that is, to properly apply and, in particular, frame the levers which will be used.

I agree that the act needs to be reviewed, and the proposed levers seem appropriate at first glance. I believe, however, that a word of caution is in order when it comes to implementation. It will always be important to optimize the transparency of the process, as much as possible, given that we obviously cannot disclose everything, not to mention having a predictable and consistent process. It will therefore be important to carefully calibrate the application of the act by means of the various tools proposed, since legislative rigidity would risk having a chilling effect on the markets, as would directives that change too much over time.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Paradis.

I will now give the floor to Mr. Fay for five minutes.

[Bob Fay, Managing Director, Digital Economy, Centre for International Governance Innovation]

Chair and honourable members of the committee, thank you very much for the opportunity to present here today.

Please allow me to make three comments related to Bill C-34.

First, intangible assets, particularly data, have changed the nature of economic growth and created new value chains, thus requiring a fresh lens and a renewed focus on the benefits and harms that may come from foreign direct investment. First-mover advantages, economies of scale and scope, network effects and asymmetric information derived from data create greater economic concentration that can leave Canada beholden to foreign firms and also reduce our economic resiliency.

Further, foreign direct investment may be used to capture Canadian intellectual property and data, which can reinforce such impacts. For example, data can not only allow investors to ring-fence a particular market; it could also allow investors to move into other sectors that may be sensitive and not anticipated with the initial investment. In other words, the capture of data can create issues across sectors and not just in a specific market. Thus, one needs to consider how data may be used across the list of sensitive technology areas and outside of them, not just within those specific areas. This can arise from any investment and not just those by state-owned enterprises.

Data is extremely valuable. We have an idea of the aggregate value of data, with experimental estimates from Statistics Canada placing it around $200 billion Canadian, though we need more detailed and updated estimates. Because data is not explicitly valued on balance sheets, monetary thresholds for a review miss the capture of data that may be the reason behind the investment. Data need not only be held in large firms but also smaller ones, so where the investment takes place in the value chain is important.

Second, data creates geopolitical issues that touch upon national security, and Canada needs to be active in setting global rules. Countries and firms are strategically setting rules around the uses of data, particularly personal data, that can give rise to national security concerns and have a direct impact on Canada.

Canada needs to be actively engaged internationally in setting these rules, including standards, since Canada can be held accountable under such rules: for example, adequacy decisions by the European Union for its general data protection regulation. Just as Canada may be judged by its adequacy to rules set in other jurisdictions, Canada should also assess other countries on the prospective uses of our personal data and whether they meet Canadian values. In this regard, it is important that Canada's own governance is up to date with respect to privacy legislation, for example.

Third, data requires a whole-of-government approach, as well as new forms of governance. Although it is important to take a national security perspective to foreign investments, it also requires that other policy areas be taken into consideration, including privacy, data governance, competition and consumer protection, public safety and so on.

There are a few examples. Investment that could lead to greater economic concentration may make our economy less innovative and resilient. This is linked to competition policy. Also, personal data can be combined with other data to reveal patterns of behaviour, which can then be used to create social tensions and undermine our institutions and democracy. This is clearly linked to public safety and national security.

A recent example from the European Union and the United States that links privacy and national security is the so-called Schrems II decision from the Court of Justice of the European Union, which invalidated the EU-U.S. Privacy Shield, which relates to the cross-border transfers of personal data, on account of “invasive U.S. surveillance programs”, arguing that it did not provide adequate recourse for individuals whose data may be used by U.S. intelligence agencies.

Our regulatory structures, therefore, need to adapt. As I noted in my submission to the consultations on the Competition Act, digital technologies are challenging all policy frameworks, and broader regulatory and policy-making structures need to be considered. In this context, the interaction of investment review under the ICA and the Competition Act is very important.

I would urge that decisions on investments wait until respective reviews are completed so that the expertise of each area can be drawn together for a broader assessment, given the intricate linkages that may exist.

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Fay.

Now we'll move to Mr. Gilbert for five minutes.

[Tim Gilbert, Managing Partner, Gilbert's LLP]

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.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Gilbert.

To start this discussion, we'll go to Mr. Williams for six minutes.

[Ryan Williams, Conservative, Bay of Quinte, ON]

Mr. Généreux is going to go today.

[The Chair, Liberal, Joël Lightbound]

You now have the floor, Mr. Généreux.

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

Thank you, Mr. Chair.

Thank you to all the witnesses.

Mr. Paradis, it's a pleasure to see you again today.

Long time no see.

I'm glad you accepted the committee's invitation to come and speak to this important bill.

You mentioned the 2012 guidelines. You were Minister of Industry at the time, if I'm not mistaken. As you said, the government at that time made amendments to adapt the Investment Canada Act. Are the amendments you are proposing today very different from those you proposed back then? Is there anything that could potentially be a hindrance?

Mr. Gilbert talks about amendments or definitions that are important. You talked a bit about that, too. Do you have any suggestions for us on how certain parts of the current bill could be defined or redefined?

The question is also for Mr. Gilbert.

[Christian Paradis]

First, thank you, Mr. Généreux.

I alluded to 2012 because the situation was more limited. In a context where foreign state-owned enterprises were increasingly coming forward to acquire companies in Canada, the main question was what was happening with governance rules. Canadians were generally greatly concerned. At the same time, it was always important to maintain a balance, that is, to send the markets a positive signal, but not at any price. That is why I took a broader approach to the issue in my presentation and spoke to the values of a free and democratic society. After all, our system is a market-based democracy. When it comes to dealing with economic systems that are more like a dictatorship or where governance is opaque, it's more problematic. That's why, at the time, we established guidelines.

I find the current bill interesting. It addresses the whole issue of personal data as well as technology. Things are evolving rapidly. It is clear that things should be done upstream to protect critical data. I think that's potentially a good thing.

However, I talked about balance, and that's the only thing I'm questioning. I agree with the Canadian Bar Association on this. We're talking about different activity sectors, and that's what we have to focus on. How are we going to define business sectors properly? Which ones do we want to protect? Why are we defining certain sectors in particular? Some have been identified, and they would be the obvious ones. But there are also concerns about casting too wide a net. In the case of certain investments, the message sent to markets might create an unforeseen boomerang effect, whereas otherwise these investments would not be a cause for concern.

That's the point I'm trying to make.

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

All right.

Mr. Gilbert, you talked about the Canadian Bar Association and your experience in the field.

I'll come back to the definitions, because I think they're essential. Do you think they are too vague now? Do they need to be changed or clarified?

I'll provide some context. In his appearance before our committee, Mr. Balsillie, formerly of BlackBerry, said that Canada, under the current Investment Canada Act, was far behind other countries, and even that the bill to amend it, which we're studying right now, wasn't moving fast enough and didn't go far enough.

Do you share this opinion?

[Tim Gilbert]

Let me just deal with definitions first.

I flagged the concern about the capture of a U.S. entity or foreign entity by a de minimis investment. I think that can be corrected by looking at proposed paragraph 11(c) carefully and just putting the word “Canadian” back into proposed paragraph 11(c), which doesn't exist, before the word “entity”. It would be a “Canadian entity”, and “Canadian” is defined in the act. Then there are other provisions, and people who do more competition law talk about the size. Then there are prescribed activities.

Losing that notion of it being an investment in a Canadian entity—all or part Canadian—I think is something that needs to be addressed at the legislative stage.

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

You said this was the case in particular for human resources, but it's also true for potential foreign investment. You gave the example of the United States in relation to human resources, but it also applies to potential financial investment.

[Tim Gilbert]

Yes, absolutely. It's investments and the location of businesses here, which, again, I think we want to encourage.

The other thing the Canadian Bar Association talks about is what “material non-public technical information” means, and they suggest that should be teased out.

The concern I have, as a practical litigator who deals with trade secret litigation all the time, is that it basically depends on the circumstance of each company. It's not something you can put a catch-all on. It's like a patent. You can get patents on all kinds of things, from zippers to whatever. When you try to define that, you're taking that away from the unique circumstances.

Effectively, it means, in my view, that practically everything is covered. If you're a shareholder and you're putting an investment in, under this legislation you are going to be open to having to submit that. A conservative position for a lawyer would be to say, “You'd better submit.” I'm not going to hang my hat on the definition of “you're not getting any technical information.” How would you even know? It's not even in the lawyer's control. It's back and forth with their client. It's outside of their control, so I would just say submit every time. You're making an investment. You'd better get into Canadian government. Otherwise you could be offside.

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

What about Mr. Balsillie's statement about our being behind other countries in this particular kind of law?

[Tim Gilbert]

It's interesting. I don't have a comprehensive understanding of all other countries. What I can speak to is the atmosphere in Canada towards investment and the need for more investment, particularly in R and D. It takes an enormous amount of money, with little return and no knowledge that there will be a return. It isn't like saying, “I'm going to buy oil contracts and I already have my customers lined up.” That's more of a direct line in terms of how you are going to make money, having the contracts lined up.

In research and development, it is a risk. It is an entirely risky business. At the same time, we tell the world we want to be a knowledge-based economy. We want to move from hewing wood and extracting minerals and metals, which have served the country well, into having a knowledge economy. Then you say, “But I want to disassociate myself from the world capital markets that would allow that to happen.”

Given the tension in this act, my suggestion would be either to look at safe harbours or to identify the countries of interest. If you really are concerned about particular countries, then the minister of external affairs could say, “We are now concerned about x” whatever country that might be. That might be another way to approach it.

I don't mean to throw a monkey wrench into everything, and I'm not at all an expert on foreign policy. It's just that I am dealing with companies trying to survive and thrive. The way we thrive is to sell our technology and our ideas abroad. That's intellectual property. It doesn't mean you control it just here. It means it's a good idea throughout the world, and we have an expansive view on Canadian industry.

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

Thank you very much.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

Mr. Van Bynen, you have the floor.

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

Thank you, Mr. Chair.

I would like to let the witnesses know this has been a very interesting discussion from the beginning. I know the real challenge is finding the balance in creating an environment that will attract investment and at the same time address the risks. Generally speaking, the challenge with legislation is that we tend to put up our guardrails through the rearview mirror. What we need to do is give some consideration to what lies ahead of us. We need to be competitive on a global basis.

My first question would go to Ms. Black.

What are the other jurisdictions doing to address the national security concerns in foreign investment reviews? Does our approach align with those of our international peers, such as the Five Eyes partners? I know you touched on that early on in your presentation, but I would like you to expand on that if you could, please.

[Laura Black]

Over the last three years, over 30 countries have taken action either to establish a review mechanism for the first time or to expand it.

Canada, as you know, has one of the oldest investment review mechanisms. Last year, CFIUS, as part of its excepted foreign state analysis, determined that, in the U.S. view, Canada has a strong system. Canada's jurisdiction is expansive.

Where Canada perhaps has less authority than other jurisdictions is in the preclosing mandatory filings so—