Industry Committee on June 14th, 2023

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

If we put a subamendment in, that would alleviate your concerns, would it not?

[Mark Schaan]

I would raise a potential other concern, which is, notwithstanding the overtly broad and purposeful nature of the factors, to balance that with the desire for some degree of certainty. If this is non-exhaustive and suddenly you can throw in whatever else you want to consider, you're actually bringing uncertainty to potential investors, because now you've actually.... The balance is that it is a broad enough basket to say you can look at the important things—here they are, broadly constituted—which gives certainty to the investor that you can't just make up stuff as you go along and think about and add other factors, while also being broad enough to get at what's important.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

Are the enumerated factors in this amendment outside the current scope, or are they within the current scope?

[Mark Schaan]

We believe them to be within the current scope, which is why it's problematic to potentially add them in. We believe we already have the power to do this, and we have.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I don't understand.

Here's the deal: We're in Parliament. I work for the Canadian public. You work for the Canadian public. If we want certainty, that has to come from the Canadian public, not from you. You don't pass laws; we do. We want this in here, because this adds certainty. We don't trust you, to be clear, not to include this—

[The Chair, Liberal, Joël Lightbound]

Mr. Lawrence, to be clear, the officials are here to answer questions that are technical in nature and specific to the bill before us. They're not here to debate the policy rationale or intent.

We have to keep it in a certain tone, Mr. Lawrence. I hope you maintain that tone for the rest of your time with us.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I certainly wouldn't want to divide and stigmatize.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Lawrence.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

If I get passionate, I apologize. It's not directed at.... Like I said, I thank you for your service. To be candid, I just don't think what you're saying makes sense. I think I should be allowed to say that as a legislator and representative of the Canadian public.

Why can we not highlight certain categories within a broader category? It doesn't exclude any. If it does, maybe we should work to get a subamendment, if that would alleviate it. That's where I want to go. I want this to be a good law, but I want to make sure these two highlighted things are highlighted.

I'll yield the floor at this point. Can you put me back on the list? I want to think about this for a second.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Lawrence.

Go ahead, Mr. Vis.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I was reading a Globe and Mail article by Niall McGee on August 13, 2022, called “China has encroached on Canada's critical minerals industry, with almost no obstruction from Ottawa”.

The article states:

While Canadian politicians claim to want to scrutinize foreign takeovers, over the past five years fewer than 1 per cent have been subject to in-depth security reviews under section 25.3 of the National Security Act, and almost none were blocked. Last year, out of 826 foreign investment filings, Canada conducted only 11 section 25.3 reviews. The government blocked only one of those transactions: Chinese state-owned Shandong Gold Mining Co. Ltd.'s attempted takeover of Canadian gold mining company TMAC Resources Inc.

There was another example that was listed. I believe it was Norsat technologies, where I believe Mr. Masse's amendment comes from. He's nodding in agreement with me. Intellectual property was indeed lost.

The general mood of the Canadian public is that they want this bill strengthened. I'm glad the government brought this forward, but I don't know whether the regulatory approach has done its due diligence. Now, under Australian law, they have the ability to go back.

My question for the official is this: Have any analysts in your department examined Bill C-34 in the context of...? Say Bill C-34 had been in place five years ago. How many more transactions would have been covered under section 25.3 of the National Security Act, in the context of critical takeovers by foreign state-owned enterprises?

[Mark Schaan]

Mr. Chair, I'm not in a position to answer the question that was put by the member.

Section 25.3 is fact-based and use case-specific. A case is determined in consultation with the national security community as to whether or not a given investment meets the test of “could be injurious to national security”. Bill C-34 makes important improvements in a number of ways, but the degree of being able to go back and determine whether or not the national security advice would suddenly rise to the threshold of “could” is not something I'm in a position to answer.

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I think everyone wants to get this legislation correct, but the problem is that I don't think that as a committee we have all of the relevant information as the act applies. We've heard from officials—and I'm not challenging the officials on this—but they're subject to the security provisions that they have to uphold as officials and, as legislators, we're asked to basically make amendments to one of the most consequential bills for business activity in Canada without access to the confidential information that informed the decision-makers at the Department of Industry.

That's why I tend to side with Mr. Masse on the need for more explicit lists in the bill to provide the assurances that British Columbians especially and, I would say, all Canadians—it's just that in British Columbia it's particularly bad—want to see from this legislation: to see that we're protected.

I don't have anything else to add on this amendment, other than the fact that I think we should move a subamendment to alleviate the concerns raised by the officials and ensure that it wouldn't, under future legal interpretation, be subject to—help me out here, Phil—an interpretation that would exclude other factors by the inclusion of the two factors right here.

With that, I'd like to move a subamendment that proposed paragraphs (c.1) and (c.2) don't exclude any other considerations made by officials or the minister in conjunction with these provisions at hand.

[The Chair, Liberal, Joël Lightbound]

Okay, just one second.

Mr. Vis, you're aware that, considering you're moving a subamendment, we would need the exact language in both official languages. Do you have the exact wording?

[Brad Vis, Conservative, Mission—Matsqui—Fraser Canyon, BC]

I don't, but if we recess for a second, I can write it up.

[The Chair, Liberal, Joël Lightbound]

With the committee's consent, we can suspend for a couple of minutes.

The meeting is suspended.

[The Chair, Liberal, Joël Lightbound]

Colleagues, we will resume.

There have been discussions among the parties, and there is unanimous consent to do what we did in the case of clause 7 for the new section 8.1 proposed by amendment NDP‑2, which is to defer it to the end of the bill when we have considered all the other clauses.

Do we have unanimous consent?

We have unanimous consent. That's great.

(Amendment allowed to stand)

(On clause 9)

That brings us to clause 9.

Does anyone wish to move amendments to clause 9?

I have Mr. Williams.

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

Thank you, Mr. Chair.

This is reference number 12457710. This is an amendment that Bill C-34, in clause 9, be amended by adding after line 26 on page 6 the following:

(7) Section 21 of the Act is amended by adding the following after subsection (8):

(8.1) The Minister shall provide reasons for any decision made under subsection 21(1), 22(2) or 23(3) explaining the factors taken into account by the Minister to conclude that he or she is satisfied or is not satisfied that the investment is likely to be of net benefit to Canada, and shall publish in the Canada Gazette any order imposing terms and conditions on the investment implemented or proposed by a non-Canadian.

This amendment, we think, goes to what our point is—transparency—and brings a bit more transparency. We heard from multiple witnesses that they would like to see more transparency in government. We certainly heard from witnesses from CFIUS, in the U.S., where they include a bit more transparency. They even have a public portion to that committee. This was our attempt to add that to this bill, Mr. Chair.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Williams.

I have a decision to make on amendment CPC‑3.

Bill C‑34 would amend the Investment Canada Act by authorizing the Minister of Industry, after consultation with the Minister of Public Safety and Emergency Preparedness, to impose interim conditions in respect of investments in order to prevent injury to national security that could arise during the review under part IV.1 and by allowing written undertakings to be submitted to the Minister of Industry to address risks of injury to national security and allow that minister, with the concurrence of the Minister of Public Safety and Emergency Preparedness, to complete consideration of an investment because of the undertakings.

Amendment CPC‑3 would add a new obligation for the minister to provide reasons for decisions made under subsections 21(1), 22(2) or 23(3) explaining the factors taken into account to conclude that he or she is satisfied or is not satisfied that the investment is likely to be of net benefit to Canada. The bill makes no provision for the providing of such reasons.

The House of Commons Procedure and Practice, third edition, reads as follows at page 770:

An amendment to a bill that was referred to a committee after second reading is out of order if it is beyond the scope and principle of the bill.

The chair is of the view that, for the aforementioned reasons, the amendment is beyond the scope of the bill. Consequently, I find the amendment inadmissible.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I see you looking at me, Mr. Chair.

I am going to be polite. We will not be challenging the chair on this.

[The Chair, Liberal, Joël Lightbound]

Okay.

Shall clause 9 carry?

(Clause 9 agreed to)

[The Chair, Liberal, Joël Lightbound]

Are there any further amendments before we go to clause 10?

Mr. Masse, go ahead.

[Brian Masse, NDP, Windsor West, ON]

It's NDP-3. I move that Bill C-34 be amended by adding after line 26 on page 6 the following new clause:

9.1 Section 23.1 of the Act is replaced by the following:

23.1 The Minister shall provide reasons for any decision made under paragraph 23(3)(b), and the Minister may provide reasons for any decision made under subsection 21(1) or 22(2) or paragraph 23(3)(a). The reasons shall include information on any representations made or undertakings submitted by the applicant.

This is for more transparency and for the minister to have to justify the decision-making process.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Masse.

I must inform you of another decision of the chair.

The proposed amendment would amend section 23.1 of the Investment Canada Act. The House of Commons Procedure and Practice, third edition, reads as follows at page 771:

…an amendment is inadmissible if it proposes to amend a statute that is not before the committee or a section of the parent Act, unless the latter is specifically amended by a clause of the bill.

Since section 23.1 of the Investment Canada Act would not be amended by Bill C‑34, the chair is of the view that the amendment is inadmissible.

As no one seems to want to challenge my decision, that will bring us up to clause 10.

[Philip Lawrence, Conservative, Northumberland—Peterborough South, ON]

I have a point of order.

Do we not have CPC-4 on new clause 9.1 there, Mr. Chair?