Industry Committee on June 14th, 2023

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

My apologies, Mr. Chair. I am from the finance committee, and we get things confused there.

[The Chair, Liberal, Joël Lightbound]

In the meantime, I don't seem to have it, so perhaps that amendment could be shared.

On clause 8, are there amendments?

Mr. Masse, go ahead.

[Brian Masse, NDP, Windsor West, ON]

Thank you, Mr. Chair.

I do have an amendment here:

8.1 Section 20 of the Act is amended by adding the following after paragraph—

[The Chair, Liberal, Joël Lightbound]

Apologies, Mr. Masse, but given that you are proposing a new clause, we have to deal with clause 8 first, and then we'll get to your proposed new clause 8.1 in amendment NDP-2.

Shall clause 8 carry?

(Clause 8 agreed to)

Now, Mr. Masse, I'll recognize you.

[Brian Masse, NDP, Windsor West, ON]

Thanks.

Monsieur Lemire is now lecturing me, for good reason.

Really quickly—I don't want to take a lot of time with this—this raises a couple of issues over privacy protection and intellectual property. They come from the experiences that we faced with regard to protecting privacy, in particular. Out on the west coast, Anbang was an example of a Chinese state takeover and getting access to sensitive materials, including people's personal information, through hotels and seniors residences it had purchased. As well, in Windsor, Nemak is about intellectual property that was developed in the auto industry and then moved to Mexico.

This amendment is to create more opportunity for the government and the minister to have enforcement on that, again, with state-owned enterprises. It comes from practical experiences of being at risk here.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Masse.

I see that Mr. Gaheer wishes to speak, but first I have a decision to render on this amendment.

The proposed amendment would amend section 20 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 20 of the Investment Canada Act would not be amended by Bill C‑34, the chair is of the view that the amendment is inadmissible.

Before I recognize you, Mr. Lawrence, you understand that the chair's decision can be reversed by a vote but it's otherwise not up for debate.

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

I understand.

Although it seems somewhat impolite, since I am a temporary member of this committee, I will challenge the chair.

[The Chair, Liberal, Joël Lightbound]

We'll move to a vote on the chair's decision.

Shall the chair's decision be sustained?

(Ruling of the chair overturned: nays 6; yeas 5)

[The Chair, Liberal, Joël Lightbound]

That brings us to amendment NDP‑2, which is now ready to be debated.

Go ahead, Mr. Gaheer.

[Iqwinder Gaheer, Liberal, Mississauga—Malton, ON]

Thank you, Chair.

I want to ask the officials whether they think this is actually admissible or not.

[Mark Schaan]

Thank you, Mr. Chair, for the question.

We already consider these factors with respect to the nature of the law.

One of the challenges of legislation is positive versus negative lists. There are existing obligations with respect to our capacity to include and understand privacy and IP protections as it relates to the ICA. Specifying them potentially suggests that other legislative obligations and considerations are actually not necessarily within the purview of the act.

Given the nature of the broad responsibility and remit that we believe we have under the ICA, specifically identifying these two considerations potentially may challenge us in the future. It is often something that we believe would be best left to something like guidance, where we can be very specific about the fact that we actually do require this and actually think of it explicitly as something that we want to think about with respect to foreign direct investment.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Gaheer.

Are there any more questions or comments on NDP-2?

I'll recognize Mr. Williams.

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

Thank you, Mr. Chair.

Can you maybe walk us through that? I'm seeing the two paragraphs. What in these two would stop the department from doing any of the work they're doing? How does this stop the work that the rest of the bill is carrying out?

[Mark Schaan]

My comment was less that it prevents this work—because we already do this work. It's the fact that by identifying this work—notably, privacy and intellectual property—we actually potentially don't think about other aspects that are also legislatively required. We have many other factors that we believe are actually factors we consider and also that have obligations under statute.

These both have obligations under statute, and we do consider them. By specifying them, we believe we're actually potentially preventing someone from saying to us, “Well, you're not allowed to look at other things because the only two you put in the act were these two.”

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

Thank you.

Where I would challenge that is—and we've talked about this a lot—that we're not going to put lists, critical lists, into the act because it would be hard to undo them. From what I've understood, everything will be done through regulation, and there's a lot of different testimony we have on that. I think that unless we have another act that spells this out, this would, at least in the interim, point to intellectual property, and we had multitudes of witnesses testifying how important it is that we look at that.

The only risk I see is that if we don't reopen this ICA again for 22 years, we might have to remove it, but I don't see a risk at this point, because there's no other act that points to that, meaning that besides leaving out the list—because that will be done in regulation, which speaks more to the industries we'll be looking at—this does talk about intangible assets: “intellectual property” and “protection of personal information” of Canadians, which has two parts. I think we had one witness, Mr. Balsillie, who made specific mention of both IP and data, and we had a lot of witnesses who backed that up.

It seems to me—and it comes directly from personal testimony—that the risk of having this baked into legislation is that it may affect the future, as opposed to the list that will be in regulation. I don't see that in there. Is that something you agree with or disagree with?

[Mark Schaan]

With respect, Mr. Chair, I would disagree. Privacy rights, particularly as they're spelled out here, actually speak to legislative and statutory obligations that exist under the Personal Information Protection and Electronics Documents Act. Where it speaks to intellectual property rights, those are actually spelled out in the Patent Act, in the Trademarks Act and in the Industrial Design Act.

The degree to which this specifies rights that are specific but doesn't actually list all of the other acts we care about, which also come into play and should be respected, runs the risk, actually, of having the contention that the government didn't think about them and therefore they're out of bounds.

With respect to the contention that we need to care about these, I would very much contend that the broad capacity of the ICA to look at factors related to investment in Canada includes intangible assets and privacy considerations. In fact, I know of a very specific case in which intangible assets and intellectual property rights were specific to the considerations that were given under the ICA.

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

Can you share that with us?

[Mark Schaan]

I can't share that because it's from a case.

[The Chair, Liberal, Joël Lightbound]

Thank you very much.

I have Mr. Lawrence, and then Mr. Vis, Mr. Sorbara, and Mr. Masse.

Mr. Lawrence, go ahead.

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

Thank you very much.

I'll continue on with you, Mr. Schaan. I understand you've been very active, and we appreciate all the time you've spent with this legislation. It's very important. I appreciate your service as well.

Your contention is that specifying these two items could have the effect of excluding other items. I want to be as constructive and helpful as I can be. I do believe these are excellent suggestions. I understand that you're saying it's already included in that, but there's an old saying: Trust but verify. I understand you're doing a great job, but there's no guarantee, unless this is written in law by Parliament, that it will continue on. Regulations can be passed by the government. Your internal guidance can change whenever you want it to change. I think these are critical things that need to be written down.

My constructive question for you is whether you believe it would be helpful if we subamended this to say that this is just one of many different things that the department should consider.

[Mark Schaan]

The factors that are currently listed in section 20 are intentionally broad:

(a) the effect of the investment on the level and nature of economic activity in Canada, including, without limiting the generality of the foregoing, the effect on employment, on resource processing, on the utilization of parts, components and services

I won't read them all, but, needless to say, section 20 right now has intentionally broad parameters for the purposes of trying to ensure that we can contemplate a number of factors. Suggesting that, in addition, it would be non-exclusive these other aspects, I think we'd have to think about.

I would note that there are existing guidelines. You're asking whether or not this is written down. Our existing guidelines on the national security review of investments state that the transfer of sensitive technology and intellectual property is considered during national security review, which applies to all foreign investments regardless of the size and all IP regardless of whether it is government-funded. If the request is that intellectual property be written down somewhere, I would just note that IP is written down in our national security review of investments.

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

I understand that, but putting these in, I think, is critical, especially with respect to the examples Mr. Masse gave and fully supported in there. It's been a while since I was at law school, but back when I was studying law in law school.... When we're interpreting legislation, unless there is something that says “exclusive” or “limited by” or language analogous to that, there's no way this would ever, in any way, limit your ability. That's just not the way laws are interpreted.

[Mark Schaan]

Intentionally including additional categories into a law is often rationalized. Jurisprudence routinely returns to the question of what the government meant by specifically adding in some clauses and not others. That's actually been a subject of considerable jurisprudence over the years—whether or not the government meant to actually exclude other things, because obviously that was intentional, while giving itself the right to do something it could already do. If it could already do it, why did it specify these things? It obviously might be suggesting that actually it was at the expense of what it could also do in other zones.

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

There are provisions in the Income Tax Act—and I apologize that I don't have them off the top of my head, but I'm happy to provide them to you, sir—where it has highlighted certain items but it's not exclusive. In fact, it's quite common in the Income Tax Act—that's my area of expertise—where it will enumerate four or five or 10, 15, 20 different items but then say that the list is not exclusive, which is exactly what this does. I can't see any legal principle that would exclude.... Show me the language in here that says that other factors would be excluded.

[Mark Schaan]

Right now the language is exclusive in that there is no such clause at the end of the factors, so by specifying them, you would potentially risk that.