Thank you very much, Mr. Chair.
It's nice to see the officials back again, after talking about the F1 on the weekend.
I'm pleased to move CPC-9, which would add a new subsection to the act. I'll read it:
(1.1) For the purposes of subsection (1), the fact that a non-Canadian has previously been prosecuted, within or outside Canada, for an offence involving an act of corruption constitutes, by itself, reasonable grounds.
This amendment is put forward in tandem with other amendments we've put forward targeting subsections 25.2(1), 25.3(1) of the act and proposed subsection 25.3(1.1). This amendment seeks to ensure that an automatic—we've had that chat before on the “may” versus “shall”—national security review is conducted whenever an investment is made by a non-Canadian enterprise that has previously been prosecuted for corruption.
Witnesses like Charles Burton have argued in the committee that Canadians cannot expect companies that behave atrociously in foreign nations to suddenly operate normally once they arrive in Canada. In fact, in meeting 70 on May 1, 2023, Dr. Burton said in his testimony:
In terms of our previous policy of allowing Chinese investor immigrants, for example, to come to Canada, the basis for assessment was whether the Chinese person who wanted to invest in Canada had behaved in a way that maintained the standards of China in how much income tax they evaded and how much bribery they paid, on the assumption that if they were following the norms of China, they would follow the norms of Canada.
The program was eventually cancelled, because that just doesn't work. You can't expect a company to behave morally in Canada when it's been behaving atrociously in foreign nations. That's my opinion....
That is what he said.
I'll use Hytera as an example. I know I've used it before, but I want to mention it again. Hytera—in 2019, I believe it was—acquired Norsat in Vancouver, which in 2011 had acquired Sinclair Technologies. Hytera itself, the parent company, a Chinese state-controlled company ultimately, was charged in 2022 with 21 counts of espionage in the United States, as well as being banned by President Biden from doing business and bidding on contracts in the United States.
While it wasn't an acquisition per se, eight months later both the RCMP and the Canada Border Services Agency procured equipment from Hytera. In 2019, the minister of industry of the day put forward only the first level of security review for that acquisition, saying, “That's okay. We don't need to go any deeper.”
Now, I've not seen the details of the deeper reviews on any national security reviews in quite a while. The level of detail may have changed.
The purpose of this is twofold. One is to make sure that if they are charged....
I guess the reason is this. I've had some discussions with government members about the issue of “prosecuted” versus “convicted”. Here's my challenge there. I think I may have said earlier, in a little email exchange, that I have a problem when a company has a remediation agreement and whether or not that's technically a conviction. Whether or not a company has found itself in a place where it could do a settlement out of court for whatever reason, the undisclosed elements of that, which are usually private and undisclosed, would prevent us from having an automatic review for corruption.
If you changed it to say they had to be “convicted” as opposed to “charged”...I've not seen a way, other than to say “charged”, where you can take account of all of those circumstances in legislation. It doesn't mean that this would be rejecting any takeover; it's just forcing it through a review.
To me, any time there is a charge on a company, there is a bit of where there's smoke, there's fire. Sometimes there are reasons it got off. To me, that would mean the company is perhaps operating with some not particularly savoury practices. It's been charged. It's probably been doing it well beyond what has been charged in other countries.
Some Canadian companies have even been charged abroad with similar types of issues. Famously, we had the issue of the remediation agreement that Canada was putting on SNC-Lavalin. That was the court case that resulted in the Minister of Justice and Attorney General's leaving.
Canada has to set a higher standard for the companies it allows to operate in this country. By doing this, we also perhaps send a signal to Canadian companies to be a little more careful. We are not just saying that bribery and corruption in certain parts of the world are a part of doing business and how you get contracts; we aspire to a lot more than that. We aspire to a higher level of business ethics.
The Investment Canada Act does not reflect right now the ability for the minister to do that. It has only net benefit review and national security review as options. I believe that corruption, bribery and a charge itself warrant making sure that we take a second look at any company that intends to try to make an acquisition in Canada.