Industry Committee on June 21st, 2023

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

I'll ask the officials to explain the change to the Investment Canada Act with the proposals in clause 20 of Bill C-34.

[Mark Schaan]

Mr. Chair, the subclause 20(1) amendment adds clarifying language to note that, if the foreign investor “has failed to give notice in accordance with section 12 or file an application in accordance with section 17,” the minister may send a demand letter requiring the foreign investor to stop the contravention, remedy the situation or show why there is no contravention, or—in the case of undertaking this—justify the non-compliance.

In subclause 20(2), the amendment to paragraph 39(1)(b) reflects the changes made to section 12 and provides that a breach in the pre-implementation filing requirement will allow the minister to send a demand letter to the foreign investor requiring them to “cease the contravention, remedy the default or show cause why there is no contravention of” the Investment Canada Act. We would note that the demand letter is not required to proceed to an application for court order for contravening the pre-implementation filing requirement, as set out in proposed subsection 40(1) and reflected in clause 21.

On subclause 20(3), the amendment reflects the changes made in section 25.3 and provides that the minister may send a demand letter to a foreign investor who does not comply with their written undertakings “referred to in paragraphs 25.3(6)(c) or 25.31(a)” or the minister's “order made under section 25.3”. The demand letter will require the foreign investor to “cease the contravention, remedy the default or show cause why there is no contravention of” the Investment Canada Act, or—in the case of undertakings—justify any non-compliance.

Finally, Mr. Chair, for subclause 20(4), the change in paragraph 39(2)(a) reflects the changes made to section 25.12—

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

I'm sorry. What are the pages?

[Mark Schaan]

They are pages 13 to 14 of the bill. It starts on page 13.

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

Thank you.

[Mark Schaan]

The change in paragraph 39(2)(a) reflects the changes made to section 25.12 and section 25.5, allowing the minister to send a demand letter to a person or entity that failed to provide information when requested for a national security review. The addition of proposed paragraph 39(2)(b) reflects the amendments to paragraph 25.3(6)(c) or paragraph 25.31(a), allowing the minister to send a demand letter to the person or entity that failed to comply with their undertakings. The addition of proposed paragraph 39(2)(c) further clarifies that the minister may send a demand letter to the person or entity if they did not comply with an order made under section 25.3 or section 25.4.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Schaan.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Did the minister have this power and the process before? Is this a new power and a process, or is it just trying to make it compliant with the new advance notice rather than afterwards? Is it trying to make it consistent? Right now the minister doesn't have to wait until it's over. He can—

[Mark Schaan]

The minister has this power, but does not have it yet for the new powers of pre-implementation filing. This is applying the existing powers of the minister to the new pre-implementation filing.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Thank you.

[The Chair, Liberal, Joël Lightbound]

Thank you, Mr. Perkins.

If there are no other comments, shall clause 20 carry?

(Clause 20 agreed to)

(Clause 21 agreed to: yeas 11; nays 0)

(On clause 22)

[The Chair, Liberal, Joël Lightbound]

We are moving on to clause 22.

Are there any comments on clause 22?

Mr. Perkins, you have the floor.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

If I'm reading this right, clause 22 is on the transitional provisions. Is there anything different or new? What are the transitional arrangements you're talking about here? How much time will there be before this comes into effect once the bill passes through Parliament?

[Mark Schaan]

The transitional provision states that the new amendments will apply to investments undergoing the national security review process on or after the day on which clause 15 comes into force, unless the investment has been referred to the GIC under paragraph 25.3(6)(a) already, or the non-Canadian has received a notice indicating that no further action will be taken for the investment per paragraph 25.3(6)(b). Further, for investments where a notice under subsection 25.3(2) of the former act has been sent before clause 15 comes into force, the minister shall send to the non-Canadian and Canadian business or entity a new notice under proposed subsection 25.3(2) of the new act, which will replace the old notice. The review timeline for these investments will be extended or reset by virtue of clause 15 coming into force.

Overall, the transitional provisions allow the minister's new authority to accept undertakings and impose interim conditions as described in clause 15 to apply to investments that are currently subject to the extended national security review under the unamended ICA without disrupting review timelines or inadvertently allowing an extension of review timelines.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

That's a lot of stuff. Let's see if I can simplify it. I don't know if I have it right, but when this comes into force, anything that's already in progress is subject to the act before amendment, and anything that comes in to the minister after the changes is subject to the new process. Is that correct?

[Mark Schaan]

Anything that's not concluded but is already under way gets subject to the new provisions, but not without a change in timelines. Anything received, for instance, that is either at the GIC or at the point where we've already indicated that it can proceed will not be subject to the new provisions, because either it's already at the final decision stage of an order or it's already been concluded. Everything new is subject to the new provisions.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

For anything that's in progress, does the clock start at the beginning or...?

[Mark Schaan]

The clock stays exactly where it was, potentially—

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

So if it was 20 days in, it remains at 20 days in.

[Mark Schaan]

That's correct.

[The Chair, Liberal, Joël Lightbound]

Thank you very much, Mr. Perkins and Mr. Schaan.

Are there any more questions or comments on clause 22?

Shall clause 22 carry?

[An hon. member]

I'd like a recorded vote.

[The Chair, Liberal, Joël Lightbound]

(Clause 22 agreed to: yeas 11; nays 0)

(On clause 23)

We'll move on to the coming-into-force provision.

Mr. Perkins, go ahead.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

What's the normal period of time after it has received royal assent? I think this clause says that the Governor in Council sets the date. Is this something that's going to be done quickly, or is it going to be a couple of months? Do you know? Maybe you don't yet know the intent of the Governor in Council on it. I don't know.

[Mark Schaan]

The provisions allow for the Governor in Council to fix the date for the coming into force so as to allow the flexibility for the government to have it come into force when the amendments to the regulations are in place. This simply allows for the regulatory process to ensure that we can actually catch up and that all of it can come into force together.