Evidence of meeting #84 for Industry, Science and Technology in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was amendment.

A recording is available from Parliament.

On the agenda

MPs speaking

Also speaking

Mark Schaan  Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

4:20 p.m.

Liberal

The Chair Liberal Joël Lightbound

I don't know if Mr. Schaan wants to intervene. Then we'll move it to a vote.

4:20 p.m.

Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

Mark Schaan

Once the word “assets” is in one of these amendments, including substantial assets, it would allow for guidance to be able to issue as to what that means. The problem with any asset is that, if I sell a photocopier and I run a laser business, I potentially am now encumbered by the act because I'm actually selling an asset, and the asset may or may not be substantive to the operations of the business.

There are both resource implications in terms of the number of company and asset transactions that are suddenly within our purview of review, and then also the degree to which we have the capacity to be able to actually issue guidance. The rationale for this determination is for us to be able to issue guidance to ensure that what we're getting at is actually meaningful.

4:25 p.m.

Liberal

The Chair Liberal Joël Lightbound

Mr. Vis is next.

4:25 p.m.

Conservative

Brad Vis Conservative Mission—Matsqui—Fraser Canyon, BC

Just in response to that, it's important to understand that it's only applying to state-owned enterprises. The scope of companies in Canada that state-owned enterprises would be interested in acquiring is in fact very narrow, so we're not applying it to general commerce here. We're only applying it to state-owned enterprises, which already narrows the applicability of this clause in the first place. I would kindly disagree with your assessment there.

Thank you.

4:25 p.m.

Liberal

The Chair Liberal Joël Lightbound

It's on the record. Thank you, Mr. Vis.

Are there any more comments on CPC-5? Otherwise, I would ask Madam Clerk to move to a vote.

(Amendment agreed to: yeas 11; nays 0 [See Minutes of Proceedings])

4:25 p.m.

Liberal

The Chair Liberal Joël Lightbound

CPC‑5 is therefore carried unanimously.

We now move to CPC‑6, which is on page 8 of the bundle of documents.

I will yield the floor to Mr. Perkins.

4:25 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Merci, Monsieur Chair.

My French is so good.

4:25 p.m.

Some hon. members

Oh, oh!

4:25 p.m.

Liberal

The Chair Liberal Joël Lightbound

You were in Quebec City not too long ago.

4:25 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

It was last week.

Bill C-34 does not provide exceptions for the national security review for Canadian allies. The rationale is that several witnesses expressed concerns that a national security review process could harm legitimate foreign direct investments. Specifically, witnesses like Subrata Bhattacharjee highlighted the impact that an overly broad review process could have of holding up important acquisitions and potentially scaring off legitimate investors. The concern becomes more prevalent if some of our other amendments succeed, specifically some of those that seek to broaden the national security review process.

Because Canada's national security interests are aligned with those of members of the Five Eyes intelligence alliance, there is no need to impose additional regulatory burdens on allied state-owned enterprises for purposes of national security. Further, consideration should be given to the considerable economic ties between Canada and its allies and the impact the review process could have on trade.

In light of these concerns, this amendment seeks to provide an exemption to national security review processes for state-owned enterprises from the Five Eyes intelligence alliance countries.

4:25 p.m.

Liberal

The Chair Liberal Joël Lightbound

Thank you, Mr. Perkins.

I have Mr. Turnbull on amendment CPC-6.

4:25 p.m.

Liberal

Ryan Turnbull Liberal Whitby, ON

I have just a couple of questions for the officials.

Mr. Schaan, do you think this amendment introduces differential treatment that could lead to legal challenges? I'm also interested in how this might impact our trade agreements and relationships and whether you think it's necessary at all.

4:25 p.m.

Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

Mark Schaan

Mr. Chair, I thank the member for his question.

I think our assessment, having read through the amendment, is that this could very much be reviewed and understood to be differential treatment in that it does favour and provide differential treatment to some people with whom we have trade agreements and not to others with whom we have trade agreements. It would likely be contemplated as being offside of the most favoured nation clauses that are in the vast majority of our trade agreements.

With respect to its utility, I think we already do ensure that national security reviews are important and considered in all cases, but in cases for which there is no clear raising of questions related to national security, they should not be an encumbrance to the investment climate in Canada.

4:30 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Could we suspend for just a moment?

4:30 p.m.

Liberal

The Chair Liberal Joël Lightbound

Okay.

We'll suspend for one minute. Because I've accepted it on one side, I'll accept it on the other side.

4:30 p.m.

Liberal

The Chair Liberal Joël Lightbound

We are back.

Mr. Perkins, go ahead on amendment CPC-6.

4:30 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

I'm presuming you're referring mainly to the WTO. In these various trade ruling bodies, how often have we been challenged in the past for that provision of deferential treatment?

4:30 p.m.

Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

Mark Schaan

With respect to most favoured nation clauses, I wouldn't be able to give an exact number, but they are important clauses that have actually been the subject of a number of trade disputes. I can't speak to how many of them actually have gone through the entirety of the process, but the most favoured nation clause and the assurance that we're actually providing equal treatment to all are important considerations.

I'd also just note that, in the vast majority of cases we get, the lead investor and the origin country of the lead investor are not usually the subject of the concern; it's usually a minority relationship that actually exists within the investor company. Therefore, by exempting Five Eyes from national security reviews, you wouldn't want to, by some sort of proxy, actually suggest that the minority relationships of those countries' investors are somehow not subject to review, because actually a huge chunk of the things we review involve an allied country investor.

4:30 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

I get that, except that this is specific to state-owned enterprises. Does the U.S. not do this all the time with most favoured nation status?

4:30 p.m.

Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

Mark Schaan

Differential treatment...?

4:30 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Yes.

4:30 p.m.

Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry

Mark Schaan

I certainly wouldn't want to pass judgment on the status of U.S. law, but I would indicate that there are considerable concerns in the international arena about most favoured nation.

4:30 p.m.

Conservative

Rick Perkins Conservative South Shore—St. Margarets, NS

Thank you.

4:30 p.m.

Liberal

The Chair Liberal Joël Lightbound

Are there any more comments on CPC-6?

Seeing none, we'll move it to a vote.

(Amendment negatived: nays 7; yeas 4 [See Minutes of Proceedings])

4:30 p.m.

Liberal

The Chair Liberal Joël Lightbound

That brings us to LIB‑0.3, which is on page 8.1 of the amendment bundle.

Mr. Gaheer, you have the floor.