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.
Liberal
Iqwinder Gaheer Liberal Mississauga—Malton, ON
Thank you, Chair.
I just want to clarify the reference here so that we're all on the same page. Is the reference number 12542468?
Liberal
Iqwinder Gaheer Liberal Mississauga—Malton, ON
That's perfect.
This has been circulated. From what I can tell, this is basically to ensure that, when a company is selling a photocopier, let's say, they're not subject to these sorts of reviews. For the review part, it includes the acquisition of essentially all the assets used in carrying out the entity's operations. It's just to clarify that.
I'd like to ask the officials to comment as well.
Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry
As I noted earlier, I think we have the capacity, once the act contains words related to assets, to ensure that the guidance reflects the intent, which is to look at the sale of assets that are actually meaningful, notwithstanding contentions that state-owned enterprises do come from a number of countries and in a number of formats and I think often may actually potentially have other asset sales that may not meet the threshold of meaningful.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Given my earlier amendment and this one, I just want to clarify. I suspect state-owned enterprises aren't coming to Canada to buy photocopiers—I don't think we manufacture any—but that would be a different type of thing. That would be a normal procurement thing.
What is the definition when you say “substantially all of the assets”? What we're saying in the previous one that we just passed is “assets”. In this case, does that mean everything except a shell company, a holding company? If I were a Canadian mining company with a number of mining assets, for example, and I sold one mine to a Chinese state-owned enterprise, that's not substantially all the assets of that mining company. Would it then not be reviewable based on this amendment?
Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry
Our contention would be that the modifiers on assets allow for the implication that the investment would be reviewable and would allow for the review of transactions that involve meaningful parts of the business, and that it would actually include the types of asset sales you just described. That said, to suggest “any asset” would potentially stretch that concept into the territory of overpopulating the subset of concern.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Could I propose an amendment to this amendment that would remove the words “substantially all of the assets” and replace them with the wording that Mr. Schaan just gave, which is “meaningful assets”?
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Yes. It's to remove the words “substantially all of the assets” and replace them with “meaningful assets”.
I'm not a lawyer so I don't know if “meaningful” is a proper legal term, but you, Mr. Schaan, just talked about meaningful assets, which to me is very different from the idea of “substantially all of the assets”.
Liberal
The Chair Liberal Joël Lightbound
Mr. Perkins, I know you asked the officials a question. I'll let them collect their thoughts on this. What you're proposing is “under paragraph (1)(c) includes the acquisition of all—
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
It's “of meaningful assets” instead of “of all or substantially all of the assets”.
September 19th, 2023 / 4:35 p.m.
Liberal
The Chair Liberal Joël Lightbound
It's “of meaningful assets used in carrying on the entity's operations.”
Liberal
The Chair Liberal Joël Lightbound
I'm not sure that “meaningful assets” has a legal definition attached to it, but that's the subamendment proposed by Mr. Perkins—
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
I'm open to a better word to express “meaningful”. I don't think “substantially all” gets to the concept that Mr. Schaan was talking about. Saying “substantially all” means that if I have 10 mines and I sell one, that's not “substantially all” of my assets. It's 10% of my assets.
Liberal
The Chair Liberal Joël Lightbound
You asked the officials for their thoughts on your proposed subamendment.
Conservative
Liberal
The Chair Liberal Joël Lightbound
We'll wait to hear from them and see if you want to move that subamendment.
I will go to Mr. Schaan if he wants to intervene.
Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry
I think, Mr. Chair, that our “For greater certainty” would look at an investment to acquire, “in whole or in part”, the assets of an entity referred to in the paragraph. I think that “part” allows us to get at proper guidance, as opposed to the possibility of “meaningful”.
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Instead of “substantially all of the assets”, it would be “in whole or in part”. That would be more proper legal wording than what I was saying.
Senior Assistant Deputy Minister, Strategy and Innovation Policy Sector, Department of Industry
Yes.
Liberal
Conservative
Rick Perkins Conservative South Shore—St. Margarets, NS
Based on what the officials said, referring to the amendment, it would be “the acquisition of, in whole or in part, all the assets” referred to in that paragraph.
Liberal