Thank you, Mr. Chair.
Mr. Chair and members of the committee, good afternoon. My name is Mark Schaan, and I have recently been named the deputy director of investments, where I'm responsible for assisting the director of investments and advising the Minister of Innovation, Science and Industry on reviews conducted under the Investment Canada Act, or the ICA.
I'm accompanied by DeNeige Dojack, director of operations of the investment review division, or IRD. Among other things, the IRD is responsible for administering the ICA on behalf of the Government of Canada.
Thank you for the invitation to participate in the committee's study of the Canadian pulp and paper industry.
I understand not everyone is familiar with how the ICA works. So let me provide a general overview.
Foreign investment plays an important part in the Canadian economy, bringing new capital, technology and practices that can increase the productivity and competitiveness of Canadian firms. The ICA provides for the review of significant acquisitions of control of Canadian businesses by non-Canadians for their overall net economic benefit to Canada. The ICA also provides for the review of all foreign investments on national security grounds.
Under the ICA, a non-Canadian seeking to directly acquire control of a Canadian business valued at or above the relevant net benefit threshold must submit an application for review. The minister carefully considers each transaction subject to net benefit review on its own merit and approves foreign investments only if they are likely to be of net benefit to Canada according to the factors set out in the ICA.
It is worth noting that as a result of Canada's international commitments, indirect acquisitions by World Trade Organization investors, that is to say, where the Canadian business is acquired as the result of an acquisition of a corporation incorporated outside of Canada, are not reviewable under the net benefit provisions of the ICA.
The ICA also provides for a review of investments that may be injurious to Canada's national security. All foreign investments are subject to the national security review process set out in the ICA, regardless of value. The national security provisions set out a multistep process that involves numerous departments and agencies that have responsibility for protecting Canada's national security.
Through this process, the government is able to consider all the relevant facts and make a determination of whether an investment would be injurious to national security. Rest assured, the government does not put Canada's national security at risk for the sake of foreign investment. It should be noted here that the ICA is just one tool among many to ensure the protection of Canada's national security, including sector-specific tools.
National security reviews under the ICA are multistep processes, with strict deadlines and different legal thresholds for action at each step. From day one, national security experts, principally the Department of Public Safety and Canada's security and intelligence agencies, are fully engaged. To ensure that all security dimensions are considered, it also involves departments and agencies with specific expertise in the sector or industry in question, such as Natural Resources Canada. If the transaction does not meet the legal threshold to extend the review, meaning that the minister finds it not to be injurious to Canada's national security, then the national security review process ends.
As with all foreign investments, there was a thorough review of each of Paper Excellence’s investments involving the responsible government departments and their subject matter experts, and Canada’s security and intelligence community. In light of the information obtained with respect to each investment by Paper Excellence, no action was taken under the national security provisions of the act.
I am aware of media reports on Paper Excellence and its recent investments in Canada. While the ICA restricts our ability to provide details about the review, we can note that each investment is reviewed on its own merits and that this information has been taken into account as part of this process.
Canadians should know that our government is proactive in protecting their national security interests. The government does not hesitate to take decisive action, and our assessment of risk keeps pace with evolving economic and geopolitical circumstances.
Thank you, Mr. Chair. I'm happy to answer questions members may have.