Debates of Dec. 1st, 2009

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, on October 5 I posed a question to the government regarding the ethical conduct of the Minister of Natural Resources.

In response to my question on October 5, the Minister of Transport said:

We have brought in the toughest accountability rules in the history of this great country. We are committed to running a clean, open and transparent government....

However, this is obviously not the case, as the Ethics Commissioner has now called for a full inquiry into the ethical conduct of the minister, based on the evidence obtained by her in a preliminary inquiry.

There are a number of questions to be asked and the government continues to stonewall by saying it wants to wait until the Ethics Commissioner finishes her job.

However, the fact remains that under subsection 41(1) of the Canada Marine Act, the Minister of Transport, who is responsible for the port authority, has the authority to ask for a special review. It is his own authority and it can happen as often as he wishes.

There are questions to ask of the port authority board. The central questions include the following. Why was so much money spent on luxurious meals? Some $50,000 was spent by the Minister of Natural Resources in her role as the president and CEO of the Toronto Port Authority at the time and by other senior managers at the plush Harbour Sixty Steakhouse located downstairs in their office building over the eight months of 2008. That was $50,000, including one $9,000 lunch for 50 people on one particular day. Just exactly what costs so much? Who was present? What was discussed? What port authority business was conducted at those meals to possibly justify those expenses? What was the expense approval policy in force at the time? What evidence is there that the policy was honoured?

Why did the chair of the board of directors, Mr. McQueen, cast the deciding vote in January 2009 to suppress an inquiry into another $65,000 spent by the Toronto Port Authority to give legal advice to him and to the Minister of Natural Resources in her prior role as president and CEO of the port authority? The inquiry was supposed to determine whether the advice was personal to them and, therefore, improperly paid for by the Toronto Port Authority, or to the benefit of the port authority and, therefore, properly disclosed to the port authority board.

Finally, there also is the question of why were the board minutes doctored by the chairman, Mr. Mark McQueen, last December, six months after they had been approved by the then board of directors when he was not even the chair? I am pretty sure approved minutes should not be altered. It appears that it is meant to cover up political interference and improprieties, and the government is co-operating.

If the government does not call a special review, which the Minister of Transport is authorized to do, notwithstanding the conclusions of the Commissioner of Ethics, clearly the government is not part of the solution but part of the problem and is participating in a cover-up.

[Pierre Poilievre, Conservative, Parliamentary Secretary to the Prime Minister and to the Minister of Intergovernmental Affairs]

Mr. Speaker, allow me to begin by thanking the hon. member for Mississauga South for posing the question and for being here at this late hour to contribute to the debate.

Our government takes these allegations very seriously. This government prides itself on accountability and transparency. That is why we strengthened the powers and responsibilities of those arm's-length agencies that are charged with investigating such matters.

The Minister of Natural Resources continues to co-operate fully with the Ethics Commissioner. The minister is following, and will follow, the commissioner's ruling and guidance.

The issue is still being examined by the Ethics Commissioner and therefore it would be inappropriate for me to comment.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, the issue here is that the minister has responsibility for the Toronto Port Authority separate and apart from the issues related to the Minister of Natural Resources.

When there are allegations of wrongdoing, when there is improper use of government-funded resources for political fundraising, when there are doctored board minutes, when there is lavish spending on steak dinners for 50 people at a cost of $9,000, the board has an obligation to protect the assets and to act responsibly. Clearly, this is not the case.

This is now a matter between the Minister of Transport and the board of directors of the Toronto Port Authority. He has that responsibility. He must look into it. If he does not, then he is doing so wilfully to cover-up.

[Pierre Poilievre, Conservative, Nepean—Carleton, ON]

Mr. Speaker, as I said earlier, the Minister of Natural Resources continues to co-operate fully with the Ethics Commissioner. The minister is following and will follow the commissioner's rulings and guidance. The issue is still being examined by the Ethics Commissioner and therefore, it would be inappropriate to comment.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, I rise to follow-up on a question with regard to the sale of Nortel industries to Ericsson. At the time we advocated that Nortel be examined under the Investment Canada Act and that the Investment Canada Act should be triggered for a couple of reasons. One of those was the national security clause that is now part of the Investment Canada Act.

It is important that I note that the Investment Canada Act was recently changed in a government budget bill. What that meant is it did not have the full due diligence normal legislation has when it is updated in the House of Commons. It did not go to committee. We did not have witnesses. It was part of a budgetary allocation. Hence, the new model is exposed in many ways. It is weakened and has actually caused part of the problems.

The Investment Canada Act has a new provision called the national security clause, as I have noted. It is important in this case because the type of information and the type of department that was sold by Nortel to Ericsson was sold for over $1 billion. Then shortly thereafter, the argument came from the company, because of the way that the new legislation is written, that it could write it off as being less that $300 million, and hence not subject to the financial arm of the Investment Canada Act. However, that does not take it away from being under the national security clause.

There was good solid testimony provided at the committee hearings by the military and also the security aspects of Nortel in this LTE technology, which is fourth generation streaming capability for the service provision of communications.

I am going to read a submission from RIM which is an expert with regard to this type of technology and its applications, and where it believes the security aspect is involved. It states:

Military: Communications, mapping, GPS, telematics and advanced applications such a military commanders viewing real-time video of military and peacekeeping operations across Canada (including the strategic Canadian Arctic) and internationally.

Security (Police/Fire/Ambulance): Tracking, police/fire/medical vehicles and assisting with real-time route-planning to avoid high traffic flow areas and emergencies. Real-time downloading of suspect details (pictures, evidence on file, etc.) to assist with police investigations. Assisting with controlling points of entry (airports) and security critical facilities. In the U.S. many homeland security programs, including counterterrorism and border security initiatives, rely heavily on wireless infrastructure.

That is why we believe that this review should have taken place by the minister under national security clauses. Even in the United States, it has greater scrutiny than we do.

I would point to the really interesting situation of Certicom which was purchased by RIM. This was a Canadian company that was purchased by another Canadian firm, but that actual transaction had to have hearings in the United States, a foreign government, before the actual sale went across.

That is what is ironic. The due diligence is done in the United States related to its national security even for companies that are not even national companies in the United States and do not even have facilities in the United States, but here in Canada we just wash our hands from it and see it go out the door.

[Mike Lake, Conservative, Parliamentary Secretary to the Minister of Industry]

Mr. Speaker, I am pleased to rise in the House to respond to the concerns expressed by the hon. member for Windsor West about the acquisition of certain Nortel assets by Ericsson, a Swedish-based telecommunications company.

In the economic action plan, Advantage Canada, and in budget 2007, the federal government committed to undertake a review of Canada's competition policies and its framework for foreign investment policy. To deliver on these commitments, in July 2007 the government created an expert panel chaired by Mr. Lynton Ronald Wilson.

The panel conducted extensive consultations. In June 2008 it released its final report and recommendations aimed at raising Canada's overall economic performance through greater competition to provide Canadians with a higher standard of living.

One of the panel's key recommendations was that we narrow the scope for intervention on economic grounds under the Investment Canada Act. The panel also found that it would be in Canada's best interest in a post-9/11 world to incorporate a national security test into the act.

We moved very quickly to address these and other key recommendations in the report.

Last winter, the Budget Implementation Act, 2009 brought about reforms to the Investment Canada Act, including a national security review mechanism. Before this legislation, Canada was the only major developed country that did not have the authority to review foreign investments on the basis of national security concerns. Now we do.

It is important to understand the process undertaken to conduct a national security review. I would like to take a minute to explain this process.

Under the new national security provisions of the Investment Canada Act, a foreign investment, regardless of its dollar amount, may be subject to review. An investment is reviewable if, after consultation with the Minister of Public Safety, the Minister of Industry considers that the investment could be injurious to national security. He refers the investment to cabinet and it makes an order to review the investment. If cabinet orders a review, the Minister of Industry is responsible for leading it, in consultation with the Minister of Public Safety.

At the end of the review period, if there are grounds for further action, the minister would submit a report with recommendations to cabinet. Cabinet has the authority to take any measures in respect of the investment that it considers advisable to protect national security.

With respect to the acquisition of Nortel's CDMA and LTE assets by Ericsson, the government did examine the national security implications of this transaction. The Minister of Industry consulted with the Minister of Public Safety and the Minister of Foreign Affairs. Based on all of the information presented to the Minister of Industry, there are no grounds to believe that this transaction could be injurious to Canada's national security.

In closing, foreign investment is an important driver of economic success. It stimulates job creation, technological development and economic growth. It is therefore critical that we send the strongest possible signal to investors around the world that Canada is a safe and stable place to do business.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the issue with regard to national security is something that I actually raised back in 2002. It was objected to by the Conservatives and the Alliance. It was about China Minmetals Corporation. I have long pushed for that review in this chamber.

Unfortunately, we did not have the due diligence of it going to committee and it has created many loopholes and weaknesses in that legislation and the review. That is the reason it was put in a budget bill, because it was not worth the paper it was printed on.

It is interesting with regard to the national security file, because there was an investigation of Vodafone in Greece. Its networks were corrupted and it actually saw the loss of information from its military, its police and its elected officials. An investigation disclosed that unauthorized interception software had been installed on Ericsson switches used by Vodafone in Greece. We have a specific case here related to Ericsson where its systems were manipulated and changed. That is why we need to have this full review and accountability.

[Mike Lake, Conservative, Edmonton—Mill Woods—Beaumont, AB]

Mr. Speaker, after a careful examination of the Nortel-Ericsson transaction, the minister determined that based on provisions of the act, the sale of Nortel's CDMA and LTE assets to Ericsson is not subject to a net benefit review under the Investment Canada Act because it does not meet the economic threshold for review under the act.

In terms of national security, the Investment Canada Act stipulates that a foreign investment, regardless of its dollar amount, can be reviewed.

As I have said, the Minister of Industry, after consultation with the Minister of Public Safety and the Minister of Foreign Affairs, concluded that there is no basis for review of the Nortel-Ericsson deal for national security concerns.

We must ensure that Canada is open for investment and for new jobs and new opportunities. We must ensure that around the world, Canada continues to be seen as the best place in the world to do business.

[The Acting Speaker, Conservative, Barry Devolin]

The hon. member for Winnipeg South Centre not being present to raise the matter for which adjournment notice has been given, the notice is deemed withdrawn.

The motion to adjourn the House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow at 2 p.m. pursuant to Standing Order 24(1).

(The House adjourned at 7:03 p.m.)