Debates of Nov. 29th, 2010

Sustaining Canada's Economic Recovery Act

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, at committee last Tuesday when the minister and officials were there, I asked about the tax-free savings account that the member referred to in his speech. The amendments in this bill include things like: to make any income attributed, to deliver overcontributions and prohibited investments subject to existing anti-avoidance rules.

As the member laid out, there are about four or five different provisions amending the tax-free savings account regulations or legislation.

The question I had to the officials was whether or not they had considered if there would be any overcontributions when they first brought it in. Had they considered whether there would be any ineligible or prohibited investments? Had they considered the fact that, in their experience, there would be certain people who would figure out that the penalty of 1% may not be sufficient to deter overcontributions because returns greater than 1% could be received?

The response from the government officials was basically that there are these very sharp tax lawyers, et cetera, and they figure these things out.

I do not know whether the member agrees, but my point is that it would appear that in this particular case the government had not used due diligence in formulating the tax-free savings account rules and regulations. It caused a lot of grief to a lot of Canadians inadvertently. The government does not seem to have used the same kind of rigour and due diligence to make sure that proposed legislation, in the first place, was in fact given proper sign-off at all levels. That does not seem to be the case. In fact, it seems to be inept.

I wonder if the member would care to comment.

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Speaker, I thank the member, who is a valuable member of the committee. He did ask that kind of question, and we absolutely got that kind of answer. I remember making a comment, it may have been in camera, that that was the only answer the senior officials could give. That is why, in this kind of standing committee, it is a bit frustrating to ask questions to senior public officials because we know very well that although we have an excellent public service here in Canada, the officials can only give responses that correspond to what the government put in its bill or the government's tax policy.

Should the bill have some more teeth? Did the government look carefully at all the ways the law could be circumvented? We do not know. This is why tax laws have become so huge, because when a government introduces tax legislation, the main goal of tax experts, whether they are from law firms or major corporations, is to look for loopholes. That is why tax laws never last longer than a year or two. Then they need to be amended. That is how tax laws in Canada are created. Everyone knows that the goal of the vice-president of finance of a public corporation is to maximize profit, but the goal of the vice-president of finance or the CFO of a private corporation is to minimize taxes.

[Steven Fletcher, Conservative, Minister of State (Democratic Reform)]

Mr. Speaker, I would like to thank the member for his compliments to the government on the budget.

In this debate some discussion has been made around the The Economist magazine. I would like to quote from The Economist, this week's print edition, November 25. It said:

Compared with many other developed countries, Canada has had a good financial crisis. Its banks and public finances are sound, and the economy recovered quickly and strongly from recession....

I think this demonstrates the fact that the government has dealt with an extraordinarily difficult situation better than other countries in the developed world and throughout the world. Does the member agree with The Economist and virtually every other economist, profession-wise, throughout the world?

Also, does the member agree with the strong savings measures, like the tax-free savings account, the RRSP contribution issues and so on, to make it better and easier for Canadians to save for their future?

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Speaker, let us not get carried away. The minister said that I complimented the government. Hold on, now. Let us not jump to conclusions. All I said was that for this kind of technicality and this kind of technical bill, I was more or less in agreement. But let us not forget that the Minister of Finance was in favour of bank mergers. We should give the previous government credit for not letting banks merge. Of course, that government was later booted out of office, and deservedly so.

I also want to point out that some things are going well in Canada, such as securities trading, which works very well. Can anyone tell me why the government wants to mess with that?

Today we talked about how Quebec has been doing a good job of collecting harmonized sales taxes for the past 18 years. What does the government plan to do about that? I want to make one thing clear to the minister who asked me the question. When we say that we support this bill, he should not blow things out of proportion and say that the Bloc Québécois now supports the Conservative government. No, if the Conservative Party wants to form a coalition, it will find that other parties are much more inclined to form coalitions with it than the Bloc Québécois is. Something about that does not work.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, there is an important point that needs clarification in tonight's debate. The banks have been used as a model and have been upheld as making the right decisions, but I was here in the chamber when John Manley and the then Alliance tried to actually Americanize our banks. It is important to point out that the stability is here today because of a campaign to push against that and prevent it from taking place.

It is important to look at the fiscal capacity of Canada and the process we are doing right now. I would like the member's opinion. Is it because of the Liberals and the Conservatives voting earlier to make large corporate tax cuts, and it is interesting that the Liberals are now opposed to this, that we are actually borrowing money to do that and paying interest on it, similar to the HST, where there were $6 billion of expenditures federally to implement this new tax on Canadians? We will have to borrow for that and pay interest on it. I would like the hon. member's comments on those two issues.

[Daniel Paillé, Bloc, Hochelaga, QC]

Mr. Speaker, the NDP member is quite right to say that Canada has a huge fiscal capacity that has not been tapped into. Some say maximum tax rates have been reached, and that is true when it comes to poor citizens, but not in the case of corporations, and more specifically, banks.

There are six major banks in Canada. As required by the Bank Act, every year, around pages 140 to 150 of their annual reports, the big banks publish a list of their investments in tax havens and the tax savings they achieve by putting money in those tax havens. In this case, the left hand knows exactly what kind of savings the banks are achieving in tax havens, but the right hand is too stupid to ask for the information and to tax the banks' holdings in tax havens.

There is indeed a huge fiscal capacity in Canada. I agree with the hon. member that borrowing more to pay for certain things is not the answer. Last year, when we proposed realigning spending—which we will do again this year—by helping the forestry industry, for example, we also proposed new financing formulas to go after more of the available tax room.

[Thomas Mulcair, NDP, Outremont, QC]

Mr. Speaker, it is interesting to hear the Bloc Québécois support the Conservative government's budget policies, but it is also a little surprising. In fact, we have often stood alongside the Bloc to denounce, for example, the theft from the employment insurance fund. Bills C-9 and C-47 are spinoffs of this. The employment insurance fund is in there. For example, they are imposing new airline security taxes, which are inflating airline ticket prices in Canada. The Bloc is supporting that. There is a new regulation concerning the harmonized sales tax. The Bloc has not done anything to obtain compensation for Quebec for the harmonization it has already undertaken in this area. We are very surprised to hear the member for Holchega kowtow to the Conservatives once again and support the government's budget policies. We are very surprised by that.

Let us take a look at what is in Bill C-47, which the Bloc is supporting, and in the Conservative government's economic policy. Everything that happen in politics happens in a certain context. I would like to read a Reuters article from today, which was written by business journalist, Louise Egan.

I will read from this article from Reuters entitled “Canada record-high current account gap spurs worry”.

Louise Egan says this on behalf of Reuters:

Canada entered the club of countries with oversized current account deficits in the third quarter, posting the biggest shortfall on record as its worsening trade profile heralded a further slowdown in economic growth.

That is today.

Statistics Canada said on Monday:

The country's eighth consecutive quarterly shortfall in the current account--a measure of transactions in goods, services and investment income--totaled C$17.54 billion...compared with a revised second-quarter gap of C$12.98 billion.

Analysts surveyed by Reuters had forecast $15 billion.

What is interesting to note is that we are getting observations from people like Doug Porter at BMO Capital Markets, who said “Canada suddenly finds its broadest trade deficit in the company of countries that have typically been cited as extravagant over-spenders/under-savers”. He also said, “This may prove to be a passing phase but it is in fact an early warning that the country may be living beyond its means”.

In the days leading up to the G20 summit of the world's leading emerging and advanced economies, the U.S. treasury proposed capping current account surpluses and deficits at 4% as a way of achieving a better balance between surplus nations like China and debt ridden importers like the United States. We are above that 4% right now.

What we have to look at is how this fits into the overall budgetary plan of the Conservatives, such as it is. That is probably more of a compliment than they deserve to even mention the word plan when discussing the tragedy that has been visited upon the Canadian economy in the past five years since the Conservatives came to power.

We occupy the second largest land mass in the world and we have only 35 million people to try to give that value. That has always required the understanding of a government that placed value on the creation of jobs, on the creation of long-term growth and on the idea that we would try to go into those sectors of the economy that were the most forward-looking and the most productive. The Conservatives will have none of that.

The Conservative ideology is that anyone who seeks to have the government take a look at the economy, to balance it out and to have it grow long-term and make sense in some way is trying to pick winners. Their central thesis is a pristine marketplace that effectuates the best choices in all circumstances.

What we have had is an across the board tax cut being proposed by the Conservatives since they arrived in power. That is their panacea. That will solve all the problems. There is one slight difficulty with that. Any company, especially in the manufacturing field, that was not making a profit had not paid any taxes, so they did not get anything from the Conservatives tax decreases. The most profitable companies received those tax decreases, companies in the oil sector. The banking sector saw the same thing.

We will see a bit later this week the most recent quarter of bank profits, but for the first nine months of this year, Canada's chartered banks made $15 billion in profit. That is not because they are clever managers. It is because they have a quasi monopoly and they can charge people basically whatever they want, especially since the Conservatives came into power. Paying 25% on a credit card is no problem. Banks gouge customers every time they go to the banking machine. No problem. Why not? As far as the Conservatives are concerned it is normal to give a tip to the bank president every time someone accesses money at an ATM.

The real problem is the Conservatives have been destabilizing the erstwhile balanced economy that Canada had so painstakingly built up since the second world war. They are doing it by giving these across the board tax cuts, blind to any notion of productivity, blind to any notion of the creation of stable, long-term jobs which would allow people to raise a family. That is a thing of the past. As far as Conservatives are concerned, the market can decide.

When companies like Encana and Enbridge get millions of dollars in windfall because they have had a reduction in their taxes, we are still hollowing out the manufacturing sector. We are superheating the petroleum sector, bringing in an artificially high number of U.S. dollars, putting increasing pressure on the Canadian dollar, something that the textbooks refer to as “the Dutch disease”. This was after the situation that existed in Holland in the 1960s where the discovery of gas meant that a large number of foreign currencies were coming into the country, pushing the guilder ever higher. All of a sudden the Dutch realized that what was supposed to be manna from heaven was in fact destroying their economy because they could no longer afford to export their goods.

When we look at today's StatsCan figures, we realize the only thing that Canadian companies are spending is on equipment coming in from other countries. We can no longer produce on a competitive basis. Our manufacturing sector is being hollowed out. It is interesting to note that StatsCan, shortly after the Conservatives came to power, almost in a defensive statement, which I have never seen anything like it from StatsCan, said Canada was not suffering from the “Dutch disease”. When somebody bothers to use a term like that and then to affirm that it does not apply, my radar is automatically starting to ping. Why is it even mentioning it if it is not the case? That statement was made in 2006.

Between 2004 and 2008, in other words in 2008 before the current crisis hit, StatsCan put out new figures that showed precisely the opposite of what it had affirmed two years earlier. Between 2004 and 2008, Canada, mostly in Ontario and Quebec the industrial heartland, had bled off 322,000 good paying manufacturing jobs. The prime reason for that was we failed to internalize the costs of the oil sands. Instead of taking the fiscal space that was available and trying to help those sectors of the economy that needed it the most, we were giving the money to those sectors of the economy that were already making the largest profits.

How did we create the fiscal space for the $60 billion in tax increases that had been given to Canada's most profitable corporations? It is not very complicated. The Conservatives finished off the job started by the Liberals. They took $57 billion out of the employment insurance account and transferred it to general revenues of the government. A lot of people would look at that and say “so what, who cares”, that it was government money before and it government money after, but there is a huge difference. Every company, whether they were making money or losing money, had paid into that EI account as had every employee. We had that $57 billion purpose built, dedicated to take care of the inevitable cyclical aspect of the job market in Canada and when the recession hit, there would be money there to pay people employment insurance benefits.

The Conservatives cleaned out the account and now there was no more money there. There is going to be a $15 billion deficit that is going to have to be paid back again by all companies. Whether they are making profits or not or whether they are paying taxes or not, they are going to have this payroll tax for every job in their companies. That is what the Conservatives did. They created that fiscal space to give the tax decreases to the most profitable corporations by looting the employment insurance account, by taking the money that was there to create the fiscal space to do it.

When we talk about sustainable development, the notion that comes most immediately to mind is the environmental aspect. That is after all the driving force behind the United Nations report by Brundtland, the former prime minister of Norway. He put together this important report with a view to the Rio summit in 1992. That was a way of saying every time the government had to come to a decision with regard to a problem, it had to look at not only the environmental but also at the social and economic aspects.

As we have cleaned out the manufacturing sector in Canada, we have shovelled forward onto the backs of future generations not only the environmental debt, which I will talk about in a minute with regard to the tar sands, but we have shovelled the financial and fiscal burden onto their backs. Hundreds of thousands of people will be coming to retirement in the next decades. They will no longer have a proper pension plan. At least in the manufacturing sectors those used to be provided for. We have seen what has happened to companies like Nortel, but more generally, employers that take over companies in Canada with the complicit attitude of the Liberals especially and the Conservatives, the first thing they go after is the pension plan of their employees. That is for the social aspect.

However, let us look now at the long-term deficit with regard to the environment and how that is continuing to cause one of the biggest problems in the Canadian economy. One of the basic principles of sustainable development is we have to internalize the costs of the environment. These are basic principles like user pay, polluter pay. We have to ensure we look at the life cycle analysis of anything that is put on the market.

Right now we are as guilty as a company that is manufacturing a product that is pushing all of its garbage into a river and claiming that it is making a good profit because it can sell cheaper, the way we are developing the tar sands. Right now we have a way of developing them which means we are not cleaning up the mess, we are not including it in the price. We are not even including the price of attempts to go after carbon capture and storage. That is being left on the general tax burden on the backs of every Canadian.

We have an unusual situation. We claim that we have the strategic resource that we are exploiting in the public interest, but in fact we are leaving a huge environmental burden on the back of future generations in addition to the fiscal and financial burden.

I talked about the $57 billion looted from the EI account. I talked about the $60 billion in tax reductions for Canada's richest corporations. It is no coincidence that Conservatives have also racked up the largest deficit in Canadian history also to the tune of $60 billion, and the three are related.

If we continue like this, we will have hollowed out manufacturing sector, we will have become, for all intents and purposes, a third world country relying almost exclusively on the exploitation and extraction of resources that we pump to our neighbours as quickly as possible. That is not a figure of speech, that is literally the case.

Let us look at what we have done with the tar sands. There are projects like Keystone, Alberta Clipper, Southern Lights and we are putting in these pipelines. The Conservatives had them approved rapidly since they became government. They have scrapped the Navigable Waters Protection Act since they came to power. Just recently, they scrapped the whole environmental assessment process in Canada to send it over to the National Energy Board, which has no experience or expertise in the matter, to ensure these large energy projects get approved as quickly as possible.

Then the North American Free Trade Agreement moved in to provide its impetus in all of this. Under the North American Free Trade Agreement, there is a proportionality clause that means, essentially, that once we have started exporting the raw bitumen in such large quantities to the United States, we cannot reduce the quantities we export unless we reduce what we send to ourselves.

An independent outside analysis of just one of those projects, the Keystone project, concluded that there were 18,000 jobs being exported to the U.S. at the same time. Like a third world country, we do not even add the value here. There is no processing. Nothing is added. There is no refining. We are not doing anything with it to create permanent, long-term jobs here. It is a shameful way of destabilizing the balanced economy that we have built up since the second world war.

The government has always argued that it is not what is really happening, that those of us who say that the government can and should play a role in building a stable economy are trying to pick winners. The Conservatives have chosen their winners and it is the oil companies and the banks. People are going to pay for those lousy choices. Instead of looking at the most productive jobs and the most forward-looking parts of the economy, things that could be helping us for the future, creating a system of green renewables across the country, that is all going to be lost.

We have had an extraordinary occasion for the past five years to do something for future generations, but the vituperative, closed, narrow-minded attitude of the Conservatives has meant that they spew their venom at those who want the government to do something right with the economy. They claim to be doing a good job, but today's Reuters article, which will be in various forms in all of the economic papers across Canada tomorrow, prove just the contrary, that what the NDP has been saying for years in the House, that the Conservatives are destroying the balanced economy that Canada built up since the second world war, is in fact true.

The NDP is not alone in saying that Canada is suffering from the Conservatives' political and economic choices. It is now proven by today's statistics from Statistics Canada. That is why the NDP has no issues with saying that Bill C-47 will never receive our support, no more than Bill C-9 will, because it reflects the Conservatives' overall budget policy.

Earlier, I listened patiently to the member for Hochelaga, who said that the NDP was going to vote against, but he did not know why. I will return the compliment to my friend and colleague, the member for Hochelaga, by saying that, aside from general remarks about Bill C-47—he seems to have plenty to draw on—it would have been nice if he had told us exactly which clauses in Bill C-9 he likes. Furthermore, with everything we now know about the awful consequences of emptying the employment insurance fund, how can he support a bill that deals yet another blow to employment insurance? How can he support a bill that imposes yet more taxes on people who buy airplane tickets? How can he stand there and vote on the harmonized value-added tax without saying a word about how Quebec was the first province to harmonize its taxes? I was in the National Assembly when that happened. When the maritime provinces later did the same thing, I was there, and I saw how Bernard Landry reacted, with good reason, by saying that Quebec had already harmonized its taxes and was entitled to the same compensation the maritime provinces received.

They said the rules had changed. Even though Quebec was the first, its harmonization was not the same as theirs, so only the maritime provinces would receive compensation. It just so happens that the maritime provinces were about to vote in a federal election, and the Liberals really needed their support.

Then the same thing happened in British Columbia and Ontario. We have already spoken out against that, and we know how the story played out. Still, they said that the rules had changed again.

For all of these reasons, the NDP will once again vote against the Conservative government's budget policies.

[The Deputy Speaker, Conservative, Andrew Scheer]

The hon. member for Outremont will have two minutes to complete his remarks the next time this bill comes before the House.

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

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, I rise today to speak on a question I asked the Minister of National Defence regarding the changes to the veterans charter and the lifetime monthly pension that would be unfair to veterans coming back from Afghanistan. The minister seemed rather open to this. I took part in an emergency debate during which the minister said he wanted to rectify the situation and he admitted that mistakes had been made. Upon reflection, the minister said he would present new measures in order to correct the situation. He told us that the amount could be improved or could be more equitable to veterans.

However, we see that the minister did not listen to the people from all the opposition parties who spoke during that debate. He is not changing the lump sum payment, even for people who are seriously injured. That amount has not been increased, which is all the more serious because it is meant for people who are 20, 21 or 22 years old. The only thing the minister promised was that the lump sum payment would be spread out, that it could be divvied up per month or per year, according to the wishes of the injured soldier. We cannot accept these new measures; they are too little.

A pre-tax income of $40,000 has been established, making between $536 and $1,609 payable depending on the type of injuries claimed by veterans in their applications. In the case of psychological injuries, it is very difficult to clearly establish an individual's inability to return to work.

I talked about Ms. Matteau's son, who lives in the riding of Québec. Before the new charter, he would have received $5,400 per month; with the new charter, he received a lump sum payment of $100,000. The maximum could have been $276,000, but it was not established that all his injuries prevented him from returning to the job market. This is clearly not enough and we cannot accept these new measures. A number of people are worried about the new measures the minister has taken, even though he said he wanted to fix things. Mr. Stogran, the former veterans' ombudsman, is concerned that Afghanistan will become our Vietnam if nothing is done.

These measures are unsatisfactory. A number of people who are observing the minister's new orientation are concerned that, with these measures, many veterans will depend on their families for life. For a 20 year old who can no longer work and will never have the income that would have been earned if—

[The Deputy Speaker, Conservative, Andrew Scheer]

The hon. Parliamentary Secretary to the Minister of Veterans Affairs.

[Greg Kerr, Conservative, Parliamentary Secretary to the Minister of Veterans Affairs]

Mr. Speaker, our government has the needs of our veterans at heart.

The Minister of Veterans Affairs has made the issue surrounding the lump sum payment one of his priorities. That is why legislation was recently tabled by the minister to address any issues around this award.

If the bill is passed, veterans who receive a disability award will have the choice between annual payments spread out over the number of years of their choice with interest; part of the award as a lump sum and the rest as annual payments over the number of years of their choice with interest; or a single lump sum payment. This is what we heard often in the veterans affairs committee, that the young vets wanted these changes available to them.

Furthermore, at any time, veterans who so choose may change their minds and receive the remaining amount as a lump sum payment.

I would like to remind the member opposite that the lump sum payment is just one piece of the new veterans charter. I remind her of this today because the media and others seem to think there is only one financial benefit. That is simply not the case. The lump sum disability is not meant to replace salary, and it is not meant to be a recurring monthly income. Instead it recognizes and compensates Canadian Forces members and veterans for the pain and suffering, functional loss and the effects of permanent impairment of service-related disability. There is a whole range of services and other financial supports available that help our veterans get back into civilian life.

Eligible veterans also receive a monthly earnings loss benefit, up to 75% of their pre-release salary, while they are in rehabilitation. The legislation tabled by the minister increases the earnings loss benefit to ensure veterans in need have an adequate monthly income.

The most severely injured veterans, who cannot return to work, will also benefit from the widened eligibility for the permanent impairment allowance, which is currently paid in the amount of $536 to $1,609, and the additional $1,000 per month that has been recently announced by the minister.

Finally, veterans are also offered a full range of benefits and services, including practical help finding a job, psychological and physical rehabilitation and health care coverage.

As recent announcements indicate, the new veterans charter can and will be modified to ensure the needs of our Canadian Forces members, our veterans and their families are met. It is a living document, and we will continue to make improvements in the future.

The new veterans charter provides the supports necessary for veterans and their families to return to the best life possible. The Government of Canada continues to work on all avenues to provide the best care for our veterans and their families.

At the end of the day, our brave men and women in uniform deserve our respect.

Our government is here for veterans and here for Canada.

[Christiane Gagnon, Bloc, Québec, QC]

Mr. Speaker, he explained the minister's point of view, but it is still the same. Many stakeholders have taken a close look at the situation and know the impact that injuries can have when a soldier returns from combat. There are many newspaper articles about this. I have also spoken to people who are following this issue closely and they are saying that the minister is not doing enough. There is also the fact that the government is not increasing the amount of the lump sum payment. It is too little in relation to the injuries they have sustained. These people are often unable to return to work. Psychologically, they are unable to get their personal or professional lives back on track.

The limit on benefits has not been reviewed. The government gives a one-time, lump sum payment of $100,000. Even if the young person says he will take it—

[The Deputy Speaker, Conservative, Andrew Scheer]

The hon. parliamentary secretary.

[Greg Kerr, Conservative, West Nova, NS]

Mr. Speaker, the maximum lump sum disability award recognizes pain and suffering and is worth over $270,000. It is only one part of the new veterans charter.

Veterans in need have access to a broad range of programs. The improvements tabled by the minister broaden the benefits and the access to some of these programs.

If the legislation is adopted, on top of the lump sum disability award, our most seriously injured veterans who are no longer able to work will receive at least $58,000 a year. These changes will impact thousands of veterans.

The new veterans charter is designed to be there for our veterans when they need it and we are here for our veterans.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, it is a pleasure to rise again on a very important issue, the Investment Canada Act.

I asked a question in this chamber on October 26 related to BHP's takeover bid on PotashCorp. I want to thank the great Canadians who supported our campaign, and especially the Saskatchewan NDP that fought so hard to make sure this takeover did not take place.

It is important to note that the Investment Canada Act is the trigger point on how to do these types of acquisitions and is the backstop for the investment as to whether it is of net benefit to Canada. That legislation is so poorly crafted that it has created serious vulnerabilities for Canadians, not just in terms of the companies that have been built up and basically been sold off, but also, on top of that, the jobs, value-added jobs in particular, that we have.

I want to point out that the present government is responsible for that poor legislation because it added changes to the legislation in a budget bill, so it did not get a chance to go to committee. It did not have a chance to hear from Canadians, be it the business community, the workers or others who are experts in this law, and have that input to look at the changes that were going to be made.

That denial of the proper democratic process is like Americanizing our legislative process by attaching what in the U.S. is called a rider bill to legislation. It has very much been at the expense of our business community and our economic development.

One of the key things that needs to be recognized is that the minister is now talking about reviewing the Investment Canada Act, especially after an NDP motion and debate has already taken place.

The reality is that the government is responsible for this hollowing out that has taken place and it has done so without even consulting the business community that wants to be consulted on this. There are many economists and other business people who want to be part of a process to modernize the Investment Canada Act.

Back in 2003, I fought vigorously against China Minmetals, because here we had a non-democratic state government that was actually going to take over Canadian companies. I thought that was wrong.

How do we have that process? How is it that Canada cannot own its own oil shares through Petro-Canada? The previous Liberals actually sold our last bit of shares in Petro-Canada. We actually lost money on that because a month later it went up incredibly. On top of that, a non-democratic government can actually own Canadian oil projects, which it is now purchasing across the land.

I want to be clear that the government has a responsibility to modernize the Investment Canada Act through legislation to make it more clear, more accountable and to have more net benefits. When we look at Stelco, Inco and Vale, we had all those terrible deals where we had tons of problems from those takeovers at the expense of working class Canadians. It is unacceptable and the government is responsible for those things.

[Deepak Obhrai, Conservative, Parliamentary Secretary to the Minister of Foreign Affairs and to the Minister of International Cooperation]

Mr. Speaker, let me begin by stating that foreign investment plays an important part in the Canadian economy. Foreign investors bring capital, knowledge, capabilities, technology and other resources which can increase the productivity, efficiency and competitiveness of Canadian firms. Their investments help businesses to expand and create jobs for Canadians.

Indeed, Canada has one of the most open investment regimes in the world. In order to ensure that Canadian firms have access to investment opportunities abroad, it is important for Canada to maintain an investment climate which encourages the free flow of investment.

Canada has a broad framework in place to promote trade and investment while protecting its interests. This includes the Investment Canada Act, which provides the Minister of Industry with the power to review significant foreign investment proposals. The review threshold for WTO members is currently $299 million in book value of the assets of the Canadian business.

Where a proposed investment is subject to review under the act, the investor cannot implement the investment without the approval of the minister responsible for the act.

The Minister of Industry approves an application only when he is satisfied that the transaction is likely to be of net benefit to Canada. In making this determination, the minister must consider the factors listed in section 20 of the act. These include: the effect of the investment on the level and nature of economic activity in Canada; the degree and significance of participation by Canadians in the Canadian business or new Canadian business; the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada; the effect of the investment on competition within any industry or industries in Canada; the compatibility of the investment with national industrial, economic and cultural policies; and the contribution of the investment to Canada's ability to compete in world markets.

As part of the review process, the Investment Review Division of Industry Canada consults with federal government departments with policy responsibility for the industrial sector involved, with the Competition Bureau. and with all the provinces in which the Canadian business has substantial activities or assets.

The Investment Canada Act is in place so that major investments are properly reviewed to ensure they are in the best interest of this country and, when they are not in the best interest of this country, this government will not hesitate to block a transaction.

BHP Billiton has withdrawn its application for review and informed its shareholders of this decision. Under the Investment Canada Act, this terminates the review process because there is no longer a transaction to review.

[Brian Masse, NDP, Windsor West, ON]

Mr. Speaker, the former BHP chairman talked about foreign investment in Australia. He referred to Canada by saying that too much can actually result in Australia becoming a branch plant just like Canada is.

The problem is that we still do not have proper legislation going through this House. We have mentioned a number of different situations that have affected many value-added jobs in Canada.

For example, the government refused to act with Falconbridge and Inco. Also, we just needed a delay when U.S. processes were forcing the Xstrata situation to go on further, and it was the U.S. that was doing that. The government could have acted, but it did not, and we have lost a national champion in mining.

We saw the results with Vale workers being thrown out on strike for over a year. That is unacceptable. It is trying to bring Brazil standards into the Canadian market as opposed to looking at improvements for workers and productivity in this country.

This government has a duty to--

[The Deputy Speaker, Conservative, Andrew Scheer]

The hon. Parliamentary Secretary to the Minister of Foreign Affairs.

[Deepak Obhrai, Conservative, Calgary East, AB]

Mr. Speaker, the Investment Canada Act is in place so major investments are properly reviewed to ensure they are in the best interests of this country and, when they are not, this government will not hesitate to block them.

BHP Billiton was just one case. The policy of our government has always been clear. We welcome international investment for all the benefits it brings, including new ideas, sources of capital and job creation.

[The Deputy Speaker, Conservative, Andrew Scheer]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m. pursuant to Standing Order 24(1).

(The House adjourned at 6:46 p.m.)