Debates of Nov. 4th, 2010

Opposition Motion—Foreign Takeovers

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I want to thank the member for his comments today. The fact of the matter is that it was the previous Conservative government of Grant Devine in Saskatchewan that privatized Potash Corporation of Saskatchewan on November 2, 1989. It is a corporation that was very successfully operated for many years under the ownership and management of the people of Saskatchewan, and the ideological Conservative government of Grant Devine privatized it in 1989. What did the federal Conservative government of Brian Mulroney do at the time? No concerns were expressed at all. The Liberal opposition did not seem to be concerned about it at all. That was the beginning of the problems with regard to this particular deal.

The statistics overall point to a very sorry record of successive Conservative and Liberal governments. For example, in 1,638 foreign takeovers, there were 334 just last year alone and only one was disallowed by the Canadian government. In 2009, the government reviewed only 22 out of 338 takeovers, according to Industry Canada. In one year alone, 2006, foreign control over Canada's mining sector rose from 12% to 40%. Between 1985 when the Investment Canada Act came into force under Brian Mulroney and September 30, 2010, Industry Canada reviewed, once again, 1,638 foreign acquisition worth almost $600 billion and approved all but one.

So the fact of the matter is that, historically, whether it is Conservative or Liberal, it is the same thing.

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, I agree with the member; the Conservatives and the Liberals are like two peas in a pod. The member also said that Potash Corporation was a crown corporation before it was privatized in 1989.

The Bloc Québécois respects the responsibilities of the provinces and Quebec, and it is up to each province and Quebec to choose how such corporations are managed. Quebec has Hydro-Québec, a crown corporation which is considered a jewel and of which I am proud. It is a crown corporation that manages a natural resource.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I come from a riding that knows this Investment Canada Act all too well, unfortunately.

Xstrata, which was Falconbridge, and Inco, which is now Vale, have both seen the net benefit. The net benefit has been 686 job losses in February 2009, 400 job losses at Vale in May and a year-long strike. I can continue to talk about job losses, and I can continue to talk about layoffs, but the thing that has been very clear is that my city and my community has been ravaged.

There has been no net benefit to families who have to find a way to keep their homes and no net benefit to families who are not able to send their children, their teenagers, to college or university because they have lost their job.

This net benefit needs to be clear. I got elected two years ago, and when the first layoffs came around, it was six months in. I said we would look at the Investment Canada Act and the agreement and find out what we could do to protect the jobs.

What I was told by the government was that it was a confidential agreement and I could not see it. However, it was allowing a corporation to lay off 686 people, with 686 families affected.

I would like to ask the hon. member this. How does he think it is fair to keep these agreements hidden from the Canadian public, who we represent?

[Robert Bouchard, Bloc, Chicoutimi—Le Fjord, QC]

Madam Speaker, the case that the member just presented could be considered plausible. It is not fair. I think that this transaction was grossly mismanaged. The minister at the time should have fixed undertakings and conditions for the company prior to the transaction. There should have been conditions—for example, a certain number of jobs—or else the transaction would have been cancelled.

That is what we are calling for. The motion also calls for a minimum amount of transparency so that the public can be informed. The minister must pay attention. The Investment Canada Act allows the minister to listen to what the Quebec and provincial governments, the community and the workers are calling for and to fix undertakings and conditions before the transaction takes place. That is what we need. The minister must defend the public.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Madam Speaker, I will be sharing my time with the member for Sudbury this morning.

I am delighted to participate in today's debate on our NDP motion to amend the Investment Canada Act. It is a debate that is long overdue in this country, and last night's interim decision on the sale of PotashCorp only reinforces that point.

The industry minister said that there is “likely no benefit” to Canada and Canadians but that BHP Billiton has 30 days to respond. The very use of the word “likely” suggests that there may be some doubts still in the mind of the minister, but we will never know for sure because everything is happening behind closed doors. There is no transparency. Without transparency there cannot be any accountability.

We will never know why the government is rejecting the BHP Billiton bid for PotashCorp, nor will we ever know why it has rubber-stamped so many other takeovers in the past. Yet this is a critically important issue for literally thousands of Canadians and communities from coast to coast to coast.

It is the Investment Canada Act that creates the legislative framework for the review of proposals for foreign takeovers of Canadian companies. It is this law that requires the government to turn down such proposals if they are of no net benefit to Canadians.

Since 1985, more than 13,500 Canadian firms have fallen to foreign interests under successive Liberal and Conservative governments. Until last night's partial rejection of a bid only one foreign takeover application had ever been turned down before, and that was the bid for MacDonald Dettwiler. MacDonald Dettwiler of course is the company that produced the Canadarm and other strategic space technologies, which were sought after by a U.S. weapons contractor. Thankfully that takeover bid was denied, but it was the exception, not the rule.

An astonishing 87% of foreign takeovers were approved without ever being reviewed. How could it be otherwise when in the entire federal government there are only 11 people charged with the responsibility of reviewing the hundreds of proposals coming forward, and 2 of those staff are in clerical positions? By default, Canada's businesses have become ripe for the picking.

No one is safe. Foreign interests have already absorbed Canadian icons like Stelco, Molson, Labatt, Inco, The Bay, Falconbridge, Alcan, Nortel and even the Montreal Canadiens.

Canada as we know it is simply slipping away. Foreign-based companies are gaining more and more control over our strategic industries like steel and nickel, as well as our energy reserves, natural resources and cultural industries. Over and over again, Liberal and Conservative governments have failed to ensure that foreign investments create new jobs for Canadians, bring new capital to Canada, transfer new technology to this country, increase Canadian-based research and development, contribute to sustainable economic development and improve the lives of Canadian workers and their communities.

Only if those conditions are met should the government feel assured that new proposals are indeed a net benefit and be prepared to sign off on a foreign takeover. Instead foreign investments have been motivated simply by a desire to gain control of Canada's strategic industries and resources. Sadly that seems to be just fine by the government.

A perfect case in point is the recent takeover by U.S. Steel of Hamilton icon, Stelco. It provides the cautionary tale of an approved takeover gone terribly awry. Let me give members of the House a little background on what happened in Hamilton.

U.S. Steel acquired the former operations of Stelco Inc. in 2007. That included both Hilton Works in Hamilton and Lake Erie Works in Nanticoke. Under the Investment Canada Act, U.S. Steel had to demonstrate that its investment would provide a net benefit to Canada. As a result, it had to make commitments with respect to job creation, production levels and domestic investment.

To that end, U.S. Steel and the Government of Canada signed an agreement that committed U.S. Steel to 31 different undertakings and promises. U.S. Steel then started up its operations in the fall of 2007. Just a year later, layoffs began at Hilton Works and in 2009 at the Lake Erie Works as well.

In the spring of 2009, the government started to ask questions and U.S. Steel responded with a host of reasons of why it is excused or ought to be excused from meeting its employment and production commitments. These excuses did not fly, and so the government took U.S. Steel to court in July of last year.

The Steelworkers and Lakeside, a company with a potential interest in acquiring U.S. Steel operations, were granted intervenor status. This was a huge victory for the Steelworkers. Winning intervenor status is rare in cases such as these, but the court said that the union had “unique interests” that ought to be considered in determining an appropriate remedy.

U.S. Steel, of course, did not just roll over. In September 2009, the company went back to court challenging the constitutionality of the entire act. Thankfully, in June of this year the judge dismissed U.S. Steel's claim. Once again U.S. Steel filed an appeal and then asked for a stay. The court did not grant the stay application, but to this day the charter challenge is continuing through the courts. In the meantime, U.S. Steel is expected to file its materials from the original case and the hearing will likely be some time in 2011.

Where does that leave us today? I think a number of issues are thrown into relief.

First, by taking U.S. Steel to court the federal government has acknowledged that it does have a legal duty to ensure that foreign investments provide a net benefit to Canada.

Second, the case makes it clear that commitments made by foreign corporations with respect to job creation, production levels and domestic investment are legally binding. They are not fair-weather wish lists that foreign corporations can unilaterally abandon.

Both of those things are good news. But, and this is a big but, clearly they are not ironclad guarantees. If they were, it would not have been possible for the government to take U.S. Steel to court while taking no action against Vale.

Vale permanently cut hundreds of jobs from its Canadian operations, and yet the government did not take Vale to court. Why is that? What was it in Vale's agreement that was different from the agreement with U.S. Steel?

Herein lies the crux of the problem. We do not know. We do not know because the agreements between foreign corporations and the federal government under the Investment Canada Act are negotiated in private and are never made publicly available. It does not need to be that way, and it should not be that way.

That is why our motion proposes two critical changes to the Investment Canada Act. First, public hearings must be made a mandatory part of all foreign investment reviews and those hearings have to be open to all those who are directly affected as well as any expert witnesses that they choose to call on their behalf. This would mean that there would be worker participation in the reviews of foreign takeovers. Unions must be at the table so that any agreements can ultimately be enforced through the collective agreement.

Second, the agreements must be made public. The single biggest challenge to holding companies to their commitments under the act is not knowing what commitments were made in the first place. That is why our motion demands that all conditions attached to the approval of a takeover be made public and be accompanied by equally transparent commitments to monitoring corporate performance on those conditions and appropriate and enforceable penalties for failure to live up to those conditions. In essence, we are creating a legal requirement for transparency and accountability.

As it stands now, enforcement is spotty at best. Even where the government is taking action, workers have to rely on the courts to decide on the appropriate remedy. The court may order fines, divestment, compliance or some combination thereof. But it is the workers who need to be made whole, and the best way to do that is to ensure that they are part of the process from day one.

The alternative is what is playing out in Hamilton right now. The Minister of Industry came to Hamilton and said that he had sympathy for the workers, who are likely to be locked out by U.S. Steel at the end of this week, but that there was nothing he could do. That was on October 15. As U.S.W. Local 1005 rightly pointed out, the minister was “factually wrong, socially irresponsible and politically stupid”.

The agreement signed with U.S. Steel did not expire until October 31, so the company could not, as the minister suggested, “make decisions, good, bad or indifferent, according to their timetable and responsibilities”. U.S. Steel was still bound by its agreement with the federal government, but the minister simply threw up his hands.

Taking a company to court is one thing, but the cavalier attitude displayed by the minister in Hamilton means that reform of the system is desperately needed. The enforcement of foreign takeover agreements cannot be left in the hands of ministers who are not on top of their files.

Canadians deserve better, and our motion delivers better, because our Canada is not for sale.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, I listened to my hon. colleague lay out what happened to the people of Hamilton and the absolutely irresponsible excuses that the Minister of Industry brought forward at the time in response to this debacle. It sounds to me too similar to when we look at what happened to Sudbury. The largest nickel copper resource in the world was allowed to be basically vandalized under the minister's watch. He told the people of Sudbury, in the face of the shutdowns, the layoffs and the crippling strike, that we would look back and remember that Vale came to save Sudbury at the time when Inco was dying. It was not only factually incorrect, it was one of the most idiotic statements a Canadian minister could ever make because four years ago Inco was at the top of the base metal mining game. If we were to talk to anyone in the mining industry they would tell us that the merger between Inco and Falconbridge would have created synergies that were unprecedented. It was under the minister's watch and the government's watch that this industry was devastated.

I know no one will ever put innovation and Tory in the same sentence, all we need to do is think of the Avro Arrow, but I would ask my hon. colleague what the people in the steel industry are saying. The people from the mining sector are saying that what happened to Inco and Falconbridge under the present government's watch has crippled the base metal mining potential in this country to the point where it will never be back to the level that it was at, thanks to the government's debacle.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Madam Speaker, I had the great privilege of joining the hon. member for Nickel Belt and the member for Sudbury when the workers at Vale were on strike for almost a year in their fight to protect their pensions and their jobs and to fight for their colleagues who had been laid off. Over 600 workers had been laid off in Sudbury and they were struggling for their livelihoods.

That is exactly what is happening in Hamilton and in the riding of the member for Timmins—James Bay. People are fighting for themselves, for their families and for their communities. When these foreign takeovers happen, they are fire sales of Canada's most precious resources. The people who are paying the price are not only the taxpayers of Canada but, in particular, the workers whose companies are being taken over.

In Hamilton right now, about 1,000 workers will be locked out as of likely midnight this Saturday because of a foreign takeover gone awry. We in the House cannot do anything specifically to help the workers fight the government because the government will not tell us what is specifically in the agreement and what it will do to enforce that agreement. The first glimpses we had of the agreement that was signed were through the media. A little more access happened through the court cases, but there ought to be transparency and accountability at the front end. Workers in Canada deserve nothing less.

[Linda Duncan, NDP, Edmonton Strathcona, AB]

Madam Speaker, the hon. member is among the best spokespersons in the House on behalf of workers and their families and I wish to thank her for that.

In my province of Alberta, we have noted in this debate about potash that the oil industry is now speaking out and raising concerns about the potential for the government to approve foreign takeovers of that industry which is one of the few revenue generators in the country at the moment, since everything else has been shut down because of these takeovers.

I wonder if the member could speak to the issue, which is so clear in the motion, and that is the issue of openness and transparency, which is what the government supposedly ran its campaign on. Is it not critical that Canadian families have a voice in expressing what really is in the best interests of current and future generations of Canadians?

[Chris Charlton, NDP, Hamilton Mountain, ON]

Madam Speaker, the member for Edmonton—Strathcona is absolutely right, that is at the heart of the motion that is before us today. Communities have a right to have input into the sale of resources within their communities. Workers affected have a right to be heard. More important, when we are talking about the resource sectors, whether it be oil, nickel or copper, in any one of the strategic industries, including steel in my hometown of Hamilton, it is imperative that we have transparency when agreements are signed so that we can ensure the agreements are enforced. However, we can only do that if there is transparency.

I think the motion is absolutely critical to the future, not just of the Investment Canada Act, which is really at the heart of today's debate, but it is absolutely critical for the future of our country.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, I thank my hon. colleague from Hamilton Mountain for sharing her time with me. I know, with the situation that has happened in her riding, that she could have spoken for 20 minutes, if not two weeks, on this subject about how her riding and the families in her riding are being affected by the net benefit of the Investment Canada Act.

I also thank my leader from Toronto—Danforth, the leader of the New Democrats, for bringing forward this motion. He is the only leader listening to the people in my riding and the people who have been affected by foreign takeovers from Timmins to Hamilton to Saskatchewan and right across our great country.

The motion that he introduced wants to ensure that we review foreign investments more publicly, transparently and make it accountable to Canadians. That means a lot to the people who are affected by foreign takeovers.

We need more than just the government's word that a foreign takeover will be good for a community. Clause (c) of our motion wants to ensure that:

...all conditions attached to approval of a takeover be made public and be accompanied by equally transparent commitments to monitoring corporate performance on those conditions and appropriate and enforceable penalties for failure to live up to those conditions;

To me and to the people in my great riding of Sudbury, this is something we wanted to find out all along.

When Inco was taken over by Vale and Falconbridge taken over by Xstrata, there was some concern in my community as to what this would mean to their jobs, families and livelihoods. At first, things seemed okay, but then the economic crisis happened. It seems that many corporations used this crisis as a way to bend some of the rules and have layoffs. In February 2009, Xstrata laid off 686 miners, which meant that 686 families were affected by this net benefit Investment Canada Act and the decision made by Xstrata.

What did we do as good parliamentarians? We said that we would look at the rules and see what could be done to ensure Xstrata was not breaking its agreement and that it was following the rules of the Investment Canada Act. What happened? We were told that we could not see it. We were told to trust the government because it did this with the net benefit of Canada in mind.

When I have 686 miners in a room trying to explain to me how their families will be affected, there was no net benefit for them. There was no net benefit for the store owner who ended up losing business because these people no longer had a job. There was no net benefit for the teenagers of these families who were hoping to go to college but instead had to take a job at Tim Hortons, or something along those lines, for a year to hopefully save enough money so that they could go to school.

There are only so many times as politicians that we can sit in our office and see a grown man cry because he does not know how he will keep his house or keep his family together. That is what this Investment Canada Act has done to my community. It has not shown the net benefit necessary.

For the people of Saskatchewan, I think we have been able to wipe our brow and say “whew”, because we have seen the examples. Sudbury, unfortunately, is an example of what happens when we do not know what it is we need to combat when decisions are made by foreign companies.

Xstrata and Vale made decisions, and we can respect those decisions, although we may disagree with them, but if we want to know what legislation or what agreement they were talking about, we cannot see it. That is what gets people in my riding of Sudbury scratching their heads.

People look at this House and recognize that some of us may be wearing a different colour tie, we may represent different parties and we may have different philosophies but at the end of the day we all represent them. Why is it that we cannot see agreements signed by the government with a foreign company to find out how they will affect our livelihood? That is what gets people scratching their heads.

No matter where the ownership of the Potash Corporation of Saskatchewan ends up, there must be a better deal for Saskatchewan from the development, mining, processing and sale of this strategic resource. Stopping the BHP takeover is the first step in helping make that happen, because the last thing we want to see is more of the losses, more of the negative side of the Investment Canada Act.

We are talking about transparency commitments to monitoring corporate performance on those conditions and appropriate and enforceable penalties for failure to live up to those conditions. When we lost 686 jobs at Xtrata, when we had 400 layoffs at Vale, and when we had a strike for over a year, there was no way we could find out if there should be any type of penalty enforced on these companies because we could not find out what the agreement entailed.

That is the unfortunate thing about this. How do we know if the agreement said that there could be no layoffs and no strikes for the first three or four years or there would be penalties? We do not know. Maybe the companies should have been forced to make some payments and suffer some penalties that could have offset some of the costs that these laid off workers were experiencing. However, when we do not know we do not know how to deal with the situation.

Maybe the agreement was of benefit to the corporation and the government but we do not know. The reason we are asking for transparency is so we can go back to our constituents and look the people in the eye who are being affected and say, “This is the agreement. This is what the government signed on your behalf. You can agree or disagree with it, but this is what the agreement is right now”. People could respect that, but when we hide behind this wall with no transparency, the people who have lost their jobs just do not get that.

What we are hoping for is that this motion will start the talk and bring forward the commitment to ensure foreign investment enriches our communities instead of hollowing them out. I could look three hours to the west of Sudbury, my hon. colleague from Sault Ste. Marie can attest to this, and we have had a foreign investment with S.R. Steel. I do not know all the details of the agreement with S.R. Steel like I do with Vale and Xtrata, but S.R. Steel has become a good corporate citizen in that community. It is involved with its United Way campaign, and as the former executive director of the United Way in Sudbury, I know it is involved there as well. It has been involved with trying to maintain the Huron Central Railway. It has been an advocate to ensure that we keep this vital link between Sudbury and Sault Ste. Marie. It is ensuring that its employees have an opportunity to have a say in discussions.

When we look at what happened at Vale and Xtrata with the takeovers from Falconbridge and Inco, the miners who are actually down 7,000, almost 8,000 feet below the surface working for this company, would they not know what is best to ensure that the company is being profitable and find ways of improving production? Would they not know how to work with their foreman? Instead, these people have been completely kept in the dark. They have not been told what they can get involved with. They have not been told how the company is being affected, because again, the Investment Canada Act is hidden. It is not transparent.

That one part of our motion today is critical, in my opinion, to ensuring that we can bring forward this issue and end the hidden agenda, it seems, that is coming forward with the current Investment Canada Act.

Many times I have sat in my office with many of the miners, laid off miners and people who have been affected by the corporate takeovers and they always ask what they need to do to get this information out. I tell them that they need to continue to advocate on their own behalf because it is our belief that this motion to ensure that the act is more transparent will protect workers and families, and, if we get the right type of investment, we can create jobs, technology and research development.

[Paul Calandra, Conservative, Oak Ridges—Markham, ON]

Madam Speaker, I enjoyed parts of the member's speech and I am thrilled that he is going to be joining us. We have been standing up for Canadian families of course by our tax reductions, such as the reduction in the GST from 7% to 6% to 5%, and all of the other cuts that we have made to support Canadian families. I am encouraged that he will be considering voting in favour of those in the future as opposed to against them.

I wonder if he will agree with me that we need to consider making changes to the Investment Canada Act. For 13 very long years in this country, we had a Liberal government that absolutely did nothing to protect Canadians, nothing to protect Canadian businesses. It simply rubber-stamped every single takeover that was brought before it.

I know he would probably agree with me that the heroic efforts and the strong representation of the members of the Conservative caucus from Saskatchewan have gone a long way in helping to transform Saskatchewan into the vibrant economy it is today.

Could the member comment on the lack of responsiveness of the previous Liberal government to ever protect Canadian jobs or businesses?

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, if the hon. member would like to come to Sudbury and talk to the laid-off miners about the tax cuts that you think are so fantastic for them, after they have just lost their jobs, I encourage you to do so.

In relation to the previous Liberal government and the current Conservative government, where you have been able to say, “We have stopped one and the Liberals stopped zero”, we still have 30 days to see how that is going to play out.

[The Acting Speaker, NDP, Denise Savoie]

Order, please. I would just ask the hon. member to direct his comments through the chair.

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, the important thing to recognize is that we are asking for transparency. We are asking for the Investment Canada Act to involve the workers and to involve the communities that they are affecting, and that is the important piece of this motion. We are making sure that this is going to come forward and be more transparent for those who are affected.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Madam Speaker, my hon. colleague is from a mining and smelting community and I am from a mining town. We are no strangers to heartbreak. We have seen mines close. We have seen deals go down. We have seen communities built up in the wilderness and then the capital falls because the price of ore drops. These things happen, but what happened with Falconbridge and Inco stands alone in the history of Canadian mining because so many people warned and predicted that if we allowed the potential merger that could have taken place to be ripped apart by a corporate raider, the long-term impacts would be devastating.

The government at the time told us, “Do not worry. There is a nickel boom right now. Everything is fine”. It showed the fundamental misunderstanding that it has, that just because there is a boom in mining does not mean there is not going to be a bust. There will always be a bust and it is who controls the resources at the time of the bust that becomes a central issue. Right after the takeover by the hostile corporate raider, Xstrata, and then Vale took over Inco, we hit the bust.

We lost 1,000 jobs in Timmins. We lost all our copper refining capacity in the province of Ontario because of the government. I would like to ask my hon. colleague what it meant for the people of Sudbury, when they knew and were warning the government that this deal with Falconbridge and Inco being taken over was a disaster in the making. What did they think of the refusal and the glib answers that they received from the government?

[Glenn Thibeault, NDP, Sudbury, ON]

Madam Speaker, we are going back a few years. Falconbridge and Inco were talking about merging together to become the largest nickel mining company in the world. The community was thrilled and excited. People were talking about it everywhere. We were going to create synergies in our community. We were going to take the big trucks off our main streets. These two large companies were going to work together to create a better community for all, and unfortunately, the government sat on its hands and that deal failed.

What did we get? We got Xstrata coming in and taking over Falconbridge, talking about all the great things it was going to do for our community, and then it laid off 686 workers and shut down mines, but kept the high grade mines open because they pretty much cost zero dollars to operate. Vale on the other side, again, Inco and Falconbridge could have been creating all of these synergies but instead, there was a year-long strike that not only affected 3,000 families, but affected the mining supply and services sector which is 17,000 families in our community, which then affected our broader community overall. Our entire community was suffering. If only we could have gone back four years and gotten the government to stop sitting on its hands.

[Lynne Yelich, Conservative, Minister of State (Western Economic Diversification)]

Madam Speaker, I would like to split my time with the member for Cypress Hills—Grasslands.

First I want to applaud this government. I want to applaud the Minister of Industry for his careful review of the BHP deal. I fully support this decision. As a Conservative member of Parliament from Saskatchewan, I want to commend my Conservative colleagues. We acted responsibly and were forthcoming in sharing our knowledge and the concerns of our constituents in this matter.

Under the previous Liberal government, every single transaction was approved without investigation knowing full well that the act requires an assessment of the net benefit test. When the member for Wascana was at the cabinet table, he rubber-stamped every single deal and never once took a company to court to challenge it on its commitments. His recent actions were nothing but rhetoric and bluster.

This government believes in foreign investment. It is vital to our economy, especially our resource sector, but the deal must meet the criteria that it be a net benefit to Canada. Yesterday the Minister of Industry announced that he believes this deal is not likely to be a net benefit to Canada and we fully support him in this decision.

Moving to today's discussion, the motion before us states in part:

—the Government of Canada should take immediate steps to amend the Investment Canada Act to ensure the views of those most directly affected by any takeover are considered, and any decision on whether a takeover delivers a “net benefit” to Canada is transparent by: (a) making public hearings a mandatory part of foreign investment review; (b) ensuring those hearings are open to all directly affected and expert witnesses they choose to call on their behalf; (c) ensuring all conditions attached to approval of a takeover be made public and be accompanied by equally transparent commitments to monitoring corporate performance on those conditions and appropriate and enforceable penalties for failure to live up to those conditions; (d) clarifying that a goal of the Act is to encourage foreign investment that brings new capital, creates new jobs, transfers new technology to this country, increases Canadian-based research and development, contributes to sustainable economic development and improves the lives of Canadian workers and their communities, and not foreign investment motivated simply by a desire to gain control of a strategic Canadian resource; and that the House express its opposition to the takeover of Potash Corporation by BHP.

As I have mentioned, under the Investment Canada Act, where an investment is subject to review under the act, the minister must approve an investor's application for review before an investor can implement an acquisition. The minister only approves applications where he is satisfied based on the plans, undertakings and other representations of the investor that the investment is likely to be a net benefit to Canada. The review process under the act is rigorous. It involves careful analysis and extensive consultations with government departments and the provinces.

Let me take a moment to explain the confidentiality provisions of the act. They do not permit the minister responsible to make comments about specific investments without the investor's prior agreement. Divulging confidential information outside of the narrow exceptions of the act is a criminal infraction.

Some members of the House have questioned why the confidentiality provisions of the act are so strict. The confidentiality provisions of the act reflect the fact that the information shared by the investor with the government is often commercially sensitive information, which, if disclosed, could harm the competitive position of the investor and harm its partners, including, for instance, its suppliers. Unless investors are sure that their information will be protected by the government, they will be reluctant to share information that is critical to the rigorous review process.

To ensure the minister can obtain the information he requires to make his net benefit determination, very strict confidentiality provisions have been included in the Investment Canada Act, and these must be followed.

During the review process, the investor generally provides plans and undertakings to support that its new investments are likely to be a net benefit to Canada. All approved investments are subject to monitoring to determine the extent to which the plans and undertakings provided by the investor have been implemented.

An evaluation of the implementation of the plans and undertakings provided by the investor is ordinarily performed 18 months after the implementation of the investment, and additional evaluations are performed based on the duration of the plans and undertakings.

The act provides for remedies where a non-Canadian investor implements an investment on terms or conditions that vary materially from those contained in an application, or where the investor has failed to comply with a written undertaking.

The decision to take enforcement measures under the Investment Canada Act is based on the overall performance of the investor in implementing its plans and undertakings, and decisions to take enforcement measures are made on a case-by-case basis by the minister based on the specific circumstances of the transaction.

I would remind the House that our government is the only Canadian government to take enforcement measures. Under the Liberals, not once did that occur.

Our government's record is clear. We firmly believe in foreign investment. We have taken measures to increase foreign investment in the satellite sector. We are consulting on how to achieve similar goals in the telecommunications sector.

Canada is open for business, but only when the proposal is of a net benefit to Canada.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Madam Speaker, I would like to bring up an issue that was raised in the House back in 2005. Just to give it perspective, at that time in my part of the country we were in a very heated debate about the Atlantic accord. The whole idea was that the people of the province would be the principal beneficiary of the resource contained within the waters off Newfoundland and Labrador. In that case it was oil and gas.

I would assume the member would appreciate the fact that the people of Saskatchewan would be the principal beneficiaries of their own resource.

When it comes to the Investment Canada Act and a motion like this one, we are talking about disclosure and transparency. Would not more transparency, more openness and more disclosure actually lend itself to more information for the average person in Saskatchewan, saying that the people of Saskatchewan are the principal beneficiaries of this resource?

[Lynne Yelich, Conservative, Blackstrap, SK]

Madam Speaker, this resource is very important to Saskatchewan.

I have to remind the member that it was a Liberal government at the time the accord he mentioned took place. I cannot answer for that particular time.

[Jim Maloway, NDP, Elmwood—Transcona, MB]

Madam Speaker, I am pretty unclear at this point as to whether she and the government will be supporting this motion.

In the last two years the government raised the general review threshold to $1 billion over a four-year period which currently stands at $312 million in gross assets. This makes it easier for foreign takeovers to occur.

The government is giving a mixed message. On the one hand it is trying to streamline and make foreign takeovers easier, and one the other hand, now that it finds one that it actually does not like because it is causing some political troubles in Saskatchewan, it is putting the brakes on.

Will the member be supporting this motion which would make some meaningful change in the review process?

[Lynne Yelich, Conservative, Blackstrap, SK]

Yes, Madam Speaker. We always support the people of Saskatchewan. In fact, just last week we showed how well we support them.

Mining is important to Saskatchewan.

The opposition coalition is not transparent. Those members were not clear or transparent with their constituents. They talk about mining and how they support it, but Bill C-300 would have devastated the whole mining industry.

We are working hard to adhere to the law and to the act.

As for BHP and the government of Saskatchewan, the industry was aware of the concerns raised by the government of Saskatchewan, and those concerns were taken into consideration. It is important for the member to know that we support the government and the industry minister in his decision yesterday.

[Maurice Vellacott, Conservative, Saskatoon—Wanuskewin, SK]

Madam Speaker, the member commented on the net benefit clause in the investment act.

On the one hand, the Liberals rubber-stamp everything that comes along; on the other hand, the NDP opposes everything.

An individual named Jim who has a membership in the New Democratic Party infers that nationalization might be the way to go. How the coalition works out that polar opposite, I am not sure.

I would like the member's take on comments made by the Liberal provincial leader in Saskatchewan, which seem to contradict some members comments here in the House.

[Lynne Yelich, Conservative, Blackstrap, SK]

Madam Speaker, that was probably the most interesting part of the debate. The member and his party in Saskatchewan are obviously on opposite sides of the issue, because the Liberal leader in Saskatchewan came out unequivocally against the decision made by the minister yesterday.

I want to remind members that we have done what is right for Canada and what is right for Saskatchewan.

[David Anderson, Conservative, Parliamentary Secretary to the Minister of Natural Resources and for the Canadian Wheat Board]

Madam Speaker, I want to thank my colleague from Blackstrap for splitting her time with me today on this important issue.

Last night, the Minister of Industry determined that the BHP proposal to purchase PotashCorp was in his opinion not likely to be a net benefit to Canada.

For weeks we have heard the member for Wascana rant and rave. We have heard the opposition use ever more inflammatory language, with a lack of understanding of both the process and common sense. Last night the Minister of Industry kept a cool head. He weighed the facts and made his decision.

I want to say today that Canada is open for business. Canada's economy needs foreign investment. Interestingly, Canadian firms invest more money outside of Canada than foreign firms invest here. We live in a world in which Canada has strong economic fundamentals. I would argue that this is in part due to our economic action plan and to the great leadership of the Prime Minister. Our companies are better able to compete abroad. We cannot and we must not close the door to foreign investment.

Our government was elected on the platform of standing up for Canada, and we will fulfill that commitment.

Under 13 years of Liberal rule, the Liberals ignored the west. Yet in the past few weeks, the Member for Wascana seems to have forgotten that.

While we had one member from Saskatchewan promoting his own interests, we had thirteen members from Saskatchewan working with the government to promote the best interests of Saskatchewan.

As my colleague pointed out earlier, he cannot even get along with his own colleagues in the province. This is basically the rule of thumb for how things operate there for him: he is in disagreement with his own provincial Liberal leader about the position that he took.

I have also been surprised at some of the comments made about my own colleagues. They are made by people who, in many cases, do not even bother to call and talk to us. There are some people who think that unless there is division and dissension nothing is getting done. I can say that nothing is further from the truth.

There is another story that needs to be told. There are 13 MPs here who are able to work together, who are used to working together. We bring 13 different perspectives, 13 different histories, to the House. We bring 13 different opinions to our discussions. The folks whom I work with from the Saskatchewan caucus bring a team attitude. They set their individual egos aside for the betterment of our province. It is a group that can carry a unified message and is willing to present a unified front when we bring our ideas to caucus and to the government.

I am proud to be part of this group. I am proud to work with them. One of the reasons I am proud is that this approach has worked for Saskatchewan. Saskatchewan has benefited from this group of MPs. There has been consistent leadership in Parliament and in our party. Over the last few years, we have brought forward a balanced platform of tax cuts, a balanced stimulus package, a well-organized economic action plan, and a focus on strengthening our economy.

That is one of the things that has made our province a leader in the country. Others look to Saskatchewan for leadership. It is not an accident that this has happened since a Conservative government has come to power in Ottawa.

The former Liberal government approved every single one of the applications for foreign takeovers. It never challenged any of them. Our government believes strongly in foreign investment, but a vital part of the deal is that it must be of benefit to Canada. We need take no lessons from the member for Wascana.

Furthermore, we could see last night, if we were watching TV, that his leader has demonstrated a complete lack of understanding of how Investment Canada acts and how foreign investment works in this country. This is strange, because there has been a foreign takeover taking place in the Liberal Party for the last five years. We would think Liberals would know a little more about it than they seem to.

The government recognizes that, although foreign investment is generally to the benefit of the host country, there may be instances where a given transaction, according to the present legislation, upon close and diligent scrutiny, is determined not to be beneficial.

I would like to talk about the Investment Canada Act. To ensure that significant acquisitions of Canadian enterprises by foreign companies are of net benefit to Canada, the Investment Canada Act requires that the Minister of Industry examine and approve a proposed investment before it can be made.

Under the present act, the minister must be satisfied, based on the plans, undertakings, and other representations of the investor, that the investment provides a net benefit to Canada. In making the determination, the Minister of Industry must consider the following factors: 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.

This process and this act require that significant foreign investments are of net benefit to Canada. That is only half the story. I want to talk about the many associate benefits that Canada reaps when Canadian businesses make investment abroad.

Until the 1970s, certain branches of economics viewed outward foreign direct investment as generally detrimental, particularly with respect to economic growth in capital-exporting countries. Large enterprises investing outside their home countries were thought to be depriving the home country of economic growth and employment. Thankfully, we now know that this is an inadequate perspective.

Nowadays, Canadian investment abroad contributes to a more dynamic and competitive economy both in other countries and at home. To be more specific, I am going to go through a few points about our foreign investment. Data show that the growth, productivity, and profit from Canadian firms involved in global markets has been superior to the performance of domestically oriented firms. Income from Canada's foreign direct investment increased sharply with the increase of outward foreign investment. Direct investment income averaged $6 billion between 1990 and 1996, almost $2 billion more than between 1985 and 1989, and that directly helped to improve our standard of living.

The growth of Canadian investment abroad leads to an increase in exports, and this directly affects Canada's economic health. Exports account for more than one-third of our gross domestic product. They are the path to future growth and continued competitiveness in the global marketplace. No one knows this more than the folks in my part of the world who grow agricultural products.

Investment abroad offers Canadian high tech companies better access to foreign skills and foreign technologies. It also increases research and development in Canada, which in turn leads to innovation, expanded market potential, and better employment opportunities for highly educated workers.

The spillover effects benefit companies that are not necessarily investing abroad themselves.

We cannot shut the Canadian economy off from foreign investment, as the NDP and the coalition seem to want. The benefits are too great. We must be vigilant. We must make sure that the net benefit of a transaction is, in fact, a net benefit to Canadians. That does not mean building a 60-foot wall, as the coalition would like to see, as the current NDP leader in particular would have us believe is necessary.

As a small economy, we welcome foreign investment because it is an important economic driver. Foreign investment contributes to our economy and is absolutely critical. The trend toward globalization and foreign investment provides many benefits to Canada, and it is important to adopt policies that encourage trade and investment. That is what Canadians expect, and that is what our government will deliver.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Madam Speaker, I thank my colleague for his comments, although focusing so much on the member for Wascana probably does him too much of a service.

The member talked about what his government was elected on, what the mandate was. It is fundamental to politics that we campaign on something. People look at the campaigns, compare them, and elect us on that supposed mandate.

The Conservatives also talked a great deal about accountability and transparency in government. Part of the NDP motion today, which addresses not only potash but also foreign investment in general, is to ask that public hearings actually happen. We need to make public hearings a mandatory part of a foreign investment review. This would not require every moment of the foreign investment to be made public. But something should be put into the legislation that allows the public the opportunity to see the arguments made by the foreign company or foreign government looking to buy a Canadian asset.

In the spirit of accountability to the Canadian people, and to the workers of a company that might be purchased, would my hon. colleague agree with that sentiment? Would he agree that at least some part of the review should be made public? Would he agree that the public should have an opportunity, in the fair and true light of day, to see exactly what is being done to a Canadian firm?