Debates of April 28th, 2010

Opposition Motion—Investment Canada Act

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

Mr. Speaker, very quickly, the point of this motion is that we have to put up a warning signal to other communities: the people in Voisey's Bay who are suffering, the people in Sudbury who are suffering, and the people in Timmins who are seeing the copper-refining capacity of Ontario permanently removed. It will never come back.

We never would have thought this possible. We never would have thought a government would abandon our regions and our economy so badly as has happened under this government. That is why a signal has to be sent to other parts of this country to say that their sectors are next, because this government is sending out a clear signal that it is open to selling whatever off to whoever wants it, and they can come in and take it. It will be an awful fire sale, and it will affect every one of our communities.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, as we have seen when it comes to free trade agreements, the Conservatives clearly do not do any impact studies. Now they want to allow sales or transfers worth up to $1 billion to foreign interests, without examining the impact on local and regional economies In Quebec and Canada.

Does the member not think they are going too far in raising this threshold to $1 billion without examining the consequences and with no action plan to determine whether jobs and investments will be protected?

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

Quite frankly, Mr. Speaker, it is a joke. A billion dollar threshold is a joke. The Conservatives are just thumbing their noses at their responsibilities. At $400 million we have already seen them rubber-stamp and allow major industries to be sold off. They are sending the signal that Canada is up for sale, end of story.

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

Mr. Speaker, let me begin by stating that foreign investment plays an important role in the Canadian economy.

Foreign investors bring with them knowledge, capabilities and technology that can increase the productivity, efficiency and competitiveness of Canadian firms. These investments frequently help Canadian-based companies to expand and create jobs for Canadians.

Recognizing the importance of investment flows into the country, Canada has a broad framework in place to promote trade and investment while at the same time protecting Canadian interests. It is important to note that investment flows both into and out of Canada. In fact Canadian international acquisitions exceeded the value of foreign acquisitions over the past several years.

According to one of Crosbie and Company's quarterly M & A reports, 204 Canadian companies acquired foreign companies in 2009 compared with 83 foreign companies acquiring Canadian firms.

In order to ensure that Canadian firms continue to have access to investment opportunities abroad, it is important for Canada to maintain a global investment climate that encourages the free flow of investment.

The Investment Canada Act provides a mechanism to review significant acquisitions of Canadian enterprises by non-Canadian companies to determine if they will be of net benefit to Canada. It also provides a mechanism to review investment that could be injurious to national security.

I would like to take this opportunity to describe how the Investment Canada Act works and how decisions are taken by the minister.

First, the administration of the act is shared between two ministers and their respective departments. The Minister of Canadian Heritage is responsible for the review of investments involving cultural businesses. The Minister of Industry is responsible for the review of all other investments. The Minister of Industry is also responsible for all other aspects of the administration of the act, including initiating enforcement measures.

My comments today will focus on only those investments that are the responsibility of the Minister of Industry. When a foreign investor proposes to acquire a Canadian business, the investor has certain responsibilities under the act.

Foreign investors must file either a notification or an application for review. An investor must file a notification when a new Canadian business is established or when there is an acquisition of control of a Canadian business with assets below the established threshold.

For an investment that is not subject to a net benefit review under the act, where an investor has provided the information required by the Investment Canada regulations, the investor has met its obligations under the act. No further action is required on the part of the investor. Information required under the regulations includes the names of the investor and the Canadian business, their respective addresses, a description of the business of the latter, and its level of assets.

Where a proposed investment is subject to a net benefit review under the act, the investor cannot implement the transaction without the approval of the minister responsible for the act. The investor must provide certain information as part of the filing of an application, including its plan for the Canadian business.

An acquisition is subject to review when the assets of the Canadian business to be acquired are equal to or above the thresholds established in the act. The threshold that applies to WTO members is adjusted each year by an amount equal to the change in the nominal gross domestic product. The threshold is $299 million for 2010. The threshold for cultural businesses remains at the level established in 1985. It is $5 million for direct acquisitions or $50 million for indirect acquisitions.

The act provides the minister an initial 45 days to complete the review of a proposed investment and to make a determination of net benefit. The minister can extend the review period if necessary by 30 days. The review period can be extended further if both the investor and the minister agree.

The Minister of Industry approves an application for review only where he is satisfied, based on the plans, undertakings and other representations of the investor, that the investment is likely to be of net benefit to Canada.

In making his determination of net benefit, the Minister of Industry 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 finally, the contribution of the investment to Canada's ability to compete in world markets.

As part of the review process, the investment review branch of Industry Canada consults with federal government departments with policy responsibility for the industrial sector involved in the proposed acquisition, with the Competition Bureau, and with all the provinces in which the Canadian business has substantial activities or assets. The purpose of the consultation is to engage sector specialists at both the federal and provincial level, to identify any policies that should be considered in the review and to obtain the views and concerns of the consulted parties relating to the acquisition.

Industry Canada's investment review branch relies on consulted parties to identify areas of concern for the sector and the specific Canadian business. Once the consulted parties have provided their input, discussions take place with the investor, and legally enforceable undertakings are discussed with the investor to address the concerns of the consulted parties.

Industry Canada's investment review branch staff also perform an independent analysis of the acquisition. To do so, they examine financial statements and annual reports for both the investor and the Canadian business. This information provides an indication of the strategic marketing, operating and financial strengths of each party and assists in the analysis of how the two companies fit together. In addition, the investor is frequently requested to provide additional information to make better understood the plans it has for the Canadian business.

In 2009, the investment review branch of Industry Canada received and processed 415 notifications. In addition, the Minister of Industry approved 22 applications for review. The motion before us asks that the government act immediately to protect the interests of Canadian workers and their communities and the strategic and long-term interests of the Canadian economy by:

improving its review of foreign takeovers that involve key Canadian resource, manufacturing, high tech and, potentially, telecommunications companies, by strengthening the Investment Canada Act by: (a) lowering the threshold for public review; (b) ensuring public hearings are held in affected communities; and (c) requiring publication of the reasons for decisions and conditions to be met by approved foreign owners.

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 approves applications only where he is satisfied, based on the plans, undertakings and other representations of the investor, that the investment is likely to be of net benefit to Canada. Under the act there is a rigorous review process that involves careful analysis and extensive consultations with government departments and the provinces.

Let me take a moment at this time to explain the confidentiality provisions of the act. These provisions do not permit the minister 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 of the members of the House have asked why the confidentiality provisions of this act are so strict. The confidentiality provisions of the act reflect the fact that information shared by investors with the government is often commercially sensitive information, which, if disclosed, could harm the competitive position of the investor and its partners, including, for instance, its suppliers.

Unless they are assured that their information will be protected by the government, investors will be reluctant to share information that is critical to the rigorous review process. To ensure that 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, investors generally provide plans and undertakings to support their position that investments are likely to be of net benefit to Canadians. 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. 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 an investor in implementing its plans and undertakings.

Decisions to take enforcement measures are made on a case-by-case basis by the minister, based on the specific circumstances of the transaction. The process for enforcing plans and undertakings provided by an investor during the review process includes seeking an order from a superior court to remedy any gap in the implementation of plans or undertakings.

The government has recently completed a review of the act, and has implemented amendments to ensure that the act will apply to the investments that are most important to the Canadian economy and that will increase the transparency of the act.

In July 2007, the government appointed the Competition Policy Review Panel, chaired by Red Wilson. As part of its mandate, the panel reviewed both the Investment Canada Act and the Competition Act. In June 2008, the panel released its final report, entitled “Compete to Win”, with recommendations to enhance Canada's competitive performance.

The panel concluded that Canada benefits from being open to the world and that attracting greater foreign investment is in Canada's interest. Accordingly, it concluded that the Investment Canada Act should be applied to fewer cases, where the market importance of the transaction is the greatest. To achieve this, it recommended, notably, that the threshold under the act be increased.

The panel also recommended measures to improve the transparency and accountability of the Investment Canada Act while recognizing the importance of preserving commercially sensitive information. Finally, the panel endorsed the creation of a new review mechanism for national security.

In March 2009, the government made a series of amendments to the Investment Canada Act that resulted in the adoption of the panel's core recommendations and conclusions. These amendments were by far the most important legislative changes to the Investment Canada Act since its adoption in 1985. The government recognizes that global markets have evolved and so too must our framework policy.

The amendments ensure that reviews of proposed investments will apply to those investments that are the most important to the Canadian economy and will continue to allow foreign investors to create jobs in Canada by investing here. These amendments also improve transparency in the administration of the act, so that Canadians and foreign investors alike can better understand the workings of the act and its objectives.

More specifically, the amendments reform the act by changing the basis for the general review threshold from the book value of the gross assets to enterprise value. Regulations are required to bring this change into force. Furthermore, the amendments reform the act by raising the general review threshold to $1 billion over a four-year period; it currently stands at $299 million in gross assets.

The amendments also eliminate the application of the lower review threshold in identified sectors, for example, transportation services, financial services, and the uranium production sectors.

The amendments require the minister to justify any decisions to disallow an investment, and allow the minister to disclose administrative information on the review process. Moreover, they require the publication of an annual report on the operations of the act and, finally, they authorize the government to review investments that impair or threaten to impair national security and, if necessary, to take appropriate action.

These amendments will help Canada attract more foreign investment, a key driver of growth, by improving Canada's access to know-how and technology, by enhancing Canadians' ability to innovate and reach global markets, and by continuing to employ Canadians throughout the country.

In conclusion, the act provides a mechanism for the review of significant investment proposals to determine whether they are of net benefit to Canada. The government has examined the act and has introduced amendments to ensure that it applies to the investments that are most important to the Canadian economy, and to improve the transparency of its administration.

The government also has enforcement measures at its disposal, which it can invoke where the minister was not satisfied that investors have fulfilled their obligations under the act.

[The Acting Speaker, Conservative, Barry Devolin]

It is my duty, pursuant to Standing Order 38, to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Saint-Bruno—Saint-Hubert, Broadcasting Industry.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, the hon. member very clearly indicated the wording of the Investment Canada Act. However, when he was talking about the wording, he was not talking about the effects. Here is how the Investment Canada Act has worked in my community.

About a year and a half ago, Xstrata laid off 686 workers seven months before the three-year agreement expired. Xstrata is closing down the copper refinery in Timmins. Vale Inco has laid off over 400 workers. They have been on strike for 10 months. That is now affecting the mining supply and services sector, meaning that 17,000 employees in Sudbury have gone from 40 hours a week to about 21 hours a week. Hopefully, some of them are still working. This is also affecting jobs in the retail sector.

Therefore, we are trying to find out what the net benefit is. What is the net benefit to Timmins, Voisey's Bay and Port Colborne? What is the net benefit to Sudbury, and what is the net benefit to Canada when we continue to lose jobs and to export these jobs to China and other third world countries when all along we see people pointing fingers at other governments or not taking responsibility? What is the net benefit of this Investment Canada Act for the people in northern Ontario?

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

Mr. Speaker, the hon. member attributes the results of a global economic slowdown to changes in the Investment Canada Act. I would note that as this global economic slowdown has affected countries around the world, commentators worldwide have pointed to Canada as a leader because of our approach in this regard.

I would also point out that the NDP ideology would seek to build a wall around Canada; nothing would get in, nothing would get out. Canadian companies would be unable to grow beyond our borders. Canadian companies would be unable to sell their products around the world.

The NDP protectionist ideology would be devastating to Canadians, devastating to Canadian companies, and devastating to Canadian consumers. Most importantly, it would be devastating to Canadian workers.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Mr. Speaker, I would like to follow-up the comments of the hon. member for Sudbury because the question really does affect northern Ontario, an area that I am very close to and, in fact, live in.

We were supposed to have foreign investment. When we think of foreign investment, we usually think of companies coming into Canada and investing capital and doing research and development.

However, what we have in northern Ontario are mines. We have forestry products. We have natural resources. My question for the parliamentary secretary is what do we do in northern Ontario when we basically open up Canada to foreign companies, who want to come in and basically rape, pillage, and plunder our natural resources without putting anything in. We are basically allowing them to come in, take what they want, and leave as they wish.

Maybe the hon. member could tell me what the government is doing? Is it just sitting back and letting anybody in to do whatever they want with our natural resources, while our people are unemployed, waiting for jobs and begging with cap in hand?

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

Mr. Speaker, once again I would reiterate what I said in my speech.

Specific criteria are used to define net benefit to Canada. Virtually every economist in the world would point to foreign investment as a key driver of growth, better jobs, and better quality of life in terms of technology and all of the different things that we benefit from.

I would also point out that the number of Canadian companies and champions that are buying companies in other countries is significantly higher than vice versa, contrary to what the opposition parties would have us believe.

Canada is uniquely positioned in the world among industrialized countries as we come out of this global slowdown, as indicated by the commentary from the IMF, the OECD, and the World Economic Forum. Virtually every knowledgeable foreign economic organization has pointed to Canada as a world leader coming out of this global slowdown.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I have a question for the member.

Does he realize, as evidenced by the cases mentioned in the NDP motion, that sometimes foreign ownership is synonymous with closures, layoffs and violations of agreements signed with the government? That is what will happen if there is no review process for transactions of up to $1 billion, which represent a huge number of jobs.

We have heard that people come to exploit our resources. We know that it takes secondary and tertiary processing of our resources to see economic development.

If we cannot have an impact assessment on transactions under $1 billion, the risks will increase with the number of companies that will avoid having to undergo such assessments. There is also the risk of companies moving, which causes us to lose more and more business and development opportunities.

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

Mr. Speaker, I would point out that under the Investment Canada Act, the changes that were made were largely put forward by a panel of renowned experts from across this country. These changes have been widely accepted as ones that would benefit Canada significantly economically, especially given the fact that we are a trading nation.

I would also point out in terms of the net benefit review and the undertakings by different companies, and here we are talking about several different companies named by the members opposite in the motion, that in every case the undertakings are very different. In some cases, the challenges faced by those companies are largely due to the circumstances that are coming out of this global economic slowdown that we have talked about and that everybody is aware of.

In one particular case, of course, in the judgment of the minister, a company had not met its requirements according to its undertakings. That case is now before the courts.

[Peter Julian, NDP, Burnaby—New Westminster, BC]

Mr. Speaker, I am just amazed at the economic illiteracy of the current Conservative government. It is not surprising. We have a Prime Minister who learned his economics from a textbook. He never had to meet a payroll in his entire career before coming to the House.

What the parliamentary secretary obviously does not know is that every single bilateral agreement the government has signed has actually led to a reduction in exports. The government members do not even check their facts. It is absolutely appalling.

The other thing that the parliamentary secretary obviously does not know is that in the last 20 years the real income of most Canadian families has declined, not gone up. The wealthy, of course, are wealthier than ever. If one is a banker or a corporate executive, yes, one's income has gone up. It has skyrocketed for the wealthiest 20%. However, for most Canadians watching this debate today right across this country, their real income has declined, in large part because of the do-nothing attitude of the previous Liberal government and the complete incompetence of the current Conservative government on economic issues.

The question is very simple. Why do the Conservatives not take the stewardship of the economy in hand, so they can ensure that when foreign investment comes into this country, it is actually in the interests of Canadians, both in northern Ontario and everywhere else in the country? Why do they not do their job?

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

Mr. Speaker, I am sure that the dozens of Canadians who are tuned in right now are having a hard time hearing my answer, because they are laughing hysterically at the NDP member's speech on economics.

Let us take a look at what the experts have had to say about Canada's approach.

Nobel Prize-winning economist Paul Krugman said:

We need to learn from those countries that evidently did it right. And leading that list is our neighbor to the north. Right now, Canada is a very important role model.

Patricia Croft, from RBC Global Asset Management, had this to say:

In terms of the global comparisons, Canada is the envy of just about every other country in the world.

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I will share my time with the member for Nipissing—Timiskaming.

I am pleased to rise today to speak to the motion from my NDP colleague regarding the Investment Canada Act. The Liberal Party will vote for the principle behind this motion, that we must review the Investment Canada Act so there is more transparency and accountability for the good of Canadians.

In light of the fire sale of Inco, Falconbridge, Stelco and Nortel, the current government is responsible for an unprecedented loss in Canadian industrial leadership.

Take Inco, which was already a leading nickel and copper mining development company in northern Ontario. It was purchased in 2006 by Brazilian company CVRD, or Vale. The merged company, Vale Inco, which had sales in the neighbourhood of $8 billion in 2009, is now the second-largest nickel producer in the world.

Workers at Vale Inco in Sudbury have been on strike for more than 10 months. The parties cannot agree on the nickel bonus or changes to the pension plan. Local workers and the NDP have repeatedly called on the federal government to publicize Vale's agreement when the Brazilian company acquired Inco under the Investment Canada Act. We are especially interested in the conditions of employment and investments.

Then there is Falconbridge. It is another prominent Canadian company that mines nickel and copper in northern Ontario. It was bought by Xstrata in 2006. This Swiss company was recently scrutinized after it announced that it was cutting 700 jobs at its metallurgical site in Timmins.

Next we have Stelco. This major steel producer in the Hamilton area was bought by US Steel in August 2007 for $2 billion. In early 2009, Stelco/US Steel announced that it was shutting down its Hamilton and Lake Erie steel plants, putting some 700 people out of work. Stelco/US Steel then said that excessive production costs were behind their decision to shut down these two steel plants and move their steel production to the United States.

We were told that this decision was related to American legislation encouraging the purchase of American products and under which US Steel would be eligible for stimulation funding, but only if it produced steel in the United States.

On May 7, 2009, the Minister of Industry sent a demand letter to Stelco/US Steel, calling on it to reopen the two steel plants because the closures went against US Steel's commitment when it bought Stelco. On June 13, Stelco/US Steel reopened the Hamilton steel plant. However, nothing has happened with the plant in Lake Erie.

Let us move on to Nortel. In 2009, after years of turmoil, Nortel sought protection under the Bankruptcy and Insolvency Act. Since then, Nortel has sold off a number of its subsidiaries, including its wireless communications branch, its optical businesses and technologies, and its foreign companies.

Around the time of the sale of the wireless technology division, Waterloo-based RIM and Nortel submitted a proposal to the federal government for a partial merger to create a new Canadian company specializing in wireless technology, a company that would benefit from pooling each partner's leading-edge technology. The Conservative government decided not to approve the proposal and, in defiance of the spirit of the law, even refused to consider the sale of the division.

As a result, there was a transfer of knowledge and intellectual property with respect to Long Term Evolution or LTE wireless technology.

LTE technology is without a doubt the way of the future. It could be worth billions. Major European and American corporations, whose subscribers represent more than 50% of the wireless communications market, have announced that they are beginning to convert their systems to LTE technology.

Now, back to the NDP motion, which raises the issue of whether the Investment Canada Act gives the federal government the tools it needs to protect Canada's interests by strengthening the economy and protecting jobs and our valuable intellectual property.

The Liberal Party supports the NDP motion. The Investment Canada Act must be amended to ensure greater accountability and transparency. However, Liberal opinion may differ with respect to specific amendments.

The Liberal Party believes that the government must play a positive leadership role in creating networks and finding solutions to strengthen Canada's economy. With Inco, Falconbridge, Stelco and Nortel, the federal government could have shown some leadership by bringing stakeholders and business leaders together to create Canadian companies able to compete in the global marketplace. It could have neutralized negative factors, such as the buy American policy. Unfortunately, the Conservative government did not show that kind of leadership.

In short, because of the Conservatives' laissez-faire attitude, Canadian resources and advanced technologies that could have produced billions of dollars in economic spinoffs and created thousands of jobs for the economy are no longer Canadian-owned.

This federal government could have shown some initiative and merged Nortel and RIM to create a new Canadian giant of innovation. But it chose not to.

The federal government should have fought every day in all the offices of the U.S. Congress, the Senate and state governors to challenge the Americans' national preference policy and prevent the US Steel plants in Hamilton and Nanticoke from closing. But it chose not to.

The federal government could have shown some initiative and merged Inco and Falconbridge to create a new globally competitive Canadian mining giant. But it chose not to.

Any other country in the world would have examined those sales and questioned the companies, but the Conservative government stood idly by and did nothing.

Canadians want their government to defend their interests and help build Canadian champions. The Conservatives chose to do nothing.

The Liberal Party is all for foreign investments and encourages Canadian companies to invest abroad. But unlike the Conservatives, who prefer a laissez-faire approach, the Liberal Party believes that the government must play a leadership role in order to create networks and find solutions to enhance the Canadian economy.

This country could do great things with a government that is ready to show some imagination and leadership. Unfortunately, that is not the case at this time.

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

Mr. Speaker, the issue before us is that if we do not learn the lessons from the debacle that has happened, it will have serious impacts when the government starts its fire sale of our telecommunications, our oil and gas sector and shipping our raw bitumen off to China.

When the government is challenged on the mistakes that it has made, I have noticed that getting a straight and honest answer is sometimes difficult. For example, when the government was challenged on the fact that it absolutely, totally, 190% blew it with Vale and we have a national tragedy unfolding in Sudbury, the industry minister claimed that at the time of the Vale takeover, when nickel prices were the highest in memory and there was a massive bidding war, that Sudbury “was in the valley of death and Vale had to come along and save the poor people of Sudbury because they were going to lose their future”. It was a complete misrepresentation. That was only three years ago.

Why does my colleague think the minister could not have done the honest thing and stood up and said that he should have done better, that he should have paid attention to the file and that he should have known that industry but that he did not and he blew it?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, the member summarized it very well. The reality is that the minister, when he talked about the valley of death, was speaking his mind, perhaps far too candidly for the occasion, and did not appreciate the difficulties and, in fact, the anguish that people in northern Ontario are going through.

Let us face it, we have a government that believes in free markets and does not believe in looking at the specific circumstances of different regions of our country and of different industries and adapting to those circumstances, realizing what is at stake. We have a government that signed up, read free market 101 and follows that blindly.

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

Mr. Speaker, I am glad the member has identified himself as one of the good Liberals and not one of those bad Liberals from the past where, under successive Liberal majority governments, not a single foreign takeover was blocked or even came under review. However, I am glad they are onside on this motion and I really did enjoy the member's comments.

In 2007, for the first time since 1999, foreign control of companies operating in Canada held more than half, 52.8%, of the manufacturing assets, up from 46.8% in 2006. Statistics Canada says that the increase was due largely to foreign acquisitions of Canadian-controlled firms, especially in the primary metals and wood and paper.

Does the hon. member believe that this is a matter of strategic importance for Canada and that this trend would ultimately have a hugely detrimental effect on this country's key industries and its future economic growth?

[Marc Garneau, Liberal, Westmount—Ville-Marie, QC]

Mr. Speaker, I will highlight the fact that the member spoke of strategic interests.

I want to mention today that I was involved as a witness at the time when MDA, MacDonald, Dettwiler and Associates, was being reviewed under the Canada Investment Act as to whether it would be of net benefit to Canada for this company to remain in Canadian hands or not. I was one of the witnesses who argued that it should remain in Canadian hands, largely because of my knowledge of the space sector and realizing the strategic importance of MDA to Canada's interests.

Although it represented the only instance where a foreign acquisition was turned down, the member has highlighted a very central point, which is that there has to be a strategic element brought into the Canada Investment Act when we review possible foreign takeovers. National security can be one of those, of course, but there are other strategic interests that come into play, depending on what industrial sector we are talking about. It is important to have that approach when we are considering whether or not a company can take over a Canadian company under the Canada Investment Act.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Mr. Speaker, I am pleased to have the chance to take part in this important debate in the House this evening.

I would also like to thank the member for Westmount—Ville-Marie, who gave a very good speech. He covered a number of important topics that affect all Canadians.

My Liberal colleagues and I firmly believe in the principle behind this motion, that the Investment Canada Act must be reviewed to give Canadians more transparency and accountability.

The Conservative government could have shown leadership in bringing Nortel and RIM together to create a new Canadian innovative giant, but it did not. The Conservative government should have fought every day in every U.S. congressman's, senator's and governor's office to fight buy America and prevent the closure of U.S. steel plants in Hamilton and Nanticoke, but it did not.

The Conservative government should have shown leadership in bringing Inco and Falconbridge together to create a new globally competitive Canadian giant, but it did not. Any country around the world would review these sales and hold those companies accountable, but the Conservative government did not.

Canadians want their government to stand up for Canada and help build Canadian champions. The Prime Minister and his Conservative government are abandoning our future, plain and simple.

Canadians want a government that offers a plan, a government that offers a vision: a vision of where we want Canada to be in 5, 10, 20, 30 years from now; a vision that looks to protect our jobs, our children's jobs and our grandchildren's jobs; a government that does not allow indiscriminate selling off of our resources, leaving us as serfs on our own home soil.

The Conservative government does nothing more than react to the latest crisis, selling off whatever comes up so that it can get it out of the way, hoping that it does not stick to them. Is it doing what is best for Canadians in the long term or simply doing what is expedient in order to get it through the next quarter? We know this is not a way to build a corporation. We have seen what happens when people take a short-term outlook into a corporation. Everything falls apart. It is certainly not a way to build a strong country.

On this side of the House, the Liberal Party supports foreign investment and encourages Canadian companies investing abroad. Unlike the Conservatives, the Liberal Party believes in the positive role of government to lead, to create networks and to find solutions to strengthen the Canadian economy.

In order to understand the significance of the motion that has been put forward today, we should outline some of the history and background that has led to this point.

Inco, once a leading nickel and copper mining company in northern Ontario, was bought out in 2006 by Brazilian CVRD, or Vale. They merged, and Vale Inco is now the second largest producer of nickel in the world with sales of approximately $8 billion in 2009.

Workers at Vale Inco in Sudbury and in Voisey's Bay have been on strike for over 10 months, deadlocked over the issue of nickel price bonuses and pension reform. Local workers, as well as Liberals and the NDP, have pushed hard for the federal government to reveal the agreement and conditions for jobs and investment made under the Investment Canada Act when Vale purchased Inco. The Conservative government gave us nothing.

Falconbridge, also once a leading Canadian nickel and copper mining company in northern Ontario, was bought out by Xstrata of Switzerland in 2006. Xstrata most recently came under scrutiny when it was announced that Xstrata was eliminating 700 jobs from its Timmins facility. The Conservative government did nothing.

Stelco, once a major producer of steel in the Hamilton region, was purchased by U.S. Steel for $2 billion in August 2007. In early 2009, Stelco-U.S. Steel announced it would close its Hamilton and Lake Erie plants, laying off some 700 employees. Citing cost concerns, Stelco-U.S. Steel claimed at the time that it would be closing the two plants and transferring the production south of the border. This has been linked to the U.S. buy American clause, requiring stimulus funds to be used for only U.S.-produced steel.

On May 7, 2009, the industry minister actually did something this time. He sent Stelco-U.S. Steel a demand letter to reopen two plants, claiming the closure violated U.S. Steel's commitment when it took over Stelco. On June 13, Stelco-U.S. Steel reopened its Hamilton plant, but no change was made to the Lake Erie plant. He should have kept going. He did not go after it. He did nothing.

Nortel, after years of turmoil, entered bankruptcy protection in 2009. Since that time, Nortel has sold many of its constituent parts from its wireless enterprise and optics division to foreign companies. In the sell-off of its wireless technology division, the federal government was presented an opportunity to bring together Nortel and RIM of Waterloo to create a newly merged wireless company with RIM and Nortel cutting-edge technology. The Conservative government chose not to do so and refused to review the sale of Nortel's wireless division to Sweden's Ericsson, despite the fact that the Investment Canada Act clearly defined that a review was required. Once again, the Conservative government did nothing. The result was significant.

Expertise and intellectual property with regard to the next generation, as mentioned earlier by my colleague, the long-term evolution, LTE, technology was transferred to Ericsson. LTE is without a doubt the key to technology worth billions of dollars. Significant European and U.S. companies with more than 50% of all global mobile subscribers have declared they are moving to LTE. Among them are Verizon Wireless and AT&T in the U.S., NTT DoCoMo in Japan, China Mobile, Chunghwa in Taiwan, TeliaSonera in Sweden, Telenor in Norway and Sweden, and Bell, Telus, Vodafone, Nokia and Ericsson.

The motion we are debating today specifically challenges whether the Investment Canada Act, which I will refer to as the ICA, empowers the federal government with sufficient tools to ensure Canada's best interests of strengthening the economy and protecting jobs and valuable intellectual property.

A more recent example in the riding north of mine, Timmins—James Bay, the member for which spoke earlier, affects my riding directly because many of the people who used to work at Grant Forest Products live in my riding. Grant Forest Products is in the process of being taken over by Georgia Pacific. Is this a good idea? I do not know. Will it work out well? Is there a net benefit? I would like to think so, but the minister looked at things from a distance and what did he do? He did nothing. He did not check it out. He did not review it.

My NDP colleagues and I agree with the motion before us today that the Investment Canada Act must be reviewed to ensure greater accountability and transparency. We may differ on a few specific changes, but overall we believe it has to be reviewed.

One of the areas that really perturbs me is that every time we bring something up, it is mentioned that we have the Red Wilson report and the Conservatives say that all the economists will tell us that foreign investment is the way to go. Economists have different views and they will tell us what they believe in, but being an economist is one of the few professions where, if an economist is right just once, the economist becomes a genius and a guru in the field. The reality we have to look at is, what is it doing for our communities? What is it doing for Canadians?

Unfortunately, the Conservative government is not taking the Investment Canada Act seriously and is going by ideology as opposed to following the rules on what they should do, making sure there is a net benefit to Canadians. In short, the Conservatives have proven inept in their ability to keep foreign companies accountable for job commitments.

While my Liberal colleagues and I support foreign investment, we do not support takeovers that cut jobs indiscriminately. Unfortunately, the Conservative government fails to recognize the fundamental difference between foreign investment and foreign takeover.

I am out of time and will not be able to say everything I wanted to say. I just want to reiterate how important it is that we have an Investment Canada Act that allows Canada to protect what we have when it comes to natural resources, jobs and what we can offer to Canadians so that our standard of living does not fall to the lowest common denominator on a global basis.

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

Mr. Speaker, Mike Milinkovich, the mayor of Black River-Matheson, has become known in many circles as a passionate fighter for the Nortel pensioners. When people talk about what happened to that great company with Mike, his eyes fill with tears. He cannot believe that something that was such a Canadian cornerstone of an innovative agenda was allowed to be sold off like something at a fire sale, and of course the workers were totally betrayed on their pensions. We have seen nothing but indifference from the government.

If my hon. colleague talks to people in the mining sector out of North Bay, Sudbury and Timmins, the epicentre of international mining, about what has happened at Falconbridge and Inco, they will say that they never would have believed that a tragedy like this would have been allowed to happen with such an immense treasured resource that we have in northern Ontario. They will say that they will never recover from what the government did.

My hon. colleague knows people in the mining sector across the north. What are people telling him about the government's complete failure to understand the need for due diligence over the sales that have been undertaken on its watch?

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Mr. Speaker, my hon. colleague from Timmins—James Bay is absolutely right.

When we look at where assets like Nortel started from, they did not start on their own. I spoke earlier about vision, about being able to see where we want to be down the road. Nortel is a prime example of where the federal government was involved right from the beginning. The federal government helped to develop it, helped to get it on its feet and going.

What we see on the other side of the House is a Conservative government that says, “Don't worry about it. Let the market take care of things. Leave it wide open. Don't worry about. The market forces will take care of it.”

Adam Smith is their hero, but Adam Smith lived hundreds of years ago. Things have changed a bit since the day when people went around in horse and buggies. We have changed. Technology has changed. Our needs have changed.

Leaving it wide open really destroys it and allows big multinationals to come in and basically take what they want and leave the rest. That does not benefit people in northern Ontario.

What I am hearing is that allowing large foreign nationals to come into northern Ontario without checking what they are going to do eliminates the vision that a Canadian government should be providing. The Conservative government is not providing any vision.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, this is just a comment.

I would like the debate in this House to be factual. It is not often that that is not the case.

I want to reference the Stelco situation, which the member may not know about. Stelco was in bankruptcy and was looking for a buyer for a number of years. It was threatening to close down and everyone would lose their jobs.

U.S. Steel came along to bail it out and purchase Stelco. U.S. Steel ran into some difficulties. We had an agreement through the investment plan to allow U.S. Steel to buy it and it would guarantee employment. U.S. Steel did not follow through on that, and we have taken it to court on that. We have followed through on the commitments made.

In addition, members should know that the steel union did not comment on the buy American piece because those restrictions on structural steel in the U.S. had been in place since 1971 and had not changed. In fact, the president of the steel union for North America is actually a Canadian.

[Anthony Rota, Liberal, Nipissing—Timiskaming, ON]

Mr. Speaker, I just want to tell the hon. member that I will be in Burlington this weekend and I am looking forward to seeing his fine city.

As far as Stelco goes and the two locations, it is important to note and I did mention it, that the minister actually did write a demand letter asking them to open both locations, or demanding that they open both locations.

What we are looking at is how effective the minister was. They complained about the softwood lumber agreement saying, “We are spending all our time in court and we are not getting any action”. The Conservatives basically gave away the softwood lumber industry to the United States, and we had to kowtow to the Americans on that one.

All of a sudden they are saying that being in court is not such a bad idea when it applies to them. What are the actions? One of them opened up, the other one did not. There are Canadian jobs that do not exist in the steel manufacturing sector because of the government.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, I would have liked to ask a question of the Liberal member who just spoke. I would have liked to know how he distinguishes between foreign investment and foreign ownership.

During questions and comments, I was able to share some thoughts, but I talked mainly about the position of the Bloc Québécois, which will support the NDP motion.

The motion contains names of companies that have been affected by foreign takeovers. Many of these Canadian companies were subject to foreign takeovers that ultimately had a disastrous impact on the Canadian economy.

The Conservatives' economic policy is easy to define. It is based on doctrine and blind dogma, not on tangible, measurable realities.

To the Conservatives, foreign investment automatically means more modern equipment and increased productivity. To the Conservatives, putting a stop to foreign ownership means putting a stop to economic growth. Yet we know that this is completely false.

Unfortunately, though, as we can see from the examples in this motion, sometimes foreign ownership means closures, layoffs and breaking agreements with governments.

We support the NDP motion for several reasons, but since I am short of time, I would like to mention one in particular. The other parties talked about the resources of some of the companies that were named. I want to talk about telecommunications, because it is also mentioned in the motion. In committee, we are analyzing Globalive's purchase of a portion of the spectrum. The CRTC considers Globalive to be foreign interests that go beyond the allowable limit of foreign ownership.

What happened was that the government sold Globalive spectrum licences for $442 million without knowing whether the company qualified for licences. The industry minister testified before the committee. I would like to read a short quote that says a lot: “Before issuing spectrum licences, Industry Canada must confirm compliance with these ownership and control requirements.”

Long before the CRTC made its ruling, spectrum licences had been sold to Globalive, but no verification had been done nor had the CRTC been asked to weigh in. The CRTC made its ruling and the Minister of Industry issued an order to make everything quasi legal. We know full well that this is a roundabout way of opening the door to foreign ownership and liberalizing telecommunications.

The chair of the CRTC also testified. He proposed two rules to liberalize foreign ownership:

Here is the simple approach consisting of two rules that we propose: First, no foreign entity should be allowed to own, directly or indirectly, more than 49% of the issued voting shares of a Canadian communications company. Secondly, no foreign entity should have “control in fact” of a Canadian communications company.

The CRTC's position is clear. Major companies also testified in committee. A number of them are completely in favour of liberalization.

Others, such as Bell Canada, agree—in part, not completely—with the chair of the CRTC that foreign ownership of the issued voting shares be limited to 49%.

With respect to communications, the first bill introduced stated very clearly that it was a matter of sovereignty and identity. Given the convergence of telecommunications, it becomes difficult to separate telecommunications and broadcasting. That is why the Bloc Québécois introduced a private member's bill in the House calling for the creation of a “QRTC” a Quebec radio-television and telecommunications commission precisely to protect what the Conservative government does not want to protect with regard to foreign ownership: sovereignty over identity and culture for Quebec.

The Bloc is in favour of this motion.

[The Acting Speaker, Conservative, Barry Devolin]

It being 5:15 p.m., it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the supply proceedings.

The question is on the motion. Is it the pleasure of the House to adopt the motion?