Debates of Oct. 2nd, 2012

Opposition Motion—Nexen

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, natural resources are a source of immense wealth for Canada. In this sector, as in many others, foreign investment is an important lever in the Canadian economy. It creates jobs and encourages the exchange of knowledge and technology.

In the oil and gas sector, foreign companies' assets are worth nearly $181 billion, according to Statistics Canada. In comparison, Canadian companies' assets are worth $337 billion.

The purchase of Canada's 12th largest oil and gas company, Nexen Inc., by China National Offshore Oil Corporation, or CNOOC, for $15.1 billion clearly illustrates a growing trend. It reminds us that with the tremendous wealth that we have in this country comes great responsibility. We must develop our resources responsibly and in such a way that our wealth benefits all Canadians.

Foreign investments are increasing in the natural resource sector, especially from state-owned enterprises like CNOOC. Chinese investments rose from $113 million in 2004 to $14.1 billion in less than a decade. A strong trend along the same lines has also been noted in the case of companies from the United Arab Emirates, Russia, Singapore and France.

In fact, investments from state-owned enterprises are targeting the natural resources sector more and more. In 2009, foreign assets in the oil and gas sector accounted for 35%. The proportion of foreign assets involved in the oil sands development, for instance, is becoming particularly high.

Surprisingly, it is the CEOs of Canadian oil companies who are beginning to worry about the limits on foreign acquisitions.

Top oil industry executives are asking Ottawa for rules to protect Canadian ownership of major oil sands companies from a flood of foreign investment expected in the sector.

Canada’s oil sands contain the third-largest crude oil reserves in the world and are a strategically critical resource for the country.... [They note that] the deal signals growing foreign interest in the oil sands and insist [that] Ottawa needs to ensure a substantial level of domestic ownership as more deals loom.

It is more important and timely than ever to review the Investment Canada Act and, in particular, the murky net benefit to Canada provisions that the Minister of Industry must determine if he is to approve a foreign takeover, such as CNOOC's purchase of Nexen. At this juncture important weight must given to strategic considerations about the ownership of our natural resources far beyond the time horizon of the deal whose merits Canadians are debating.

As Murray Edwards, the CEO of Canadian Natural Resources Limited, one of Canada’s biggest energy companies and a major oil sands player, put it:

I think it is important to get some ground rules in place before the next one.

The NDP could not have been clearer. We are calling on this government to launch public hearings so that Canadians from all backgrounds and experts can have their say regarding CNOOC's plans to purchase Nexen.

For three years now, the NDP has been calling for a review of the Investment Canada Act. According to Industry Canada, nearly 15,000 Canadian companies have been purchased since that legislation was passed in 1985. Only two attempts have been blocked. We have a review process that is a complete farce, whereby the transactions are either approved or blocked depending on how the decision will affect the government's popularity.

“Net benefit to Canada” is not clearly defined in the legislation, which causes uncertainty for both the investors and the communities that are likely to be affected. Ultimately, the Minister of Industry is the only person who has the authority to decide whether the transaction provides a net benefit to Canada.

Again, the NDP's position on what constitutes a net benefit could not be clearer. The purpose of the Investment Canada 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...

This definition of net benefit to Canada is taken from the NDP motion that the government unanimously supported in 2010. It expresses a clear and unequivocal desire by the House to amend the Investment Canada Act.

By voting in favour of the motion, the Conservative government supports the NDP's key demands. The government accepted the requirement of mandatory public hearings involving the communities affected by a transaction under review, and the public disclosure of all the conditions attached to the approval of an acquisition.

The NDP motion also asked that the legislation provide sanctions in the event of a breach of the conditions attached to a transaction. The Conservatives did not honour that promise, unfortunately. Experts from the firm Blakes, Cassels & Graydon also underscored the importance of broader consultations among the stakeholders, in order to provide opportunities to discuss the concerns of the industrial sectors, the unions, environmental groups and the affected communities.

Concerns over our country's national security should take greater priority in the debate over ownership of our natural resources. The Canadian Security and Intelligence Service has also issued warnings regarding foreign acquisitions in key sectors of the economy. Such is the case when it comes to intellectual property and technology transfers.

It is no surprise that the criteria in the Investment Canada Act that affect issues of national security are just as vague as those governing net benefit.

It is solely up to the minister to determine whether a foreign investment poses a risk to national security. That is purely arbitrary. In the United States, the law specifies that a committee must examine foreign investments and immediately consider that national security may be at risk when foreign investments touch on crucial sectors, such as infrastructure, mining, transportation, energy and key industrial capabilities.

In short, where American law is clear, Canadian law is vague.

We are at a crossroads. The concerns of Canadians, Conservative ministers and backbenchers are unequivocal. Private sector executives are asking for clearer rules for foreign takeovers. And so is the NDP.

It is time for the government to make good on its promises and review the Investment Canada Act. It is time to consult Canadians about one of the most significant transactions in the history of this country, a transaction that will create an important precedent for our foreign investment policy.

The NDP is calling for public hearings to be held to allow the various stakeholders to have their say. We are asking the government to finally go ahead with a complete review of the Investment Canada Act. We are asking that the act's objective be to promote foreign investment while fostering the development and prosperity of Canadian communities and the creation of high-quality jobs. We are asking for investments be made in accordance with the laws and governance best practices, in an environmentally responsible way and with the utmost transparency.

We owe it to Canadians to exercise exemplary diligence.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I thank the member for LaSalle—Émard for her very important speech. She spoke about a key national security issue, which is CNOOC's takeover of Nexen.

I am particularly concerned that the government of the current Prime Minister chose to reject expert advice that the term “national security” should be defined and that there should be objective criteria within the Investment Canada Act. This was a recommendation that came when the special blue-ribbon panel was put together, following the moment when Minmetals nearly bought a Canadian mining giant.

The advice was objective criteria and an objective definition of national security. The Conservatives chose to ignore that advice, claiming in the 2009 notes to the Investment Canada Act within the Canada Gazette that the term was a fluid concept and impossible to define.

Now we know CSIS has national security concerns about this sale. Why do we not have hearings across the country on the national security impacts?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I thank the member for Saanich—Gulf Islands for her very apt comment.

This brings up the need to hold public hearings to clearly define the net benefit to Canada and to address national security issues, especially with respect to Canada's strategic resources. She confirmed the importance of holding such hearings.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, the NDP is trying to change its tune on investment and trade.

In the past, the New Democratic Party has always opposed free trade agreements, except last spring when we were discussing the agreement with Jordan. It has always been against any foreign investment.

Many of Canada's investments are obviously made outside the country. These investments are important and create jobs here. Furthermore, foreign investment creates jobs in Canada.

What is the NDP's current position? And what is the NDP's position on the agreement between CNOOC and Nexen?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, I thank the member, who sits on the Standing Committee on Industry, Science and Technology for his question and comments.

Our position is that we must consult Canadians. That is what we have done in recent months. We went to meet with various stakeholders to better understand their positions. Our position is based on those consultations, and we want to convince the government of the need to review the Investment Canada Act and to hold public consultations.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Mr. Speaker, I thank my hon. colleague from LaSalle—Émard for her speech.

I would like to explore the question raised by my hon. Liberal colleague a little more. Clearly, the two parties that have been in power for the past 10 years have shown how much they like making these decisions behind closed doors.

I wonder if my colleague could expand on her thoughts regarding the openness that must be shown to all Canadians, in order to better understand the issues our society will face in the future?

[Hélène LeBlanc, NDP, LaSalle—Émard, QC]

Mr. Speaker, first of all, we are in the age of information. People are increasingly informed and want to actively participate in our democracy.

It always upsets me when the Conservative government refuses to listen to what Canadians and all stakeholders have to say, especially when it comes to issues as important as this one. That is what the NDP wants to focus on, so that voices from across Canada can be heard regarding the issues that concern us all.

[Eve Adams, Conservative, Parliamentary Secretary to the Minister of Veterans Affairs]

Mr. Speaker, I will be splitting my time with the Minister of State for Small Business and Tourism.

Our Conservative government has a strong record of standing up for the Canadian economy at home and abroad and for Canadian values and interests on the international stage.

Investment from our international trading partners plays an important role in the Canadian economy. Indeed, investment is critical to our economy. It helps Canadian companies find new capital and enables them to expand, innovate and create jobs for Canadians for our neighbours. That is why we have a broad framework in place to promote trade and investment, while protecting Canadian interests.

The Investment Canada Act provides a sound and tested process to review significant acquisitions of Canadian enterprises by non-Canadian companies to determine if they are likely to be of net benefit to Canada. While a company files an application for review under the Investment Canada Act, the Minister of Industry will conduct a thorough review of the proposed investment. Under the act, where any investment, including the one the hon. members opposite mentioned, is subject to review, the Minister of Industry must approve an investor's application for review before an investor can implement an acquisition. An application for review is only approved where the Minister of Industry is satisfied, based on the plans, undertakings and other representations of the investor, that the investment is likely to give net benefit to Canada.

In making that determination of net benefit, the minister considers the factors listed in section 20 of the act.

Among these factors is the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, on resource processing, on the utilization of parts, components and services produced in Canada and on exports from Canada. Another factor is the degree and significance of participation by Canadians and Canadian business, or new Canadian business, and in any industry or industries in Canada of which the Canadian business or new Canadian business forms or would form a part. Another factor is the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada. Another is the effect of the investment on competition within any industry or industries in Canada. There is also the compatibility of the investment with national, industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives stated by the government or legislature of any province likely to be significantly affected by the investment. Also there is the contribution of the investment to Canada's ability to compete in world markets.

The review process under the act is clearly rigorous. As part of the process, the minister must, and does, consider the view of a variety of stakeholders and consult affected provinces or territories, as well as other government departments. In addition, as noted by the opposition, any member or group that has a view on any specific investment proposal may express its views, which will be welcomed during the review process.

Also, for every investment by an SOE, regardless of its source, as part of the assessment of the factors in the act, the Minister of Industry considers the extent to which a company is controlled by a state and whether it operates on a commercial basis.

During the review process, investors generally provide plans and undertakings to support their view that their investments are likely to be of net benefit to Canada.

The act sets out protections for the information obtained from an investor or Canadian business. This protection enables us to obtain the information we need from the business involved in the transaction. This data is essential to conducting a thorough review, while preventing the harm to the investor and Canadian businesses and jobs that could come from disclosure.

We are pleased by the interest of Canadians in this process and endeavour to provide information whenever possible. The minister will take the time necessary to conduct a thorough and careful review of CNOOC's proposed acquisition of Nexen and will not approve it unless satisfied that it is likely to be of net benefit to Canada.

Our Conservative government has a clear track record of listening to Canadians on what matters most of all to us: jobs, economic stability and safe communities. That is why we have demonstrated such strong economic growth, job creation and prosperity in Canada.

In contrast, the NDP still clearly favours reckless economic policies, such as the carbon tax, that would deter investments, kill jobs, raise the price of gasoline by 10¢ a litre and hurt—

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

Mr. Speaker, I rise on a point of order.

I think misrepresentation is beneath the member. She should apologize for misrepresenting facts to the House. Otherwise, this is going to descend into farce.

[The Deputy Speaker]

I would remind the member that is not a point of order.

[Elizabeth May, Green, Saanich—Gulf Islands, BC]

Mr. Speaker, I rise on a point of order.

I had assumed that my hon. colleague and friend from Burnaby—New Westminster would object to the current content of the parliamentary secretary's speech because it has no relevance to the issue before the House today, and this I believe is a proper point of order.

[The Deputy Speaker]

With regard to the point of order, the debate over relevance will go on forever in the House. As to what is relevant and what is not, this one certainly is close enough to the topic of the day to fall within the general scope of what is relevant.

Resuming debate.

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Thank you, Mr. Speaker.

For the record, this debate is about the economy. It is about creating Canadian jobs and protecting jobs and about encouraging investment in our Canadian businesses and in our Canadian families.

Just as a point of clarification, it was the NDP's platform proposal, I believe on page 4, that listed $21 billion of new revenue that the government would generate through a carbon tax.

The Leader of the Opposition went further during his debate and—

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

Mr. Speaker, I rise on a point of order.

She does not know what she is talking about because she said this is a debate about the economy.

This is a debate about the Nexen takeover—

[The Deputy Speaker]

Order, please.

That is not a point of order.

Resuming debate.

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, this is terribly insulting. It is on page 4. He might want to pull his platform.

What I would like to do, though, is to thank the House for this opportunity to discuss this very important issue, to encourage additional debate on the issue and to ensure that, at the end of the day, any review of any foreign investment provides a very clear and obvious net benefit to Canada and to our economy.

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

Mr. Speaker, I listened with great fascination and some amusement, although maybe more concern, to my hon. colleague when she went off on her fantasy journey about carbon taxes.

However, that is not why we are here and I am surprised that she brought that up to derail the conversation.

I would like to ask her about the central issue, which is about selling our natural resource sector to a state-owned Chinese enterprise.

I am not sure if she has read the CSIS report. I think she would do well to read it. I do not know if her colleagues have read the CSIS report. The CSIS report on national security has raised specific questions about the foreign takeover of Canada's mineral and energy sector by state-owned enterprises.

The Globe and Mail editorial, dated September 25, stated:

Foreign espionage is surely not a “net benefit to Canada.”

I think we should take it very seriously in the House when CSIS is raising alarm bells that Canada is vulnerable on the issue of foreign investment by state-owned enterprises.

I would like to ask my hon. colleague if she thinks the issue of espionage by the Chinese government against our oil sector is an issue that the government has even considered.

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, I find it interesting that the members opposite get up and start making very personal attacks about people as soon as the carbon tax is raised. I think that, clearly, the opposition is quite embarrassed about its $21 billion tax on Canadian families. It is something that would raise the price of everything that people consume. It would raise—

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

We are talking about foreign espionage—

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, we are talking about the economy.

I think we have no lessons to take from the NDP, to be fair. Canada's economy is ranked as the top economy in the world among developed countries. That is not us saying that. It is the IMF saying that. It is the OECD saying that.

Clearly, we have a very solid plan to ensure that the Canadian economy continues to succeed.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I am sure the member would recognize that many Canadians have a lack of trust in the Conservative government regarding foreign investment.

A good example of that is the potash industry in the province of Saskatchewan and the amount of resistance that had to be brought to the table by individuals, such as the premier and hundreds, if not thousands, of others, to try to wake up the Prime Minister on that particular foreign investment.

The member for Wascana and individuals like him challenged the government at the time, saying that we needed to get more clarity and more direction from the government in terms of the whole issue of foreign investment, good and bad. The government has not been forthright in providing those rules, which would ensure a sense of comfort for those thousands of Canadians who are following this issue and who want to know that the government genuinely cares about foreign investment.

When will the government bring forward the necessary rules to provide clarity on this critically important issue?

[Eve Adams, Conservative, Mississauga—Brampton South, ON]

Mr. Speaker, as I indicated during my remarks, under section 20 of the act, there are six very clear principles that need to be addressed by the Minister of Industry as he reviews any possible investment by a foreign state-owned enterprise, or SOE.

Just to provide some level of comfort to viewers at home, Canada has the strongest economy in the G7. No less than German Chancellor Angela Merkel has said:

Canada's path of great budgetary discipline and a very heavy emphasis on growth and overcoming the crisis, not living on borrowed money, can be an example for the way in which problems on the other side of the Atlantic can be addressed.... This is also the right solution for Europe.

I just want to reassure my neighbours back home that while others might bluster and come up with all sorts of, frankly, scare tactics, our government continues to stay focused on the economy and on ensuring that we do what is best for Canadians and Canadian families. We are not about raising the price of gasoline by 10¢ a litre. We understand the devastating impact that would have on the economy. We understand that we need to attract solid, reasonable foreign investment to ensure that we have capital for our businesses to grow.

[Maxime Bernier, Conservative, Minister of State (Small Business and Tourism)]

Mr. Speaker, I am very pleased to rise today to discuss with my opposition colleagues, both Liberal and New Democrat, the motion before the House related to foreign investment in Canada.

In general, the foreign investments made in Canada by outside companies are very beneficial to the Canadian economy. Our government is open to foreign investment. The Minister of Industry currently has before him a proposed foreign investment that he is analyzing under the Investment Canada Act. I would like to remind hon. members that this legislation was passed in 1985 by Brian Mulroney's Conservative government, which wanted to promote foreign investment and support Canadian corporations so that they could invest abroad. There is reciprocity in this area: if we prevent foreign companies from investing in Canada, then Canadian companies that want to invest abroad may also be prevented from doing so.

At the time, in 1985, the Conservative government felt that these investments were important to the creation of jobs and the generation of wealth in Canada. The government abolished the Foreign Investment Review Act brought in by the Liberal government of the time, which did not believe that foreign investment was beneficial for Canada. This legislation now includes a test to ensure that foreign investment will benefit all Canadians.

In this time of global economic uncertainty outside our borders, many European countries are currently in a recession. The Americans have a enormous deficit and a giant debt. Given that Canadian entrepreneurs export their products to these markets, we must continue to support investment because it generates wealth. Production is what makes a country grow richer. We can buy only what has been first produced by entrepreneurs. We must promote production and investment—the driving force behind Canada's economy—rather than spending, as some members of the opposition think.

The economic plan that we implemented two years ago is working. Canada is experiencing economic growth. This growth is somewhat fragile because job creators, that is entrepreneurs, export their products abroad and the economic situation in other countries could impact Canada's growth.

For that reason, we must focus on creating jobs and wealth for Canadians. That is what we have done in our latest budgets, thereby showing that Canada is the best country to invest in. Canada is open for business and it invites Canadians and foreigners to invest in it to create wealth.

What is more, Canada is the best country in the G7. Canadian entrepreneurs have created more than 600,000 new jobs since the end of the last recession. Our corporate tax rate is the lowest among the G7 countries. That is important if we want to attract foreign investors who create wealth. The International Monetary Fund continues to rank Canada among the top countries in terms of economic growth and investment. Even Forbes Magazine, the famous business magazine, says that Canada is the best place to invest and to do business. All that is good news for all Canadians because it is people from the private sector who create jobs.

Unlike the opposition, we know that governments do not create jobs; entrepreneurs are the ones who create jobs and wealth. We must encourage them to do so, including by cutting corporate tax rates. When we came to power, the corporate tax rate was 22%. We have considerably reduced that rate. A lower tax rate is important because it leaves businesses with more money to develop their projects, export their products and enter new markets.

Taxing a corporation impedes the creation of wealth because it means taxing investment and production. We must concentrate on reducing taxes, contrary to what the NDP is proposing to do.

The NDP election platform contains its solution to wealth creation: tax Canadians more, and make them spend more and go into debt when they have maxed out their credit cards. It is right there in black and white.

Canadians know that when they have maxed out their credit cards, they must pay their debts. The NDP is urging Canadians to live beyond their means and urging the government to live beyond its means. The NDP wants to continue imposing taxes and encouraging debt, which will leave future generations with a poisoned gift.

We must not tax corporations and we must not impose a carbon tax of $20 billion or more. The NDP is advocating this tax, which will affect families and Canadian consumers.

I mentioned that a tax affects families, but it is important to say that taxing corporations is like taxing individuals because we know that businesses compete with one another. If corporations were made to pay a carbon tax, as the NDP would like, production costs would increase.

A business must be profitable in order to provide investors with a return on their investment. We are investors, through our pension funds invested in Canadian corporations. If a corporation has to pay an additional cost, it will pass on this cost to consumers by increasing the price of its goods or products, or to its shareholders by decreasing the return on their investment, or to the workers that the NDP wants to protect by not giving them a wage increase.

Depending on the competitive environment in which the corporation operates, the individual will always pay the corporation's taxes. It is not true that corporate taxes and personal taxes are two separate taxes. It is one and the same and people know it.

A $20 million carbon tax on corporations is a tax on individuals. At the end of the day, Canadians are all consumers, workers and investors through their pension funds. Thus, personal income tax will rise.

A company is merely a network, a cluster of contracts between suppliers, workers and customers. In a free and democratic country and in all countries, the real individuals are those who pay corporate income tax. That is why the NDP's plan must not be implemented. It would cause a great deal of harm to Canada's economic growth.

I would like to add that it is possible for a foreign investment to be made in Canada or for a company to want to buy shares in a Canadian company. We live in a free country where property rights exist. If shareholders of such a company make a basically unanimous decision to sell their shares, why would the government interfere in a private decision?

The general principle that we must remember is that, if individuals decide to sell their shares, it is because it is in their interest and thus in the interest of Canadians to do so.

When the Government of Canada uses legislation to prevent shareholders from selling their shares, the message we are sending shareholders is that, if they invest in a company, they risk being unable to sell their shares later because the government could intervene.

Rules have been established and companies must follow them. These rules are set out in the Investment Canada Act. These are the rules that the Minister of Industry must follow, and that is what he is going to do in the context of the transaction that we are now dealing with. He will analyze that transaction to ensure that there is a net benefit to Canada.

I am certain that the Minister of Industry will do his job. In the coming weeks, he will inform us of his decision. He will conduct a detailed analysis. We will respect this legislation, which has been in place since 1985 and which has allowed Canada to grow and prosper while allowing Canadians to continue creating jobs.

[Alexandre Boulerice, NDP, Rosemont—La Petite-Patrie, QC]

Mr. Speaker, thank you for allowing me to comment on the Conservative member's speech.

I will immediately disregard the part that I believe stems from the Conservative ideology or from delusions about the NDP's intentions. He will have to answer for that himself.

However, I am concerned about a foreign company purchasing a Canadian asset and national and strategic interests, such as natural resources in the energy sector. I do not understand how a Conservative member cannot see past the interests of Nexen shareholders or understand the concerns of a majority of Quebeckers and Canadians, who are wondering how such a valuable asset and such vital strategic interests could end up in the hands of the Chinese government, and therefore a communist party.

Does he think that is okay? Should we not consult people and see if it is in Canada's best interests to turn over those resources to a government led by a communist party?

[Maxime Bernier, Conservative, Beauce, QC]

Mr. Speaker, unlike my colleague, I believe in the free market and capitalism.

We must remember that my colleague is a member of Québec solidaire in Quebec. If my colleagues in the House are not aware, Québec solidaire is a socialist party that supports nationalizing Quebec's resources. The same goes for the NDP. The preamble of the NDP charter says that it must advocate socialist principles. The NDP wants to advocate socialist principles, sink Canada and tax Canadians. We do not support that point of view.

I hope that the member will part ways with Québec solidaire. He gave money to Québec solidaire to promote communist and socialist principles, yet he just gave me a lecture on capitalism here in the House. I have a hard time understanding that.