Mr. Speaker, it is my honour to speak today to the opposition motion regarding the Investment Canada Act.
I will be sharing my time with the fine member for Don Valley West.
I would like to ensure that everyone understands the six factors listed in the Investment Canada Act and why they are important as part of the review process of the act as it stands today. I am working under the assumption that everybody in the House has read them. However, I want to ensure that my constituents in Burlington have an understanding of the process now, what the law is now and what the evaluation criteria are on foreign investment in Canada.
I will list the six criteria and then I will talk about why they are important. The first is the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, on resource processing and on the utilization of parts, components and services produced here in Canada.
The second of the six criteria is the degree and significance of participation by Canadians in the Canadian business.
The third criterion is the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada.
The fourth factor considered in the Investment Canada Act, which the minister will review and have staff provide information on, and not just on this particular deal that seems to be today's topic but all deals by foreign entities, is the effect of the investment on competition within any industry or industries in Canada.
The fifth criterion is the compatibility of the investment with national, industrial, economic and cultural policies.
Finally, the sixth criterion is the contribution of the investment to Canada’s ability to compete in world markets.
Those are all the criteria set out in legislation, easily found on the Internet and readable by everyone, including those who are investing in or wish to invest in Canada. They provide an understanding of the criteria set out in law for their decision making in terms of pursuing a Canadian company. Of course, the Investment Canada Act is important for foreign companies buying Canadian companies. There are no restrictions on Canadian companies purchasing other Canadian companies. It does not affect any industrial change that may happen when companies want to expand or change product lines within Canada. Canadian companies are more than welcome to make those investments within the country. However, we do need a regulatory framework, which we have, that allows the government and the minister of the day to look at what is good for Canada in the overall picture of a foreign purchase.
I will begin with the last criterion, which is the contribution of the investment and Canada’s ability to compete in world markets, because it is important. It is the criterion the minister will consider by asking if it will make Canada more or less competitive. There is no criterion that says we want to hurt Canada's ability to compete in the world markets.
When we look at any industry today, we need to ask if it will help Canada to be more productive and play a bigger role in the world marketplace. Let us face it, we are not kidding anybody. Everyone operates in a global market. Very few businesses rely on the local market, although some retail businesses do, but even in my community of Burlington, the largest employer, a pork slaughterhouse that packages materials, has 800 employees and its major customers are overseas. It sells in Canada and in North America but it is able to reach out to other parts of the world. The company happens to be owned by an American company, with some local equity and local owners involved.
However, everybody operates in that field and we need a criterion, which we have in the Investment Canada Act. When we look at somebody else buying a Canadian company, we need to look at whether we would be better off having access to marketplaces that we might not have had access to because the Canadian company was too small, or it did not have the delivery network that often would come along with an acquisition or where another company in another part of the world have distribution networks that were not available to the Canadian company. Vice versa, if it reduces our ability as a Canadian company to access other markets or reduces our ability as Canadians to produce and sell around the world, that criterion can be used to stop an acquisition. At least it is part of the criteria.
I will talk about the compatibility of the investment with national, industrial, economic and cultural policies. We have those criteria in there so if there is a purchase of a property, or a business or assets that have a cultural impact on Canada, we have the criteria by which the minister can evaluate what the impact will be on the cultural identity of Canada. If it will hurt the cultural identity of Canada, it is an opportunity for the minister of the day to say that it is not a good investment for Canada because it is against our cultural policies. It gives the government an opportunity to evaluate it. This is the kind of review that will occur on any acquisition that triggers the Investment Canada Act.
Regarding the effect of the investment on competition within the industry and industries in Canada, a key component is we do not think it is a good thing for foreign investment to come into Canada and create monopolies. We on our side of the House believe in competition. We have made policies, whether through free trade or industry, through our industry committee and our industry minister, to increase competition in telecommunications. We think competition provides better products and services to individuals because they have more choice. It drives down prices normally and also drives innovation and change because the businesses want to keep up with the competition. If they do not have any competition, they do not need to change, or improve or provide customer service. However, through competition and innovation that will happen. It is a criterion of the Investment Canada Act that is presently in place, one that the current and previous ministers have used to evaluate where we go.
That is only three of the six. There are six criteria of which everybody needs to be aware. Investments by foreign entities in Canada are not made without any scrutiny, as was indicated by the previous questioner that these things were not being applied. The minister will look at each one, whatever the circumstance might be, and at how it affects Canada. Those decisions will be made in the best interests of Canada in its long-term economic growth and prosperity.