Debates of Oct. 2nd, 2012

Canada Revenue Agency

[Cathy McLeod, Conservative, Parliamentary Secretary to the Minister of National Revenue]

Mr. Speaker, the way that Canadians file their taxes is changing and we are changing to meet those needs.

In-person discussions with the agency and Canadians only accounted for 2.5% of the interactions. That said, there are people who will, for a variety of reasons, still need to interact with the CRA in a different manner. Canadians can be assured that the CRA will continue to offer alternatives for taxpayers.

The House resumed consideration of the motion.

Opposition Motion—Nexen

[The Speaker, Conservative, Andrew Scheer]

Order. The hon. member for Winnipeg Centre has three minutes left to conclude his remarks.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I will conclude my remarks by quoting some comments of a noted Canadian journalist. As sensitive as I am to the issue of plagiarism, I want to make sure that we give due credit to columnist Diane Francis and the Huffington Post. I do not quote Diane Francis often, as we disagree on some issues. However, in this case I believe she nails it.

Dealing with the Nexen deal and the CNOOC takeover, she states:

Canadians should be upset and insulted that China's biggest grab for control of a major resource company anywhere in the world is the $15-billion Nexen deal. Clearly, China is testing whether this Boy Scout of a nation will roll over.

She goes on to state:

This is just one of many reasons why Canada must reject this takeover. Another is a warning by CSIS against foreign buyouts of strategic assets, and yet another is that polls show public opposition to the deal.

The third reason she cites is that polls clearly show public opposition to the deal.

Those are three simple reasons for the three minutes that I have left.

Frankly, the third is perhaps the most salient. Canadians have been asked about this deal and have said flatly that they do not want the government to proceed with the deal at this time.

All we are asking in this motion today by the NDP is that there be thorough public consultations. Let us get the best minds in the country, pro and con, for and against, to sit down and discuss whether or not foreign takeovers by state-owned entities such as CNOOC are in the best interests of Canadians. Is that really too much to ask?

In my remarks before question period, I pointed out that the government got rid of the Canadian Wheat Board because it was too much like communism, even though it was just a bunch of prairie farmers acting together in their own best interests. I have heard Conservative members behind closed doors say, “We're going to get rid of that communism, them commie pinkos on the Prairies and their Canadian Wheat Board”. Yet they seem perfectly willing to have a genuine communist dictatorship take over a big piece of our birthright in the Canadian oil patch, that is, our natural resources.

With the one minute I have left, I voice a cautionary note here. It is not just CNOOC. Diane Francis also points out there are hundreds of other corporate appendages of China Inc. on a global acquisition frenzy, with a trillion dollars, gobbling up natural resources and paying premium prices for them, and sometimes wildly extravagant prices because they know the true value of these natural resources in the coming decades and century.

This is our children's birthright. This is a Canadian natural resource. Sinopec, Chinmetals, PetroChina, the China Investment Corporation, and even the city of Tsingtao are currently shopping for oil companies in Calgary. We really have to reflect on whether or not we want these state-owned enterprises to be able to operate in the same way that foreign investors operate.

We are not anti-investment. We believe Canada is open for business, but Canada is not for sale, and we will not allow—

[The Speaker, Conservative, Andrew Scheer]

Order. I regret having to stop the hon. member there.

I will move on to questions and comments. The hon. member for Winnipeg North.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I appreciate the comments made by the member for Winnipeg Centre.

I was questioning members earlier, particularly the Conservative members, regarding CSIS and its concerns about this particular deal and the impact it would have from a security perspective. CSIS is a fairly credible organization when it comes forward to say that we really need to give this deal a second good long look, with the whole issue of due diligence, and so forth.

Would the member not expect the government to even acknowledge this as a valid reason to open up this process to ensure that due diligence is in fact done?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, again I go back to the Conservative columnist Diane Francis, who has a fairly business friendly point of view quite often. She points out that one of the three reasons why Canada must reject this deal is the warning by CSIS against foreign buy-outs of strategic assets that may not be in our national interests and may also be an affront to our national security and long-range planning.

It just galls me that we are not having a national conversation on this subject. We should be consulting Canadians to see if this is what they want. The ad hoc consultation has taken place through polling by various organizations. Overwhelmingly, Canadians are at least apprehensive about this deal and in many cases vehemently against it. They deserve and I believe the government is obliged to have a thorough consultation and examination, with due diligence even beyond what it finds in the Investment Canada Act.

[Chris Alexander, Conservative, Parliamentary Secretary to the Minister of National Defence]

Mr. Speaker, the member opposite claims, and no one in Canada believes him, that the NDP is in favour of investment. The statement almost beggars belief because we have seen so much evidence, indeed overwhelming evidence, to the contrary.

Could the hon. member give us one example of a concerted effort by the NDP leadership to support a foreign investment protection agreement, a free trade agreement, outward investment by a Canadian company or inward investment that creates jobs and growth in this country? Could he give us one high-profile example?

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, we have to reiterate that Canada is open for business and I am the first to agree. However, this is a democracy and the people have spoken through the polls and demonstrated enormous opposition to a Nexen takeover. It is irresponsible not to do an abundance of due diligence in such a controversial and precedent-setting deal, especially with our precious natural resources.

In what little time I had before question period, I pointed out the appalling situation of our manufacturing sector being gutted. As they watched and supervised over the hollowing out of our manufacturing sector, they said that their kids did not want to work in the needle trades in the garment industry anyway.

I used to have 43 garment manufacturers in my riding when I was first elected. There are three left, only one of which still produces anything. Everything else has been contracted to China. However, there was some comfort knowing that at least we have our natural resources, our birthright and natural heritage that we can develop in this country, some of which we should leave in the ground. I have never understood why we are in such a rush to give away all our natural resources at wholesale prices as fast as we possibly can. If a barrel of oil is worth $100 today, it might be worth $500 in 50 years from now. Who knows?

When we had Petro-Canada, that had to be sold because it was seen as socialism. However, now the members opposite favour inviting a communist dictatorship to own a piece of oil patch and give it away. Anyone with a chequebook apparently is allowed to buy up a piece of Canada.

Canada should be open for business; it should not be open for sale to anyone with a fat chequebook.

[Christian Paradis, Conservative, Minister of Industry and Minister of State (Agriculture)]

Mr. Speaker, I would first like to say that I will be sharing my time with the hon. member for Brant. I wish to thank you for the opportunity to speak to the House today.

I will take this opportunity to describe how the Investment Canada Act works and how the Minister of Industry makes decisions. 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.

Today, I will be talking about investments for which my department, Industry Canada, is responsible.

When a foreign investor proposes to purchase a Canadian company, that investor must obey the law. If a proposed investment must be reviewed in terms of its net benefit under the act, the investor cannot close the deal without the approval of the minister responsible. The investor must provide certain information in its application. This includes a business plan for the Canadian company.

Foreign investments are reviewable if the assets of the Canadian company are equal to or greater than a threshold established in the act. The threshold for World Trade Organization member countries is adjusted each year by an amount equivalent to the change in the gross domestic product of the investor’s home country. In 2012, this threshold is $330 million. The threshold for cultural businesses and non-WTO countries remains at the levels established in 1985: $5 million for direct acquisitions and $50 for indirect acquisitions.

Under the act, the Minister of Industry has an initial period of 45 days to consider the proposed investment and decide whether it will have a net benefit. If necessary, the minister can extend this period by 30 days. In addition, the period can be extended if the minister and the investor agree.

Industry Canada only approves applications for review when it is convinced that the plans, undertakings and other information from the investor make it clear that the investment is likely to be of net benefit to Canada.

Let me be clear that in my role as minister of industry, I must make sure that an application is approved only when we are satisfied, based on the plans, undertakings and representations of the investor, that the investment is likely to be of net benefit to Canada.

To determine the possibility of a net benefit, the following factors, listed in section 20 of the act, must be taken into account. They are:

(a) the effect of the investment on the level and nature of economic activity in Canada, including, without limiting the generality of the foregoing, the effect on employment, on resource processing, on the utilization of parts, components and services produced in Canada and on exports from Canada;

(b) the degree and significance of participation by Canadians in the 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;

(c) the effect of the investment on productivity, industrial efficiency, technological development, product innovation and product variety in Canada;

(d) the effect of the investment on competition within any industry or industries in Canada;

(e) the compatibility of the investment with national industrial, economic and cultural policies, taking into consideration industrial, economic and cultural policy objectives enunciated by the government or legislature of any province likely to be significantly affected by the investment; and

(f) the contribution of the investment to Canada’s ability to compete in world markets.

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

Anyone who wishes to express their opinion regarding a specific investment can do so during the review process. This is outlined in the document entitled: “Guidelines—Administrative Procedures”.

According to these guidelines, when unsolicited representations are received that may be contrary to a net benefit determination, the applicants are advised of the nature of these representations and given enough time to respond if they so wish. Once the parties consulted have been able to explain their point of view, discussions are held with the investor and the subject of binding commitments is addressed.

The Investment Review Division also conducts an independent analysis of the acquisition on the basis of the six factors pertaining to net benefits that are set out in section 20 of the act. In the course of this review, the minister responsible for enforcing the act establishes benchmarks on the basis of which the proposed transaction is examined.

For this purpose, the profile of the Canadian business which the investor intends to acquire is examined with due regard to the future prospects of this business if it were to remain independent and not acquired. This would include determining whether the business in question is healthy and has good prospects, or whether instead it has financial problems. This is an important point.

Also taken into consideration are the main strengths of the business, areas for improvement and any challenges it may face. In addition to this, other factors involved in the planned investment are considered, such as the fact that the investor is providing capital or expertise that would not otherwise be accessible to the Canadian business.

In 2011, the Investment Review Division received and dealt with 634 notices of investment. It approved a total of 15 applications for review.

Our government has also been proactive and has updated the act to reflect new conditions.

More specifically, our government introduced the following measures: in 2007, it implemented the “Guidelines – Investment by stated-owned enterprises”; in 2009, it amended the provisions on national security; it amended the act to raise thresholds so that reviews could focus on the transactions that would have the greatest impact on Canada’s economy; it introduced targeted amendments so that the minister would be in a better position to communicate information concerning the review process to the public, and lastly, it published an annual report on the administration of the act.

We need to remember that the context in which international investments occur is constantly changing. We therefore continually review the act to make sure it is up to date and effective.

With respect to the proposed investment, as I said previously, all the time required will be taken to ensure that there is a detailed and attentive review of CNOOC’s plans to acquire Nexen.

The transaction will be approved only if it is likely to be of net benefit to Canada.

With reference to the proposed investment, as stated previously, the necessary time will be taken to conduct a thorough and careful review of CNOOC's proposed acquisition of Nexen. It will not be approved unless there is satisfaction that it is likely to be a net benefit for Canada.

I am happy to have had the opportunity to speak to the House and my colleagues in order to provide details about the Investment Canada Act.

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I appreciate the minister's comments, but he has to know that the government's history with respect to foreign takeovers is not a stellar one.

He will know that when the government approved the foreign takeover of Stelco by U.S. Steel in Hamilton, the company made commitments for both employment and production targets, none of which were met. The government then, rightly I would say, took the company to court, was winning every court challenge and then for some still inexplicable reason dropped the court case, rolled over and let U.S. Steel get away with its abysmal record in our community.

This Thursday is the two-year anniversary of the blast furnace being shut down at U.S. Steel. People are still not back to their jobs. I wonder if the minister could stand and explain to the House, but more important to the members of USW Local 1005, what he will do to act now to protect their jobs, when he rolled over so badly just a little while ago?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, first, we have to see what the market prospects are.

As I said in my speech, this is important because when an investment is studied, we must consider whether it is good that it happens, then see if the company is viable or not and what opportunities will be there in the future.

Under the leadership of my colleague, the President of the Treasury Board, a court case was established and then tremendous undertakings were achieved, as well as benefits for the local community of Hamilton. There were some investments by the company, as well as important capital expenditures.

Going down the road, foreign investments provide the opportunity to have our enterprises be part of the global supply chain. Otherwise, when the market gets low, without new capital, it may be the end of some enterprises.

It is too bad that my colleague has portrayed the situation as a bad one, because this is a good one.

[Kevin Lamoureux, Liberal, Winnipeg North, MB]

Mr. Speaker, I am sure the minister is aware of the concerns that many people on the Prairies had when the government was looking at the whole potash foreign investment issue. It took hundreds of individuals, in particular the premier of Saskatchewan, who ultimately got the Prime Minister to take some action. It was the Liberal finance critic at the time who emphasized how critically important it was that we had clear rules in terms of foreign investment. The government has failed in delivering on those clear rules and now we have a situation where a significant part of our natural resources are once again being looked at on the Prairies.

Does the member not see why it is so important that Canada establish clear and better defined rules in order to deal with the whole issue of foreign investment given the significance and importance of this to all Canadians?

[Christian Paradis, Conservative, Mégantic—L'Érable, QC]

Mr. Speaker, there is a contradiction. My friend across the way is a member of the party that never turned down a single deal in 13 years. In the case of the potash deal, the process was followed under the Investment Canada Act. As he said, the premier had the opportunity to make comments. This was the way the law worked.

After that, we realized we needed to increase transparency and better communicate with the public, so some changes were made back in 2009. We went even further. In 2012 there were more opportunities for the minister to communicate with the public about the fact that if he was not satisfied that a deal would provide a net benefit for the country, he could explain why. This is exactly what we are working on.

Two other major changes were established. We put in place state-owned enterprise guidelines back in 2007 regarding corporate governance as well as the ownership of shares. In 2009 we established provisions for the national security aspect.

That is the way the law evolved and it evolved more under this government compared to the previous government. Why? Because we are pragmatic and welcome foreign investment, but always in the best interests of our country.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I am thankful for the opportunity to speak to the motion before the House.

I will begin by stating that foreign investment plays an important role in the Canadian economy. Investors bring with them knowledge, capabilities and technology which can increase the productivity, efficiency and competitiveness of Canadian firms. These investments provide capital to Canadian-based companies to expand and create jobs for Canadians.

In recognizing the importance of investment, Canada has a broad framework in place to promote trade and investment, while at the same time ensuring that Canadian interests are protected.

Investment flows both ways in and out of Canada. In fact, in the past several years, Canadian companies have invested more abroad than foreign companies have invested in Canada. According to Statistics Canada, the stock of foreign investments into Canada has reached $600.5 billion in 2011, while Canadian companies are even greater investors abroad at $684.5 billion.

The Investment Canada Act provides a mechanism to carefully review significant acquisitions of Canadian enterprises by non-Canadian companies to determine if they are likely to be of net benefit to Canada. It also provides a process to review investments which could pose a threat to national security.

The motion before us asks the government to:

—not make a decision on the proposed takeover of Nexen by CNOOC without conducting thorough public consultations...immediately undertake transparent and accessible public hearings into the issue of foreign ownership in the Canadian energy sector with particular reference to the impact of state-owned enterprises; and...must respect its 2010 promise to clarify in legislation the concept of "net benefit" within the Investment Canada Act.

CNOOC has filed an application for review of its proposed acquisition of Nexen Inc. under the Investment Canada Act and the Minister of Industry is accordingly conducting that review of the proposed investment.

The review process under the act is rigorous. As part of the process, the Minister of Industry must consider the views of various stakeholders and consult affected provinces or territories as well as other government departments.

In addition, there is room for Canadians to express their views. Any person or group that has a view on a specific investment proposal may provide those view to the minister during the review process. I might add, many of the people in my riding have expressed their views to me as their representative. We are the vehicle to express their views in this debate.

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. He will only approve applications 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.

Also, as the investor is a state-owned enterprise, the guideline for investments by state-owned enterprises net benefit assessment, published under the Investment Canada Act, apply to this proposed investment. The guidelines clarify in the review under the ICA, as part of the assessment of the factors listed in section 20 of the act, that the minister will examine: the corporate governance and reporting structure of the non-Canadian proposal; how, and to the extent to which, the non-Canadian is owned or controlled by a state; and whether the Canadian business to be acquired will continue to have the ability to operate on a commercial basis.

As indicated in the guidelines, examples of undertakings that address these issues include: the appointment of Canadians as independent directors on the board; the employment of Canadians in senior management positions; the incorporation of business in Canada; and a Canadian stock exchange listing.

I will now take a moment to explain the confidentiality provisions of the act.

These provisions do not permit comments about specific investments to be made without the investor's prior agreement. Divulging confidential information outside the narrow exceptions of the act is a criminal infraction. 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 strong protections for the information obtained from an investor or Canadian business. This protection is necessary to ensure that investors provide all the information necessary to conduct a thorough review while preventing the harm to the investor and the Canadian business that could come from disclosure.

That said, this government welcomes Canadians' interests in this process and will endeavour to provide information whenever possible.

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. Monitoring may be more frequent. Additional evaluations may be performed based upon the performance of the investor and the duration of the undertakings.

The act provides for remedies where the minister is not satisfied that the investor is meeting its obligations under the act.

The decision to take enforcement measures under the act is based upon the overall performance of the investor in implementing its plans and undertakings. Decisions to take enforcement measures are made on a case-by-case basis based upon 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 implementation of plans or undertakings.

Our government has also been proactive in updating the act to adapt to the changing environment. In particular, our government introduced the state owned enterprise guidelines in 2007; introduced a national security amendment in 2009; amended the act to raise the review threshold, focusing reviews on the transactions that are most significant to the Canadian economy; introduced targeted changes to provide the minister with a greater ability to publicly communicate information on the review process; and published an annual report on the administration of the act.

The climate for international investment is constantly evolving. We will continuously examine the act to ensure it is up to date and effective.

Our targeted improvements to the Investment Canada Act provide greater transparency to the public, more flexibility in enforcement and an alternative to costly and time-consuming litigation.

[Ève Péclet, NDP, La Pointe-de-l'Île, QC]

Mr. Speaker, I have a more general question for my colleague. I am speaking English because I will be reading part of an article that I have in front of me right now.

I hope the member will agree with me that the better interests of Canadians do not only reside in the economy factor but also in the environmental factors: the respect of our own values and our own principles in our economic relationships with other countries.

In the article, it states:

During the 2008 campaign, [the Prime Minister] promised to ban the export of raw bitumen to countries with weaker emissions targets.

[The Prime Minister] said the federal government had the constitutional authority to enforce a ban. And the Prime Minister acknowledged that such a ban could impact exports to Asia.

Later this year, after the 2011 campaign, the Minister of Natural Resources said, “Our 2008 platform commitment remains in effect”.

Is that promise still in effect or will we be selling a Canadian company to a Chinese company when we know China has weaker emissions targets than we have?

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, the standards set out in the Investment Canada Act are very rigorous. It is multifaceted. The member narrowed in on one part but understanding business and understanding investments means that all things need to be taken into consideration. I mentioned in my speech the national security requirements that we added to the act.

Any company that operates in Canada must live by the environmental standards of our country. When a company comes here, it cannot apply different standards to environmental regulations. It is a little narrow to think that a particular investment should be narrowly defined as proposed by the member.

[Sean Casey, Liberal, Charlottetown, PE]

Mr. Speaker, I was interested to hear the member talk about knowing about investment and business. The member would know that probably the greatest enemy to investment and business is uncertainty. Given the government's promise to clarify in legislation the concept of net benefit, an uncertainty exists that is affecting business and our economy as a result of inaction.

What explanation can the member offer for the inaction in the fulfilment of the promise made by the government to clarify the definition of net benefit in the legislation? What is the explanation for the delay?

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, in actual fact the member is totally wrong. He can go online to read the six factors listed in the Investment Canada Act that clearly define and take the uncertainty out of the transaction. These are the changes we have made to the Investment Canada Act.

I do not have the time to give the member the six factors listed here in my notes but I can say that our government has developed this to clearly define what the net benefit is. The member should go online and read those six factors and then he might change his mind on what he has purported, which is that our government has not defined it. They are right there.

[Mylène Freeman, NDP, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I would like to inform you that I am going to share my time with the member for Sudbury.

Canadian resources are above all for the benefit of Canadians. When we consider a case like the acquisition of Nexen by CNOOC, the Conservatives’ penchant for secrecy and control without accountability shows in everything they do. Canadians are losing confidence in our investments because we are not in a position to determine whether an acquisition is in their best interests.

The opposition motion debated in the House today is not necessarily asking for the acquisition of Nexen by CNOOC to be rejected without an appraisal of the situation. It is basically asking that the process leading to a decision be sound. This debate is about transparency and accountability.

It is essential to hold consultations and to clarify the net benefit review process to ensure that the interests of Canadians are truly protected. When the net benefit criteria are not clear, the decision becomes arbitrary. There is neither transparency nor accountability. Even investors are not reassured by this arbitrary process. Until the act is clarified, it is impossible to weigh Canada’s interest against foreign interests.

In 2010, even the Conservatives agreed that the “net benefit” concept should be defined more clearly in the act. The then minister of industry had promised to do so. As we in the House know, the Conservatives do not come through on their promises of transparency. This is not surprising to us. Without this essential clarification, the net benefit is at the mercy of the minister’s own definition. I sincerely believe that this definition is not one that Canadians would accept.

In 2007, the guidelines added by the Conservatives to the act specified among other things that the targeted corporations should pay attention to what senior officials have to say, appoint Canadians to the board of directors and list the corporation’s shares on a Canadian stock exchange. I am not about to disagree that these factors should be taken into account, but the true concerns of Canadians relate more to employment and the environment. As it happens, environmental concerns are missing from the process, and employment is given short shrift.

In the specific case of Nexen, CNOOC has not promised to keep value-added jobs in Canada or to create new jobs. Nor has it promised anything about improving environmental performance.

With regard to the environment, it is not just the lack of promises that is disturbing. The different trade agreements that the Conservatives negotiated without paying attention to the details could prevent us from effectively protecting the environment because they would make the Canadian government open to legal action by foreign companies if it legislates in a responsible manner.

Furthermore, there is a significant risk for our jobs, especially in the processing and refining sectors. Are the Chinese not interested in extracting oil here and refining it in China? I believe that would be in their best interest. In that case, high-quality jobs in Canada's processing sector will be lost. China's refining capacity is at 85%. There are no guarantees that China will not use Canadian crude for the remaining 15%. That is hardly a net benefit.

While the Conservatives' priority is to find out who will be on the board of directors, jobs and the environment are the priorities of Canadians and the NDP. We must also not forget national security, which has been discussed a great deal recently, and security of intellectual property.

The Canadian Security Intelligence Service, CSIS, issued a warning in its most recent report:

When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests. The foreign entities might well exploit that control in an effort to facilitate illegal transfers of technology or to engage in other espionage and other foreign interference activities.

The People's Republic of China has a 64.45% stake in CNOOC and has a ministry of political and ideological affairs. In addition, China also has a party committee in the company. Better yet, the company president considers deepwater oil rigs to be its mobile national territory and a strategic weapon. All this seems to be consistent with the warnings that the Conservatives seem to be ignoring.

We must also consider that this acquisition is probably not an isolated event. China is making massive investments in natural resources abroad, which could have disastrous consequences.

For example, take China's investments in and purchases of agricultural land in Africa. The strategy is obvious: guarantee food security for China, which in turn weakens Africa's food security. It is vital that we prevent this type of phenomenon from taking place in Canada.

After making a few strategic purchases, China or any other foreign power could rapidly gain significant control of our natural resources. There is a definite risk that a precedent will be set. We are talking about the nationalization of our natural resources for the benefit of another nation. I believe this is a mistake.

The Conservatives will of course answer that investments in the economy are necessary, and on that we agree. Certainly, such investments help our economy. But while they want to have investments that are controlled outside Canada, I think the best way of promoting innovation and developing the Canadian economy is really to have Canadian investments.

In an article published in Canada Business entitled “Canadian business must invest more if Canada is to remain competitive”, journalist Hugh McKenna quoted a report prepared by Deloitte, “The Future of Productivity: Clear choices for a competitive Canada”. I took two points from that article that are being completely ignored by the Conservatives: first, the real problem with Canadian productivity is the lack of investment and capacity for expansion on the part of Canadian companies; second, the government should make the foreign investment review process more transparent.

Those positions reflect the concerns felt by Canadians. Unfortunately, the Conservatives do not seem to have the same concerns about real prosperity, jobs, the environment and the security of Canada.

They are even working against those principles by raising the threshold in the act for a transaction that is subject to the net benefit review. At present, the Investment Canada Act provides that transactions with a value of $330 million or over are to be reviewed by the Minister of Industry, but that threshold will shortly be raised to $1 billion or over. The government is clearly moving backwards when it comes to standing up for Canadian interests.

To conclude, I have to point out the perfect ironic illustration of how less than zealous the Conservatives are when it comes to standing up for Canadian interests. Although the Conservatives seem set on approving the Nexen purchase with no discussion, the acquisition of the agricultural corporation Viterra by Glencore, which the Conservatives had approved, is currently being subjected to careful scrutiny by China’s anti-monopoly agency. I find that interesting.

I repeat: as a general rule, in this debate, we should not be replacing one arbitrary approach with another.

The NDP is not calling for the deal to be simply rejected, but we want to be sure that thorough public consultations are held and transparent, accessible public hearings are organized on the issue of foreign ownership in the Canadian energy sector. We want to know what foreign governments are going to be doing in Canada, and obviously we want to clarify what the legislation says about the concept of “net benefit”.

I see my time is up. Thank you.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I would first like to thank my hon. colleague for sharing her time with me and allowing me to speak on such an important issue. As the MP for Sudbury, I can say my constituents have been truly affected by the net benefit of the Investment Canada Act with the foreign takeovers of both Inco and Falconbridge a few years back.

One thing I would like to get the member's comment on is in relation to what we have been talking about. In spite of previous promises by the Conservatives to clarify the net benefit test and make the review process more transparent, they are conducting secretive and unaccountable reviews without consulting Canadians or presenting information on how to deal with the impact on employment, the environment and our energy sector in general. While this will have a dramatic impact not only in Alberta and right across the country, I would like to know how this will affect her riding.

[Mylène Freeman, NDP, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, the fact that it is not clear what a net benefit is, is actually impacting investment across the country, because foreign investors are not quite sure whether it is going to go through or what they are looking at when these things are on the table. It is not just Canadians who are not sure what is going on. In fact, Canadians are losing out because foreign companies will not want to invest in Canada if they are unsure of what the process is. This is really a lose-lose situation. Again, the Conservatives agreed back in 2010 that was the case and they have not done anything about it yet.

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

Mr. Speaker, I am very grateful that the official opposition has raised today's opposition debate on the CNOOC-Nexen deal, but I do not think we can examine what that really means without the larger context that the Privy Council will be deciding on a treaty—without a debate or vote in the House, 21 sitting days from September 26 when the treaty was tabled for Canada-China investment—that will bind Canada for a minimum of 15 years and protect Nexen's new entity as a branch of CNOOC, if this goes ahead, with rights and privileges far in excess of what Nexen now has as a Canadian company. Nexen will be a new CNOOC if this agreement goes through.

Since there is no debate or vote, unless there is strong opposition from Conservative members of Parliament to tell their government that they cannot accept this, we are going to see Chinese state-owned enterprises having the right to complain against laws they do not like that have been passed in this place, the right to complain against health, worker and safety protection and the right to sue, as it is now doing. China is currently suing Belgium for $3 billion. I would like the hon. member's comments on this particular agreement.

[Mylène Freeman, NDP, Argenteuil—Papineau—Mirabel, QC]

Yes, Mr. Speaker, I agree that is a problem. As I mentioned in my speech, this is obviously largely worrying when it comes to our environmental standards. We can be sure it will not be good for our economy or our environment.

The secrecy and non-consultation is something we often see with the government. It is not just that this agreement with China she is speaking of is going to be pushed through based on the whim of the government. It seems that most things are agreed to that way and sort of shoved down the throats of Canadians. That is why New Democrats are advocating for public consultations.

[Glenn Thibeault, NDP, Sudbury, ON]

Mr. Speaker, I am pleased to rise in the House today to speak to the motion put forward by the NDP's natural resource critic, the member for Burnaby—New Westminster. Specifically, the motion calls on the government to delay making a decision on the proposed Nexen takeover by Chinese state-owned firm CNOOC until such a time as full public consultations are conducted. It also calls on the government to initiate a broader consultation process on the issue of foreign ownership in the Canadian energy sector, with particular reference to the impact of state-owned enterprises. Finally, it calls on the government to respect its 2010 promise to clarify in legislation the concept of net benefit within the Investment Canada Act.

The clock is ticking, and the Conservative government stubbornly continues to study Nexen's takeover behind closed doors. Since July, New Democrats have repeatedly called for public hearings to study the ins and outs of this important transaction that would allow foreign interests to take over a portion of our oil sands, in a way that is transparent. But the Prime Minister and his inner circle have ignored our requests. We are now into the final stretch, and with this motion New Democrats will try once again to make the government listen to reason as well as the concerns of many citizens, experts and businesspeople.

We all know that Canada was built for trade and that foreign investment can play a positive role in building and strengthening our economy, if done right. Yet the Conservative track record on foreign investment demonstrates a lack of foresight, and the experience in my community of Sudbury is but one example of why the Investment Canada Act needs to be updated and, further, why full public consultations for major foreign takeovers are necessary to ensure Canada is taking the proper approach to foreign investment.

In the fall of 2010, this House unanimously backed an NDP motion calling for the modernization of the Investment Canada Act and specifically a clear definition of what constitutes a net benefit under the act. Further, the Minister of Industry at the time also made a commitment, both in the House and in various media outlets to bring “clarity” to the act in order to ensure that Canada's foreign investment procedures were clear for investors, for workers and for the Canadian public. Yet unsurprisingly, the Conservatives have reneged on this commitment to review and clarify the Investment Canada Act, leaving both investors and everyday Canadians in the dark.

It was my hope that this issue would have come before the industry committee, of which I am a member following the 31st general election. However, as yet, despite the government's commitment to re-examine the act, the committee has not had the opportunity to undertake a study into the deficiencies of the act. The public can take that as it may, as it has not been the New Democrats who have been stalling on this front.

One of the most troublesome aspects of the Investment Canada Act as it currently stands is the lack of a requirement for full public consultations for large foreign takeovers like the proposed Nexen deal. Put simply, without amendments to the Investment Canada Act, Canada's foreign investment regime will continue to lack transparency and accountability. That is why New Democrats are calling for transparent public hearings on the proposed takeover before any decision is taken on whether or not to approve this deal.

Like many Canadians, New Democrats have concerns about the risky hands-off approach of the government and its refusal to conduct an open and transparent review of this proposed takeover. The business sector, Canadian workers and communities need certainty when it comes to foreign takeovers, but the current review process lacks transparency and accountability. While the Conservatives have refused to hold public hearings on the CNOOC Nexen takeover, they have been busy meeting with well-connected lobbyists on the matter, including former advisers to the Prime Minister.

This speaks volumes about the approach taken by the government. Insiders continue to get intimate details of government plans while ordinary Canadians are left out in the cold. This is a story that has become all too common with the Conservative government. The fallout in Sudbury resulting from foreign takeovers of Inco by Vale and Falconbridge by Xstrata has made it clear to me that holding public consultations and ensuring the public disclosure of associated undertakings is necessary to ensure an open, transparent and accountable process for reviewing foreign takeover proposals, such as the one we have in front of us with Nexen.

Canadians deserve better. We need public hearings to provide clear answers to the serious questions raised by this deal and the various others coming down the pike.

A second major deficiency of this act as it stands and one that we had a firm commitment from the former Minister of Industry to correct is the highly subjective net benefit test. Specifically, the concept of net benefit is not clearly defined by the act, creating uncertainty for investors and for potentially affected communities. Therefore New Democrats are once again calling for long overdue changes to the act to clarify the criteria used to evaluate net benefit.

If it seems like New Democrats are yelling from the rooftops on this issue, it is because we have been the only party to consistently call for a cleanup of this act. Once again, the inherently problematic net benefit test is rearing its ugly head.

It is not just New Democrats clamouring for a cleanup of this section of the act, rather Canada's business leaders are also echoing this call. For instance, the president of Winnipeg-based steel fabricator Empire Industries Ltd. has described the current system as “highly subjective” and has stated that it is important to have clear ground rules.

However, because the PMO and the Minister of Industry have continued to hide behind a cloak of secrecy in relation to this proposed takeover and have been sitting on their hands for the best part of two years in terms of bringing forward a more objective test than the net benefit, neither industry nor investors nor the Canadian public have any idea of what criteria this proposal must meet in order to be approved.

Unfortunately, as the representative for Sudbury, it is déjà vu all over again for me. Canadians need answers on their key questions and concerns to verify that this deal would be a net benefit to Canada. Unfortunately, the Conservatives have thus far only spit out repetitive talking points in place of the substantive information that Canadians are seeking.

Another instructive statement comes from Scott Hand, the CEO of Inco until it was acquired in 2006 by Vale, who has argued that the net benefit clause and specifically Canada's unwillingness to shield strategic industries despite other countries judicious exercise of this right, makes Canada a boy scout playing among other countries who play hard ball.

This speaks to the specific issue of allowing foreign state-owned enterprises to buy up what could only be described as a strategic resource. In 2006, when CNOOC attempted to purchase American-owned Unocal, a fulsome debate on the issue of both strategic resources and national security was allowed to take place. Ultimately, this bid was rejected by the U.S. government as allowing a foreign state-owned enterprise to take over a strategic industrial entity like Unocal was deemed to be against the national interest.

The notion of selling a strategic resource like Nexen to a foreign state-owned entity has also been strongly refuted by one of the people responsible for crafting the Investment Canada Act. Mr. Sinclair Stevens, an industry minister under the Mulroney government, who brought in the Investment Canada Act to replace the more stringent Foreign Investment Review Act, has stated:

While we didn’t put it in the act, the departmental view was very firm: you can’t tolerate state-owned firms taking over anything in any substantial way in Canada....

I know my time is coming to an end, but it is time to open up this issue for broader discussion. I am hopeful that the industry committee will have the opportunity to study the deficiencies in full public view and ensure the fulsome debate that Canadians expect and deserve.