Debates of Dec. 10th, 2012

Opposition Motion--Investment Canada Act

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, the government heralded this new era of investment review on Friday. The member for Don Valley West gave us an overview of the FIRA regime back in the 1970s.

With each change to the investment review, such as what happened in 1973 and 1985, they were set on foundations. For instance, the FIRA was set on the Gordon commission, the Watkins report, the Wahn report and the Gray Report, which finally formed the FIRA. A similar process happened in 1985.

Exactly what studies, what reports and what foundations are there for the Prime Minister's Friday improvisations? Where is the backing for those changes in the new era of investment review for Canada?

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, it is interesting to note that the reference goes back to the 1970s and 1980s.

As I mentioned in my report and in my speech, we are now in the 21st century and the demographics of our country have changed. Industry and manufacturing have changed. Back in the 1970s and 1980s, we did not have many state-owned enterprises that were interested in buying into Canada.

Over the last number of years, especially through this downturn in the economy, Canada has, through its economic action plan, been able to shine, show its strength and show its ability to function as an economic powerhouse around the world. We have now become a bit of a lightning rod for investment, not only from foreign investors but also for state-owned companies that want to have control or take some control.

As the Prime Minister has said, we are not now starting a new trend, we are actually stopping a trend of having state-owned companies take over the investments in our country, particularly in terms of the oil sands. We will also be tightening security in terms of other state-owned investments within Canada.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, the member talked at length about some of the known guidelines in the Prime Minister's announcement that state-owned enterprises would now be at a $330 million level and that there are other thresholds at $1 billion.

The CNOOC investment in this particular case is an investment of $15 billion. CNOOC is owned 64% by the state. In 2012, there was a report by the U.S.-China economic and security review commission. It is very worried about Chinese involvement. I will read a quote from that and ask the member about reciprocity. It reads:

The Chinese government guides FDI into those sectors it wishes to see grow and develop with the help of foreign technology and capital. Foreign investors are frequently forced into joint ventures or other technology-sharing arrangements, such as setting up research and development facilities, in exchange for access to China’s market. Meanwhile, large swathes of the Chinese economy are closed to foreign investors. China’s investment policies are part of the government’s plan to promote the development of key industries in China through access to foreign technology and capital.

Did we, as a result of the deal on Friday, which the Prime Minister signed without a whole lot of public transparency, get reciprocity into that market to cover off some of these concerns?

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, I always welcome the comments from my friend from Malpeque.

I find his comments interesting because the only comments I heard this past weekend in my riding about this agreement were positive. People know Canada's position in moving forward. They actually know that in the trade agreements that we have done with many countries around the world, as well as the host of agreements we have coming forward, we are looking after the particular interests of Canadians.

I find his comments sort of interesting, quite honestly, because the Liberal Party, of which he is a member, never did much consultation when it was in government. When these agreements came in, the Liberals rubber-stamped them and they would go through. We have decided as a government that we cannot do that. The security and investment in Canada is much too important.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, I will be sharing my time with the intrepid member for Vaudreuil-Soulanges.

I am proud today to stand and second today's motion and speak in support of the member for Burnaby—New Westminster's motion. I also wholeheartedly agree with the amendment proposed by the member for LaSalle—Émard.

It is far past time that this Parliament clarifies the criteria for the net benefit test and improves the transparency of decisions taken with respect to foreign takeovers. In fact, the time to do this was in 2010 when the Conservative government unanimously supported an NDP motion for a clear net benefit test and a more transparent investment review process.

Contrary to its talking points, we know that the Conservative government is not one that supports transparency for itself. Since coming to power, the government has done everything it can to close doors and keep Canadians out of the discussion, whether by abusing committee in camera rules so no motion is dealt with publicly, on the F-35, or these kinds of backroom deals.

The manner in which last Friday's evening announcement was made shows exactly what is wrong with this process. The New Democrats believe that the government has badly mismanaged the takeover applications from CNOOC and Petronas by failing to clarify rules for governing foreign investment. The government has confused international markets. Trading on Friday afternoon was proof positive. Shares of CNOOC and Nexen were all across the board, even triggering a circuit breaker that stopped trading on these shares in the stock market because of the confusion sewn by the government.

If only the Conservative government were as good at handling the economy as it is with sticking with PMO talking points. During question period last Friday, I asked why there had been no consultation with Canadians over the Nexen takeover and whether we should expect a decision taken in the light of day or another decision taken in the dark. Of course, soon after the House adjourned and MPs went back to their ridings, the Prime Minister announced after the sun went down that his government would be approving the Nexen-CNOOC deal.

The Conservatives have shown time and time again that they do not respect investors by not clarifying the net benefit rules and they do not respect Parliament by not making the announcement here or by giving members of Parliament a vote. Polls show that nearly 70% of Canadians have serious concerns about the CNOOC takeover. Canadians have a right to be concerned as they have seen what this kind of deal that the Conservatives have approved brings.

The Conservatives approved the sale of Falconbridge mining that resulted in the elimination of 686 permanent jobs. The Conservatives took no action. Two U.S. Steel plants in 2009 were shut down resulting in the elimination of 1,500 jobs. The Conservatives again took no action.

We need to clarify the net benefit test to ensure future takeovers benefit Canadians and do not result in undue job losses.

Of course, the Conservatives are not the only ones with a terrible track record in handling foreign takeovers. I need to ask today why the Liberals are now siding with the Conservatives on selling out Canadians to foreign state-owned companies. History seems to be repeating itself with the Liberals. They reviewed thousands of takeovers during their time in government and turned down not one of them.

Canadians from coast to coast to coast are demanding that the Liberals and Conservatives stop selling us out and to clarify net benefit.

Under pressure over these takeover bids, the Conservatives promised to introduce new guidelines to clarify the investment review process, particularly for state-owned enterprises. The new guidelines announced on Friday are vague and inadequate and will not give certainty and protection for Canadians or for investors. The Conservatives have once again broken their promise to fix the Investment Canada Act. Instead, they merely tinkered with the process that everyone agrees is broken. Hence, this is why the Calgary Chamber of Commerce made its call and why we are here today supporting that call for clear rules on net benefit.

The Conservatives claim that under the new rules the takeovers by state-owned companies will only happen under exceptional circumstances. What are these exceptional circumstances? Without clarity, which is what we are calling for in this motion today, an exceptional circumstance could be what side of the bed the Prime Minister gets up on that morning. In other words, the Conservatives will never sign another deal like this ever again, until another deal like this lands on the table of the industry minister.

It is the Minister of Industry who has mishandled the sale of Nexen and continues to keep Canadians in the dark. The minister was so eager to please China that the Conservatives approved the acquisition of Nexen by CNOOC even though they had said the rules were not good enough and they are changing them just so this kind of deal could not happen again.

Just yesterday, the minister also indicated that it is now up to China to reveal the so-called benefits of this deal to Canadians. That is incredible. It is the responsibility of the Conservative government and the minister to explain themselves and their actions to Canadians, not for us to go running to China to find out what happened.

Both the business sector and Canadians need certainty when it comes to foreign takeovers, but the current review process lacks full transparency and accountability. We now have a chance once again to fix this. New Democrats are demanding a full and public review of the Investment Canada Act by Parliament to protect Canadians and investors. Canada needs foreign investment to grow our economy and develop our resources, but we should not be sacrificing control of our future by forfeiting our ability to ensure economically and environmentally sustainable resource development.

As good public administrators, New Democrats want to set specific criteria for state-owned companies to meet net benefit requirements, to protect the Canadian economy from potential foreign government interference. New Democrats want to improve the transparency of decisions and to clarify the net benefit test. Canadians deserve more than secret deals and economically ignorant Conservatives.

As this House did in 2010, will the government be supporting our motion to clarify the net benefit test, but this time actually do it?

On that note, it has come up multiple times in the industry committee, and the member for Burlington has spoken about it today, that a couple of years ago the minister sent a request to have the committee study the Investment Canada Act. The committee being master of its own domain, as we constantly hear from the other side, chose to study something else at that time. Now the New Democrats, since being elected as the official opposition last year, have been calling time and time again for the industry committee to study the Investment Canada Act. I would really like to ask if the member for Burlington is actually going to support the motion this time so we can have that study and actually clarify the rules for Canadians.

Recently, we have been doing a study on intellectual property in the industry committee, another very important and critical aspect of Canada's economy. One thing that has come up time and time again during the study is how important intellectual property is. What factors are taken into consideration with respect to the intellectual property that a company holds when a review is being undertaken? We have absolutely no answer from the Conservatives. As far as we know and can tell, they are not factoring intellectual property into whether there will be a net benefit to Canada when these foreign takeovers happen. This is a strategic and critical element that needs to be resolved in order to make sure future deals, as intellectual property gains importance, include it in the study of net benefit tests. We certainly have no answer from the government.

We have heard time and time again today about the government bringing more clarity to the process. In fact, the opposite is true. A couple of years ago with the potential sale of the Potash Corporation and MacDonald, Dettwiler and Associates, they were both turned down after much pleading and much effort from the New Democrats, as well as from the Saskatchewan government. We were pushing for those deals to be blocked. The government came up with a new term at that point: a “strategic asset”. That is why it did not sell Potash. The Conservatives still have not clarified that. They still have not clarified “net benefit”.

Now they have brought a new term into the debate, which is “exceptional circumstances”. Now instead of having a clearer process, we have “net benefit”, which is not defined; we have “strategic assets”, which is not defined; and we have “exceptional circumstances”, which is not defined. This makes the process absolutely as clear as mud.

[Mike Wallace, Conservative, Burlington, ON]

Mr. Speaker, I thank my colleague across the way. I want to clarify a couple of his statements to make sure the next time he comes to the House he does the homework. On the Stelco deal with U.S. Steel, it did not meet its obligations and the Government of Canada, this government, took it to court and sued it. We came to an out-of-court agreement to resolve those issues; so we do take action when they do not make it.

Members should do their homework first, before they say things that are not actually true.

Second, I was on the industry committee when the minister of industry at the time—a different minister from the one we have presently—sent us a letter asking us to please study this before there are any issues, saying we needed to not look at the law when there is a crisis or an issue but look at it in an intellectual, systematic approach to see what we can do better. However, the NDP, the Liberals and the Bloc got together and said we could not do that.

The last piece, which I need to explain to my colleague, was on the P3 issue we are dealing with around intellectual property. Under section 3 of the criteria, it says that the effect of investment on productivity, industrial efficacy and technological development and product innovation, which is what we are talking about, is covered under these—

[The Acting Speaker, Conservative, Barry Devolin]

Order, please.

The hon. member for Scarborough Southwest.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, I notice there were lots of words in that sentence but it does not say “the protection of intellectual property”. It says “product innovation”.

With respect to U. S. Steel and Stelco, it was only after this side of the House was attacking the government time and time again that it actually took U.S. Steel to court. Guess what. They settled out of court and we still do not know the details.

The smelter in Hamilton has been closed down again, so where is it that the government defending Canadian jobs?

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, compatibility with federal and provincial economic policies is one of the criteria to approve a foreign investment.

Does my colleague see any evidence that the government consulted with the provinces before authorizing the sale?

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, as we heard from Premier Redford in Alberta, they are going to be evaluating the deal that was made, because the consultations did not happen beforehand.

That actually brings up another important point that has been raised a few times by the Parliamentary Secretary to the Minister of National Defence when he talks about the strategic importance of the Alberta oil sands. My question there would be: Why is it fair to draw a line, or perhaps a firewall, around there when we have other strategic assets and investments that are going to be happening in the Ring of Fire? Why is it more important than the Ring of Fire? Why is it more important than oil and gas in Newfoundland and Labrador? Why is it more important than development happening in Canada's territories?

Furthermore, where does it take into consideration that all of this development is happening on first nations land? Why are they not at the table? Why are they not being consulted about what is going to be happening to their land and their future?

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

Mr. Speaker, it is always a pleasure to engage colleagues opposite in questions. The difference between the Calgary Chamber of Commerce and them over the contents of the motion is that the Calgary Chamber of Commerce actually wants investment, which the NDP is not really succeeding in disguising as its real agenda.

The member represents Toronto, a global financial hub. He represents constituents whose jobs depend on foreign investment and exports. Could the member give us one example of foreign investment in Canada, of net benefit to Canada, that he is on record as supporting?

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, I take issue with the member's statement about not supporting foreign investment and development. The member clearly was not listening when I spoke. I will quote from my own speech again.

Canada needs foreign investment to grow our economy and develop our resources, but we should not be sacrificing control of our future by forfeiting our ability to ensure economically and environmentally sustainable resource development.

Therefore, why did the member just lie there?

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, I would like to congratulate my colleague on his excellent speech. I would also like to congratulate the member for Burnaby—New Westminster for moving this motion in the House.

Today we are talking about the importance of defining the concept of “net benefit”. Why is this notion of net benefit so important? Why should we bring up the issue? When Canadians are asked their opinion, most of them believe that the government must exercise our independence, our economic sovereignty and our energy sovereignty. This is what my constituents often tell me. They ask me what I am going to do to protect them from the foreign forces that may harm our industries from the point of view of their economic and energy security.

When Canadians see the sale of a significant proportion of their energy industry, they wonder how this can be to their net benefit. Last Friday, the prime minister clearly mentioned that there was no net benefit for Canadians in the sale of Nexen and Petronas to state-owned companies—in the case of Nexen, to a state-owned company controlled by the communist and totalitarian Chinese government.

The problem is not the fact that the company is Chinese—people of Chinese origin have contributed significantly to building our nation, and their contribution, especially in terms of the railway, was central to the birth of modern-day Canada. The problem is not the fact that the company is Chinese, but rather that CNOOC, a state-owned corporation, is a branch of the communist government in China. Canadians are extremely concerned, because they fear such a corporation controlling a proportion of our natural resources.

However, New Democrats are not the only ones who are concerned about these actions. Earlier this year, Peter Lougheed, the former premier of Alberta, passed away. This is what he said about this issue:

I know people will fall from their chairs to hear me say this, but maybe right now we need to return to the Foreign Investment Review Agency. We need to be more interventionist. The passive approach isn't working. If the (present trend) continues, we are going to look at our country in about three years and say: What have we got left?

Those are not the words of a New Democrat or a Liberal; they are the words of a Conservative who served the province of Alberta for many years. He was a well respected man. When a person like Peter Lougheed is worried and suggests that we return to the Foreign Investment Review Agency, there is cause for concern. That is why Canadians are expressing their misgivings about this so forcefully.

Statistics show that there has been tremendous growth in foreign takeovers. This year, foreign acquisitions were worth $9.5 billion in the first quarter, $12.4 billion in the second quarter, $5.9 billion in the third quarter, and now in the fourth quarter, the Nexen deal is worth $15.1 billion and the Petronas deal $5.3 billion. The grand total is $48.8 billion, with no real oversight on these investments.

That is the problem: there is no clear oversight and there are no guarantees. When CNOOC came in to buy Nexen, we got no long-term guarantee that there would be jobs in the Calgary office or any enhanced innovation in Canada.

Perhaps they will take Nexen's technology and use it around the world. Canada will not benefit from that. Here is what Jack Layton said about this: Canadians have the right to know whether or not an investment is in the country's best interest. We must have the power to retaliate when a company's actions threaten the country's interests, even if the company is foreign-controlled.

We have been talking about net benefit today. Let us talk about what would have been of net benefit to Canada had this deal been negotiated properly. Let us talk about reciprocity. A crucial piece of this deal could have been using it as leverage for reciprocity. The Chinese state-owned enterprise was allowed to buy a part of our strategic assets in energy, Canadians ask if we can we buy strategic assets in China. The answer from the government benches would be no. Could we have tried to leverage this deal to get reciprocity? The answer would be yes. Did the government do so? The answer would be no.

The government and, in particular, the Minister of Industry cowed on this deal. He contented himself with CNOOC's answer, which was that to get increased reciprocity in China, the Canadian government would have to have separate negotiations with the Chinese government. Never mind that CNOOC is an arm of the Chinese government. I can see clearly now the face of the industry minister turning red and him cowing to representatives of CNOOC when they told him he would have to negotiate with the Chinese government. It goes to show that when it comes to negotiating our shared future, the Conservatives get a failing grade.

That makes me wonder why the government has ministers at all when it is clear that the PMO calls the shots and drafts their talking points for them. We will note that it was the Prime Minister who made the announcement on Friday, not the industry minister. As far as I could see from that press conference, the industry minister was not present at all. The micromanager in chief, the Prime Minister, has had to step in once again to do damage control for a minister who did not do his job properly.

Time after time the minister stood in this place and told Canadians that with the approval of these sales, the reformulation of the rules around the Investment Canada Act and the new guidelines would be clear. He said that the government would put forward a new era with clear guidelines about foreign investment in Canada. All we can see today, Monday, a few days later, is people scratching their heads. This is not a clear way forward. It is basically improvisation. The Conservatives are making it up as they go along. After months of the micromanager in chief asking his charge if he has completed his assignment, the red-faced minister kept saying no. Finally the Prime Minister had to step in and say enough is enough, let us get on with this and swallow the bitter pill.

That is not the way to manage an economy. It is not a responsible way for a government to proceed. Frankly, I have to say the government has made a real mess of this deal. It really was not careful in negotiating it. What does exceptional circumstances mean? No one knows. I could ask every member what it means and they would probably all give me a different answer, but I am going to hazard a guess.

Exceptional circumstances means that the Prime Minister engages with a foreign power as damage control for a previously failed foreign policy with that country. It means that, being strong-armed, the Prime Minister is put into a corner when that foreign power wants part of our resources, and the industry minister is incapable of developing the spin because Canadians do not support the sale in large numbers. Exceptional circumstances, indeed; every Canadian knows that is what happened.

I really hope that the government goes back to the drafting table. If it truly wants to start a new era of investment review, it should do so on the foundation of reports, expert advice and Canadians' input.

[Dan Albas, Conservative, Okanagan—Coquihalla, BC]

Mr. Speaker, it is important for us to hear all the different sides, but we are hearing so many errors on the subject of foreign investment, I do not know where to start.

First, it is the provincial crown that owns the assets of mineral rights. Therefore, any development that is done is done in tandem.

I should also remind members that, with Canada having a small population, we cannot afford to finance as many of these natural resource development projects as we would like simply because we do not have the capital. We should be welcoming foreign investment and putting out clear rules, which is what the Prime Minister and the Minister of Industry have done.

If the New Democratic Party is against foreign investment and trade, why not come out and be honest and say that is its position rather than throwing out errors, omissions and misrepresenting the facts? I would ask the member to be honest with the NDP's position on investment and on trade.

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, it is pretty clear which side is making the mess and the errors. It is the government side doing that. It has made errors and a mess of this deal. I outlined the fact that we did not get reciprocity. In Alberta, it could not get a guarantee from CNOOC that Nexen is going to invest in upgrading here in Canada.

Frankly, I find the Conservatives' attitude fairly defeatist. They always get up and say, “Canadians can't do it. We have to bring foreigners in to do it because Canadians aren't capable. We don't have enough money. We're not good enough or smart enough. Gee, gosh, shucks, we need that money to help us out”.

I do not believe it. I think that is defeatist and we can do better.

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

Mr. Speaker, I wish to acknowledge the work of the hon. member for Vaudreuil-Soulanges. He is a real leader in the House. He has the professional attitude necessary when examining investments under the Investment Canada Act and its related procedures. I want to highlight the leadership shown by the hon. member for Vaudreuil-Soulanges in recent months.

The government has said everything is proper and that it will hand Nexen over to CNOOC. At the same time, CNOOC has acquired special powers and rights because of this government and the Canada-China investment treaty.

Is the hon. member worried about the fact that CNOOC will now have the same rights as Canadian companies and will be able to expand its scope of activities in Canada as much as it wants, because of the approval it was given last Friday?

[Jamie Nicholls, NDP, Vaudreuil—Soulanges, QC]

Mr. Speaker, I would like to thank my colleague for his comments.

I am not the only one who is concerned. Canadians are also concerned.

CNOOC is protected by Canadian investment laws. As a result, this company can increase its oil sands lease holdings.

And, it is not just a matter of oil sands. The people of Prince George—Peace River must also be concerned because we know that Nexen has shale gas lease holdings in northeastern British Columbia. So it is not just oil sands.

The Americans also have concerns about this with regard to the Gulf of Mexico. This could be complicated. The government has not been vigilant in the way it is dealing with this issue. Many things could come of this. Many bad things could come of this. Canadians are mainly concerned that their energy sovereignty and economic sovereignty will be threatened.

[The Acting Speaker, Conservative, Barry Devolin]

It is my duty, pursuant to Standing Order 38, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Guelph, Food Safety.

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

Mr. Speaker, I will note at the outset that I will be sharing my time with the member for Brant.

Trade and investment both into and out of Canada are critical components of a prosperous Canadian economy. Thanks to our government, Canada has one of the most inviting investment climates in the world. We are committed to encouraging market-based foreign investment that benefits Canadians by attracting the capital, technology and access to global opportunities that will help our businesses grow and remain competitive.

As of 2011, investments by Canadian firms outside of Canada reached $685 billion, while foreign investment into the country reached $608 billion. Foreign investors are clearly interested in the strong and stable Canadian economy that our government is committed to sustaining.

Last Friday the Prime Minister made an important statement clarifying how the government will approach foreign investment decisions under the Investment Canada Act, or ICA, in the future. The Prime Minister indicated that it is important for Canadians and foreign investors to understand that the recent investment decisions are not the beginning of a trend but rather the end of a trend.

The dynamics of the global economy have shifted significantly over the last several years and the government has responded by clarifying the investment review regime. Foreign investment to and from emerging markets, particularly in Asia, is rapidly increasing across the world. For example, over the last decade foreign investment from Asia to Canada more than doubled. To maximize the benefits of changing global trade and investment flows, the government is clarifying how it plans to leverage Canada's existing foreign investment review framework to address such emerging economic realities.

The changing global investment landscape has seen a surge of economic activity from state-owned enterprises, or SOEs, across international borders. SOEs are entities that are owned, controlled or influenced, both directly and indirectly, by a foreign government. They therefore do not respond only to market signals the way private enterprises do.

In Canada, inward foreign SOE investment has grown from a nominal amount to over 20% of transactions subject to Investment Canada Act review. The nature of foreign SOE investment in Canada has also begun to change to one that aims to acquire majority control over Canadian businesses, particularly in the oil sands. The Canadian oil sands represent fully 60% of the global reserves of crude oil not already directly controlled by governments and their SOEs. With that comes a responsibility to sustain balanced ownership of this critical resource.

As Canada's oil sands are controlled by a comparatively small number of private sector businesses, the question of ownership and control becomes more critical, and the potential for foreign states to gain control of an entire industrial sector is significant. As a result, going forward, investments by foreign SOEs to acquire control of a Canadian oil sands business would only be found to be likely to be of net benefit to Canada on an exceptional basis.

Canadians are rightly concerned by efforts of foreign governments to control increasing portions of our economy. That is why the Minister of Industry will closely monitor and scrutinize all proposals by foreign state-owned enterprises to acquire Canadian businesses across the rest of the economy. That is why our government is addressing the issue of proposed acquisitions of control of Canadian businesses by foreign SOEs. The issue really is acquisitions of control, rather than minority investments or joint ventures. This is true of the oil sands, of the natural resources sector and of the entire Canadian economy.

Our government has not only clarified the ICA net benefit review process, but also issued revised guidelines for foreign SOE investors. The state-owned enterprise guidelines have been revised to clarify how the Investment Canada Act applies when an investment under net benefit review is being proposed by an investor that is owned, controlled or influenced by a foreign state.

The guidelines outline the government's commitment to ensure that the governance and commercial orientation of foreign state-owned enterprises are considered in determining whether acquisitions of control in Canada by the SOE are of net benefit to Canada. The guidelines also emphasize the importance of free market principles and the impact of the investment on employment, production and capital levels in Canada.

Finally, the guidelines stress that foreign state-owned enterprises must demonstrate that an investment will make a positive contribution to the productivity and industrial efficiency of a Canadian business. In addition to these clarifications to the SOE guidelines, our government will also be amending the Investment Canada Act to allow for the extension of the timelines related to the national security review process, which our government introduced in 2009.

National security is of fundamental importance and these amendments will give the government the time it needs to conduct careful and thorough reviews of complex proposed investments that could be injurious to national security.

The final clarification that the Prime Minister outlined in his statement on Canada's foreign investment framework is that the government will be proceeding with the progressive liberalization of the ICA net benefit review threshold to $1 billion in enterprise value over the next four years for private sector investors. However, the Prime Minister also stressed that the existing threshold level of $330 million in asset value would remain in place for foreign SOE investments.

These positions align with the government's openness to market-based foreign investment while at the same time closely scrutinizing foreign SOE investment across the Canadian economy.

By clarifying how the government will be using Canada's foreign investment review framework to advance the long-term prosperity of Canadians, we have stressed that we will maintain an open market-based approach to foreign investment in Canada, and that we will exercise a level of scrutiny of proposed transactions that is appropriate to the evolving economic and security context.

[Dan Harris, NDP, Scarborough Southwest, ON]

Mr. Speaker, I will be brief and ask a fairly clear and simple question. The member for Burlington has raised it.

We have been trying to get the Investment Canada Act studied at the industry committee so we can thoroughly look through everything that has been proposed, all the changes that are happening and to actually have industry and Canadian stakeholders come to committee to report on what they like, what they do not like and what they would like to see in the Investment Canada Act that would make it better for Canadians.

We do have a motion to that effect coming back to committee in January. Will the parliamentary secretary be supporting the opposition motion to study the Investment Canada Act?

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

Mr. Speaker, I will give the hon. member a little bit of a history lesson because he was not here in the previous Parliament.

Prior to the May 2011 election, the industry committee had a motion before it to study the Investment Canada Act. At that time, members of the Conservative Party were in the minority compared to the opposition coalition. The NDP, the Bloc and the Liberals had one more member than we had. We wanted to study the Investment Canada Act. In fact, on a few occasions we actually had a few witnesses come before the committee. We vehemently put forward the idea that this should be the priority for the committee at the time because it seemed as though the NDP was going to force an election.

It was the NDP that held the deciding vote. The NDP member on that committee, the member from Windsor, and the hon. member might want to talk to him, held the deciding vote on that committee and decided to align himself with the Bloc Québécois and the Liberals to determine that we would instead study the census, which had been studied for hours and hours at committee. They deemed there was some political advantage to doing that.

Obviously, in the end, maybe it was not the case when the election actually came about, but that might be a subject that he would want to take up with the NDP member from Windsor who held the deciding vote on that issue.

[Geoff Regan, Liberal, Halifax West, NS]

Mr. Speaker, in view of the fact that the Minister of Natural Resources has said that the Nexen deal, which was approved last Friday night, would not have been approved under the new guidelines, how can my colleague say that it is a net benefit?

I also want to ask him why, in the year and a half or more since his own party was so keen to study the Investment Canada Act, it has shown so little interest in doing so?

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

Mr. Speaker, in terms of the question in relation to the specific transaction the member is referring to, it is very clear that the transaction was approved under the law and the guidelines that were in place at the time.

As it relates to decisions that this government will take on behalf of Canadians, Canadians can look at different extremes when they are looking at the opposition parties. They can look at a Liberal Party, in which I believe that member was in cabinet in the former Liberal government, which just rubber-stamped every transaction that came before it.

We then have the New Democratic Party which has opposed every single transaction. I note that the NDP member, who just asked me a question, when asked, after giving his speech, to name one transaction that his party actually supported, he could not name one transaction. The NDP does not actually support any transactions.

What this government will do is take a balanced approach. We will assess proposed transactions under the Investment Canada Act and determine whether they are of net benefit to Canada. We will only approve transactions that are of net benefit to Canadians.

[Phil McColeman, Conservative, Brant, ON]

Mr. Speaker, I am pleased to address this motion given how much our government has been doing to stand up for Canadian interests in the global economic context.

I cannot stress enough how important trade and investment are to Canada's continued prosperity. Canada is a market economy that supports the global exchange of goods and services. Our market-based system has promoted the well-being and prosperity of our citizens and our international partners.

The integration of our domestic economy into the global marketplace has resulted in a dynamic economy, with growth and employment rates that are the envy of the world. Our integrated economy reflects shifts in global demand and supply, particularly in our world-leading natural resource sector. In fact, foreign investment in Canada's natural resource sector has nearly doubled in the past decade.

In response to this change in the investment landscape, the government has clarified the administration of the Investment Canada Act, the ICA, to better reflect the current economic context. This is essential for creating a transparent, stable and predictable investment environment for foreign investors and Canadian businesses.

An increasing amount of foreign investment in Canada's natural resource sector has come from foreign SOE's. These state-controlled entities account for a rapidly increasing amount of foreign investment flows, capital flows, around the world. For example, sovereign wealth funds, a type of SOE, reportedly holds over $5 trillion in global assets and made over $100 billion in global investments in 2000 alone.

To address inherent concerns regarding the influence of foreign states in Canada's market-based economy, the government has stressed that the following three areas will be closely examined with regard to SOE investments: first, the degree of control or influence an SOE would likely exert on the Canadian business that is being acquired; second, the degree of control or influence an SOE would likely exert on the industry in which the Canadian business operates and; third, the extent to which a foreign state is likely to exercise control or influence over the SOE acquiring the Canadian business.

The government has also highlighted that the burden of proof is on foreign SOE investors to demonstrate that their investment is commercially oriented, free from political influence and adheres to Canadian laws.

The government has also emphasized the need for foreign SOE investors to promote sound corporate governance and transparency, and demonstrate that they will make positive contributions to the productivity and industrial efficiency of a Canadian business. These principles have all been reinforced through revisions to the SOE guidelines and the related undertakings offered by foreign investors.

The government will also be promoting Canadian interests by improving the ICA national security review process. Specifically, we will be introducing legislative amendments to allow for the extension of national security reviews where required. As indicated by the Prime Minister last Friday, this allows the government to take the time required to ensure foreign investments are not injurious to the national security of Canadians.

Finally, in line with the government's belief that market-based foreign investment benefits Canadians, we will implement our commitment to increase the ICA net benefit review threshold to $1 billion in enterprise value for privately owned investors. This change, which was passed by Parliament in 2009, will focus net benefit reviews on only the most significant private sector transactions.

The government has also been working with stakeholders to carefully define the concept of enterprise value in the related regulations to bring these changes into force. Enterprise value better reflects the market value of a business, and so better captures the increasing importance of the service and knowledge-based industries in our economy.

However, in line with the government's concerns regarding increased levels of foreign SOE investments, we will be introducing the necessary legislative and regulatory amendments to maintain the current $330 million asset value threshold for foreign SOE investments.

These changes will maintain the government's ability to protect Canada's economic interests and our national security. The ICA national security provisions apply to a broader set of foreign investments, including those below all of the relevant net benefit review thresholds. In short, the government has clarified Canada's foreign investment review framework with particular focus on foreign SOE investment.

As emphasized by the Prime Minister, Canadians did not spend years reducing the ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments. The government encourages foreign investment in Canada but it must be investment that promotes and sustains our free enterprise-based economy.

Canada's clear and rigorous foreign investment framework, coupled with the most ambitious trade expansion plan in our country's history, ensures that our economy will continue to grow, diversify and prosper.

[Pierre Jacob, NDP, Brome—Missisquoi, QC]

Mr. Speaker, I would like to thank the hon. member for his speech.

In his previous speech, the hon. member for Vaudreuil-Soulanges said that Canadians were very concerned because the CNOOC takeover did not provide them with any energy security, economic security, monitoring or guarantee of economic spinoffs.

My question is for my hon. colleague opposite. Why did the Conservative government approve the CNOOC takeover without imposing new conditions when Canadians asked for conditions to be imposed and CNOOC even seemed prepared to give more?