House of Commons Hansard #195 of the 41st Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was industry.

Topics

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:25 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, I would have liked to make a speech, but the answer is yes, of course.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:25 p.m.

Conservative

The Acting Speaker Conservative Barry Devolin

The amendment is in order.

Questions and comments, the hon. member for Burlington.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:30 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I want to thank my hon. colleague for her speech and the work that she does on the industry committee. Nonetheless, I think the NDP members should be careful about using the Hamilton example, where U.S. Steel purchased Stelco, which was bankrupt and would not likely be in existence today if it were not for U.S. Steel. Right next door another purchase was made, this time of Dofasco by ArcelorMittal, which is doing very well in that same business of steel in that same city. The foreign investment in Dofasco has made a significant difference to that community. Therefore, I would be very careful if I were the New Democrats in using that example.

I was on the industry committee a couple of years ago and the Conservatives put forward a plan to study the Investment Canada Act, which was turned down by the Liberals, the Bloc Québécois and the NDP on that committee. I can clearly recall the NDP talking about there being no need to discuss that act then.

Does the critic think it was a mistake for the NDP to stop us reviewing the Investment Canada Act a couple of years ago?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:30 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, my colleague is a member of the Standing Committee on Industry, Science and Technology, and his comments would suggest that he is interested in studying the Investment Canada Act. I am more than ready to do so. His question suggests that he is interested in studying it. As some have already said and as some Conservative ministers have said, it is important to do so.

I think it is now or never when it comes to reviewing the Investment Canada Act at the Standing Committee on Industry, Science and Technology, and to hearing from experts in order to do a thorough review.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:30 p.m.

NDP

Marc-André Morin NDP Laurentides—Labelle, QC

Mr. Speaker, I would like to know what my colleague thinks about the circumstances surrounding the sale of Nexen, at a time when there is an extreme labour shortage in Alberta. In Newfoundland, the shortage of tradespeople is forcing employers to recruit workers from Ireland, Norway and all over the place.

Who is going to work on this site? Temporary Chinese workers?

In China, a well-paid tradesman earns $65 a month. In Alberta, young people who work in the oil industry earn $65 an hour. I wonder how much the Chinese workers will be paid and whether China will allow them to go back home with salaries that are equivalent to what a minister earns in their country. I wonder how this is all going to work.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:30 p.m.

NDP

Hélène LeBlanc NDP LaSalle—Émard, QC

Mr. Speaker, I want to thank my colleague for the question.

In talking to various players in the natural resources and mining sectors, we learned that the shortage of skilled labour is a growing concern. That is why I mentioned in my speech that we need responsible development, which would take into account human resources, but also territorial resources and communities. It will be a tremendous challenge.

As I already mentioned, we see that CNOOC's offer to purchase Nexen was quite considerable. No other private company could compete. This will also have consequences for the market.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:30 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, it is my pleasure to speak to the opposition day motion. I am honoured to share my time with the terrific member for Ajax—Pickering.

Foreign investment plays an important role in the Canadian economy. Foreign investors bring with them knowledge, capabilities and technology, which can increase the productivity, efficiency and competitiveness of Canadian firms. These investments frequently help Canadian-based companies to expand and create jobs for Canadians. Recognizing the importance of investment flows into the country, Canada has a broad framework in place to promote trade and investment, while at the same time protecting Canadian interests.

It is important to note that investment flows both into and out of Canada. In fact, 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 reached $607.5 billion in 2011, while Canadian investments abroad reached $684.5 billion. The Investment Canada Act provides a mechanism to 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 mechanism to review investments that could be injurious to our national security.

I will take this opportunity to describe for members how the Investment Canada Act works and how decisions are taken by the Minister of Industry.

The administration of the act is shared between two ministers and their respective departments. The Minister of Canadian Heritage and Official Languages is responsible for the review of investments involving cultural businesses and the Minister of Industry is responsible for the review of all other investments. The Minister of Industry is also responsible for all other aspects of the administration of the act, including initiating enforcement measures. My comments today will focus only on those investments that are the responsibility of the Minister of Industry.

When a foreign investor proposes to acquire a Canadian business, the investor has certain responsibilities under the act. Foreign investors must either file a notification or an application for a review.

An investor must file a notification where there is an establishment of a new Canadian business or where there is a direct acquisition of control of a Canadian business with assets below the established threshold. Indirect acquisitions of control by investors from WTO countries are also subject to notification. This is triggered when a foreign investor requires control of a Canadian business indirectly by acquiring a company incorporated outside of Canada, which has a Canadian subsidiary.

For an investment which is not subject to a net benefit review under the act, where an investor has provided the information required by the regulations respecting the Investment Canada Act, the investor has met its obligations under the act. Information required under the regulations includes the names of the investors and the Canadian business, their respective addresses, a description of the business of the latter and the level of its assets.

Where a proposed investment is subject to a net benefit review under the act, the investor cannot implement the transaction without the approval of the minister responsible for the act. The investor must provide certain information as part of the filing of an application, including his or her plan for the Canadian business. Acquisitions are subject to review when the assets of the Canadian business to be acquired are equal to or above thresholds established under the act.

The threshold which applies to WTO members is adjusted each year by an amount equal to the change in the nominal gross domestic product. For 2012, the threshold for WTO members is $330 million. The threshold for cultural businesses and non-WTO members remains at a level established in 1985. It is $5 million for direct acquisitions or $50 million for indirect acquisitions, a much lower threshold for those industries.

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

The Minister of Industry approves an application for review only where he or she is satisfied, based on the plans, undertakings and other representations of the investor, that the investment is likely to be of net benefit to Canada. In making this determination of net benefit, the Minister of Industry must consider the factors listed in section 20 of the act.

For those in the House who do not know this, these six criteria are clearly indicated on the website and are easily found. They state:

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 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.

Also, for investors of state-owned enterprises, which has been an issue of late, the guidelines for the net benefit assessment investments by state-owned enterprises published under the Investment Canada Act applies to these proposed investments. The guidelines clarify that in the review under the ICA, as part of the assessment of the factors listed in section 20 of the act, the minister will examine: one, the corporate governance and reporting structure of the non-Canadian, including adherence to free market principles and Canadian laws and practices; two, how and the extent to which the non-Canadian is owned or controlled by a state; and three, whether the Canadian business can be acquired while continuing to have the ability to operate on a commercial basis.

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

The Investment Canada Act has a very clear net benefit test listed for all to see in writing on Industry Canada's website, including specific criteria on state-owned enterprises. Our government has acted to ensure that these criteria are up-to-date and reflect the evolution of foreign investment proposals to ensure that while Canada remains open for business, it is not for sale to foreign governments.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:40 p.m.

NDP

Peter Julian NDP Burnaby—New Westminster, BC

Mr. Speaker, like three-quarters of Canadians who said in recent weeks that they were opposed to the CNOOC takeover, I was stunned on Friday night that the Prime Minister would rubber-stamp something that would have such an egregious impact right across the country due to CNOOC's poor environmental human rights record, the threat of job losses in Calgary and for a wide variety of reasons. That is why three-quarters of Canadians said no to the CNOOC deal, yet the Conservatives rubber-stamped it.

Would the member explain why the Conservatives have systematically opposed public consultations and refused to consult with Canadians who actually pay their salaries and who are their bosses in their ridings. Why have the Conservatives not stood and said that this is a wrong decision that should not have taken place and that they should have listened to Canadians?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:45 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, the people of Canada elected a majority Conservative government because they knew we would deal with issues and policies in a responsible and effective manner, which would not happen under an NDP government.

The fact is that the criteria is laid out clearly in writing and in the act for net benefit, including the criteria for net benefit for foreign-owned enterprises. The Prime Minister and the Minister of Industry reviewed those issues as the law stands today and they came to the conclusion that there was a net benefit to Canada based on the criteria outlined and on the submission by that organization.

The Prime Minister, in a very responsible way, clearly indicated that there were only 15 companies in total operating the oil sands resource. Also, as a government, we needed to take a strong position that in future no foreign-owned companies would be able to take a stronger position in the oil sands.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:45 p.m.

Liberal

Kevin Lamoureux Liberal Winnipeg North, MB

Mr. Speaker, a couple of years ago, the Prime Minister called for a greater sense of transparency and more accountability on this issue.

In listening to the Prime Minister's comments, he made reference to “exceptional circumstances”. I think there are millions of Canadians coast to coast who would be interested in knowing what “exceptional circumstances” are.

Why is there a separate set of rules specifically for the oil sands? Does this mean that the government does not believe that other sectors are as important? What would the criteria be if there were an offer for a potash corporation today? Would it be of net benefit?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:45 p.m.

Conservative

Mike Wallace Conservative Burlington, ON

Mr. Speaker, I encourage the member opposite to read the statement by the Prime Minister on why the oil sands was chosen in this case.

As I just stated, there are very few players in the development of the oil sands. The issue today is that we need to look at where we are going as a country in the development of that Canadian resource. Because there are so few players, 15 at present, the decision was made that we needed to ensure that this Canadian resource, in future, would not progress further to foreign-owned entities and that there should be some guidelines, some criteria, placed in that area. That is why it was chosen. It is very simple. The Prime Minister stated it clearly at the press conference.

I do not understand why, if this is such an issue to the Liberal Party, it did not want to study the criteria in the Investment Canada Act two years ago when I was on the industry committee in a minority government? We said that we should be studying the criteria in the Investment Canada Act but the Liberal Party was opposed to studying that. The Liberal members wanted to deal with other items that they considered to have more political importance at the time. I think that was a mistake. I am glad to hear that those members are at least interested in the topic now.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:45 p.m.

Ajax—Pickering Ontario

Conservative

Chris Alexander ConservativeParliamentary Secretary to the Minister of National Defence

Mr. Speaker, I congratulate my colleague, the member for Burlington, for doing an excellent job of laying out the criteria under which net benefit is assessed, the specific guidelines that govern evaluations of proposed investments by state-owned enterprises, and the way in which that net benefit test has evolved under the government and been improved under the government. It is important for Canadians to understand that, especially after the very important historic announcement by the Prime Minister on Friday.

I will now take a few minutes to explain the review process under the Investment Canada Act. As part of the review process, the investment review division of Industry Canada consults with various federal government departments that have policy responsibility for the industrial sector involved in a proposed acquisition. It also consults with the Competition Bureau and with all the provinces and territories in which the Canadian business has substantial activities or assets.

We should not underestimate the importance of these consultations. The member for Burnaby—New Westminster keeps challenging us publicly to consult with Canadians. He clearly has no familiarity with the existing mechanism for consultation that the Investment Canada Act provides for. Any person or group who has a view on a specific investment proposal may provide that view in writing to the minister, as provided for in the Guidelines — Administrative Procedures that we have today.

These guidelines state that where unsolicited representations are received that could have an adverse bearing on the determination of net benefit, investors will be advised of the substance of those representations and given ample opportunity to respond to them.

This is very important because we value the principle of fairness. We value the integrity of our consultation process. We want it to deliver a good result for Canadians, a result whereby investments do generate benefit for this country, and that means we need to sequence both the receipt of representations and, where warranted, their publication in a very careful and deliberate way.

Once the consulted parties have provided their input, discussions take place with the investor and legally enforceable undertakings are discussed with the investor.

The investment review division staff also perform an independent analysis of the acquisition in light of the six net benefit factors that are in section 20 of the act, very ably described by my colleague. In performing the review, the minister establishes a baseline against which to review a proposed transaction.

The minister looks at the Canadian business that the investor proposes to acquire and takes into account the business' likely prospects on a stand-alone basis if the investment did not take place. The minister assesses whether the business is a healthy company with good prospects or whether it is in financial distress. Different sectors are moving in different directions in today's economy and this is an important context for any decision.

The minister also takes into account the Canadian business' key strengths, areas requiring improvement and the key business challenges it is facing. The minister also takes into account what the foreign investor brings to the investment, for instance, whether the investor is bringing capital or expertise that is not accessible to the Canadian business.

We need to be clear, as the member for Burnaby—New Westminster was, about the different contexts in which acquisitions takes place: Stelco or Dofasco; the oil sands or some branches of manufacturing; advanced manufacturing or the manufacturing that has not changed since the middle of the last century. These contexts help to determine the calculation that the minister has to make on the basis of consultation and on the basis of the review process that I am describing.

The bottom line is that this review process is rigorous. Where an investment is subject to review, the minister must approve an investor's application for review even before the investor can implement the acquisition. The minister only approves applications where he or she is satisfied, based on the plans, undertakings and other representations, that the investment is likely to be of net benefit.

The investors generally need to provide plans and undertakings to support their view that their investments are likely to be of benefit. In 2011, the investment review division received and processed 634 notifications. As well, the Minister of Industry approved 15 applications for review. All approved investments are subject to monitoring and an evaluation of the implementation of the plans and undertakings of the investors, ordinarily performed a year and a half after the acquisition. The act provides for remedies where the minister is not satisfied that an investor is meeting its obligations.

The decision to take enforcement measures under the act is based on the overall performance of the investor in implementing plans and undertakings, but, obviously, these decisions are made on a case-by-case basis. Decisions can, however, include the dramatic step in which the government seeks an order from a Superior Court for the imposition of fines of up to $10,000 per day or the full or partial dissolution of an investment.

With reference to the transactions the minister approved on Friday, the minister stated that the investors satisfied him under the Investment Canada Act and that, under state-owned enterprise guidelines which existed at the time of the review, their proposed transactions are likely to be of net benefit to Canada. In making this determination, the minister carefully considered plans, undertakings and other information submitted by the investors.

The minister also stated that to demonstrate that the transaction is likely to be of net benefit, the investors have made significant commitments to Canada. For instance, with regard to the recent proposed transactions, the investors have provided undertakings on matters such as: governance, including commitments to transparency and disclosure; commercial orientation, including an adherence to Canadian laws and practices, as well as free-market principles; and employment in capital investments, which demonstrate a long-term commitment to the development of the Canadian economy.

Our government has applied the rules responsibly. We have revised the guidelines to ensure a clear and rigorous approach to the new context of state-owned enterprises.

I will note a certain irony in today's debate. The opposition motion before us relates to a resolution of the Calgary Chamber of Commerce. We, like the Calgary Chamber of Commerce, are in favour of investment in this country, investment that is of net benefit and creates jobs. Canada has benefited, as of today, from roughly $608 billion of inward investment. That has allowed Canadian companies, on the basis of reciprocity, to undertake upward of $685 billion of investment outwardly in virtually all countries of the world.

What we have not heard from the members opposite and what their motion today disguises is a reaffirmation of what we know to be their policy, that they are opposed to investment, not just the Nexen and Progress deals and not just closer scrutiny of state-owned enterprises, which is what our government is enacting with the decision on Friday and in which a lot of work happened earlier to bring about those decisions. Opposition members are opposed to something much more dramatic, which is free market, private sector investment in this country, which, in a globalized economy, as we know, is the absolute lifeblood of the jobs, growth and long-term prosperity that Canadians want to continue to develop on the basis of which we have achieved our standard of living over centuries.

It is not just a matter of this decade or century that we have depended on investment from outside our borders and on making investments outside our borders for our prosperity, it happened throughout the 20th century. It certainly was a driver of Canada's success in the 19th century and, for centuries before that, Canada has had an open economy based on global markets where, yes, we have had to determine the net benefit to us, what our national interest was, but where we have thought to not only keep our own economy open but be advocates of an open global economy, one where companies owned by private interests, including Canadians and sometimes not including Canadians, are attracted to our shores by a beneficial tax regime, by a commercially-oriented rule of law, by enforcement and implementation of the rules in this country, something this government has taken absolutely seriously starting in 2006. It is in that spirit that Friday's decision was made.

We will continue to refine the rules and guidelines governing Investment Canada under the Investment Canada Act. We have said again and again that we are not prepared to rubber-stamp every investment in this country, those involving state-owned enterprises need particular scrutiny, nor are we willing to put up a wall the way the NDP has said time and again that it would do should the opportunity ever be given to it.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:55 p.m.

NDP

Jamie Nicholls NDP Vaudreuil—Soulanges, QC

Mr. Speaker, the issue before us today is the net benefit to Canadians.

In addressing this issue, we ask what the Canadian economy needs and we see weaknesses when it comes to innovation in certain economic sectors.

Therefore, I wonder if the Parliamentary Secretary can answer the following question.

After 40 years of investment in innovation in horizontal drilling technology, what protections do we have that CNOOC or Nexen will not export this technology and basically take that 40 years of investment away and use it at their own leisure around the world?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

12:55 p.m.

Conservative

Chris Alexander Conservative Ajax—Pickering, ON

Mr. Speaker, the answer to that question is very simple. Canadians have the protection afforded to them by the laws of Canada, by the rule of law upheld in the commercial sector across the board in this country. We are proud of the fact that we have among the most robust regimes in the world governing our intellectual property. We know that the NDP delights in poking sticks into the system, threatening to undermine it, whether it relates to pharmaceutical drugs or cultural industries. It blows hot and cold on the rule of law, especially when it involves intellectual property, innovation and research and development, which are affected by even small changes to the intellectual property regime.

Anything that is protected, anything that has been invented by a Canadian and to whom a Canadian patent belongs, including a company or person holding that patent, will be afforded the most robust protections available on the planet. We are very proud of that fact.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, I have lots of question, particularly considering the fact that in 2010 the Prime Minister promised to create a clearer and more transparent process for the review of foreign investment. We are still left with an awful lot of questions and not very much clarity. For example, we do not know, and perhaps my hon. colleague could tell us, what the definition is of the exceptional circumstances in which the government would allow further investments in the oil sands, particularly by state-owned enterprises. Is there some reason there is a set of rules specifically for the oil sands and no other sectors? Is the government really saying there are no other important strategic sectors that it would treat in a similar way?

The fact the government has not set out the sectors that it is going to protect and has just picked one and left it at that shows how ad hoc its approach is. It shows the lack of a plan, even though the Prime Minister promised two years ago to bring one forward.

If the member has time, I would also like to know whether the government's foreign investment criteria comply with any of the conditions requested by Premier Redford.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1 p.m.

Conservative

Chris Alexander Conservative Ajax—Pickering, ON

Mr. Speaker, a question like that is revealing because it shows how far the Liberal Party, even today, is from understanding the reality of the Canadian economy. For someone on that side, perhaps it is not surprising to hear him asking why the oil sands are special and deserve special scrutiny. It is because they are the object of unparalleled interest in investment circles globally. As the Prime Minister has said, state-owned enterprises have been particularly active recently in acquiring companies involved in the Canadian oil sands, and others may have followed suit without clarification of the rules.

Does the Liberal Party realize, as the NDP clearly does not, that the oil sands are an asset? Clearly, some of the statements we heard by Liberal members of Parliament about Alberta would lead one to question whether they understand the importance of this sector, of this asset, for the Canadian economy as a whole.

As the Prime Minister said, of those proven oil resources not controlled by governments—and governments control very many of them, whether in Latin America or the Gulf—some 60% are in Canada's oil sands. That, in and of itself, should justify very close scrutiny. It should justify clear rules and guidelines. That is exactly what Canadians were given by the Prime Minister on Friday.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, I am glad that I am the next speaker, because it gives me a chance to answer the question by my hon. colleague.

Yes, the Liberal Party understands the importance of the oil sands, and my question did not suggest otherwise. In fact, my question asked if the government really believed that it was the only such sector.

Yes, it is an important sector. That is why the Atlantic Liberal caucus was there in the last month, meeting with people there. Of course, there are a lot of Atlantic Canadians working there. It is important to the national economy. I certainly enjoyed my visit and found it very interesting.

We recognize its importance, but is he really suggesting that it is the only important sector of our economy? Is he really suggesting that the government should not have an overall strategy? Is he saying that our economy is so weak in other respects that there is no other sector in the country worthy of this kind of preservation and protection? I find it a very strange policy for him to have said that the only important asset to us happens to be in one province, the province of the Prime Minister. Yes, it is an important asset, but if that is their strategy it simply shows their lack of planning, their lack of an overall strategy and the fact that the Conservatives are giving a knee-jerk reaction to what is before them without much planning.

I am pleased to have the opportunity to speak to this motion. As a matter of fact, the industry committee last spring passed my motion to study the Investment Canada Act and to look at these questions like the net benefit test and how it ought to be reformed. However, the Conservative Party of course has the majority on the committee and defines or controls decisions on what the committee will study, and the committee has not chosen to study this topic. I can let people draw their own conclusions about that, because these meetings at committee on what we are to discuss are all held in camera, at the Conservatives' insistence. I cannot say what happened at those meetings, but I can certainly let people draw their own conclusions about them.

I suspect it is because the Prime Minister's Office prefers that these discussions be held in private, even though the Prime Minister promised back in 2010 to bring more clarity and transparency to the process of foreign investment review.

I very much look forward to the debate to see what members on the government benches think about the need to clarify the net benefit test or to change this process in various ways, and what they think the criteria should be for investments by state-owned enterprises.

As well, I believe the issues of reciprocity and transparency need to be fully explored. I hope there will be some discussion around what sectors of our economy besides the energy sector ought to be protected from the potential for government interference or state-owned enterprises from outside Canada.

Perhaps the most important issue, though, in terms of foreign investment will be how we make sense of the Conservative government's incoherent policy that it seems to be making on the fly.

Liberals believe that foreign investment is necessary and welcome in Canada, but we believe that we have to let the world know that while Canada is open for investment, it is not for sale. We have been clear that the rules surrounding foreign takeovers under the Investment Canada Act must be made transparent and be applied consistently. We do not see that, though, with the government. What we saw announced last Friday is likely to make the process even more arbitrary and even more subjective.

Ever since the failed potash deal, we have been asking the government to clarify the definition of net benefit, and the Conservative Party has failed to do so, despite the Prime Minister's promise otherwise. Considering his promise to provide more clarity and transparency to the review of foreign investment and the whole process itself, let us examine the kinds of questions that the Conservatives' mismanagement of this file have left unanswered.

First, what exactly is the definition of “exceptional circumstances”, those circumstances in which the government would allow more acquisitions in the oil sands by state-owned enterprises. We do not know; that is up in the air. There has been no definition of that. It is a new phrase that the Prime Minister has pulled out of some hat.

Second, would the CNOOC and Petronas deals be approved under these new guidelines to be applied from here on? We do not know the answer to that.

Why is there a separate set of rules specifically for the oil sands and for no other sectors? Are there no other sectors the government thinks are particularly important strategically? For example, there are many who argue that shipbuilding is an important strategic industry, because if we were in a conflict, for example, we had better have the ability to build our own ships, or perhaps aerospace is a strategic industry. There are so many other areas, including high tech and so forth, that are important for various reasons.

We should examine the reasons why a particular industry is strategic, critical and worthy of this kind of protection from the government, when others are not. What is it that is particularly important about these industries? I am not questioning that the oil sands sector is an important one, but are there no others? That is the point. If they are going to talk about others, which others and why? Is it because of the industry's capacity to create jobs in the future? Is it because of some other important criteria? This is the discussion we should have had two years ago, not just now.

Does this mean the government does not believe that other sectors are as important? That is the point. What would be the criteria today, if there were an offer for PotashCorp? We do not really know. That is another question up in the air. Would it be net benefit, net benefit plus exceptional circumstances, or something else entirely?

We also do not know whether CNOOC, the Chinese company that the government approved to purchase Nexen, improved its original proposal to meet the concerns raised by Canadians, particularly, for example, those discussed by Premier Redford of Alberta. For instance, she said that in her view at least half of the directors on the board of Nexen should be Canadian. My own view is that they should have a majority, but I am not very far from Premier Redford on that point. We have to assume that has not happened because we have not heard it from the government. However, the Conservatives, despite all their promises of transparency and clarity, have not told us whether that is the case or what other conditions have been met or what the details of the agreement are.

What changed in relation to the Petronas deal to make it acceptable now, when the Conservatives determined it was not a net benefit to Canada earlier this fall? What happened in that deal that made the government change? We do not know. The Prime Minister, in all his transparency, has not told us because, apparently, as Canadians, we do not deserve to know. It is not important that we should know. The Conservatives feel we should rely on them and trust them. That is the message.

Did the Conservatives get any guarantees that Canadian companies would have reciprocity in China? We do not know the answer to that. Do we know whether any of our businesses would have an easier time operating there? There is no indication to that effect. Industry Canada documents state:

Non-controlling minority interests in Canadian businesses proposed by foreign [state-owned enterprises], including joint ventures, will continue to be welcome in the development of Canada's economy.

That is the statement that came with the announcement on Friday. Therefore, the government would approve other CNOOC-type deals, as long as they involved only minority interests. What is the definition of a “minority interest”? Is it 20%, 30%, 40%? We know that in a widely held public company, they do not have to have 50% to have effective control. It could be a lot less than that, sometimes as little as 20%. Is that what the government means?

What we do not know is what would happen if Nexen were to apply to the Alberta government to expand dramatically or to go into other areas and get other leases and become a much larger player in the oil sands than it is now. If the Conservatives are concerned about that happening, what measures are there to prevent it? I do not see any.

The most ironic thing, though, about last Friday's decision is that while the Conservatives are dead set against Canadian state-owned companies being involved in the oil sands, we see now that they are perfectly content to allow foreign state-owned enterprises from China or Malaysia to be involved in the oil sands. It is quite a thing. I find it incomprehensible as a matter of fact.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:05 p.m.

An hon. member

It is a contradiction.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:05 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

It is a bit of a contradiction.

Mr. Speaker, as I noted earlier, following the 2010 PotashCorp decision, we called on the government to ensure more transparency with regard to the decision-making process surrounding foreign acquisitions. In fact, the Prime Minister committed to doing that. Our request included asking for greater detail and defining of the net benefit test, and for a more accountable and transparent review process so that Canadians could know what was being negotiated. We have also asked to increase the clarity around the role of the affected province or provinces, and to provide a mechanism for their input.

As far as we can tell, because we have not heard otherwise, the government had no consultation with the provinces. Fortunately Premier Redford came out publicly in a letter to talk about what her view was, but we never heard if the government went to ask her or her government's views and thoughts on how to deal with this situation. With respect to conditions that can be attached to a transaction, we have said that these must be completely transparent and easily enforceable.

Finally, we have also introduced the notion of reciprocity. We are not the only ones to do so. I hear many commentators talking about the importance of that, about reciprocity of access to the country of the purchaser. There is the question about whether countries buying from Canada have to give the exact same access in their own country, or whether it should be access that has equal value and equal impact.

It seems to me that what we are looking for is something that would provide a benefit to Canada that is equal to what another country is getting by investing here. I do not think that it needs to be exactly the same kind of access, as long as we are getting something that is of an equivalent worth, that there is a quid pro quo in the transaction. There is an awful lot of agreement when that happens. For instance, let us hope that the NHL players and the owners find some way to find, maybe not the exact exchange of things in their agreement when it comes, but let us hope they will be flexible enough to find one very soon.

Liberals believe that Canadians deserve to know as much about the terms and conditions of these transactions as possible. Without that, how can Canadians properly evaluate these transactions or determine the impact on our economy? Is it not the right of Canadians to do that, to make that evaluation, to assess for themselves? The government seems to think that we should leave it to the Conservatives and let them handle it quietly and in secret. It thinks that Canadians really ought not to have the details so that they can make their own judgments. That is not a very democratic approach, if I can be forgiven for saying so.

The government has been dragging its feet on clarifying the net benefit test for far too long. This has hurt the Canadian economy and it has hurt foreign investment opportunities. There is a lot of uncertainty out there in the world about where Canada has been standing on this and that probably hurts.

However, I want to agree with my hon. colleague who spoke before me about the fact that we do want to have foreign investment. It is important for our economy. Over the years when the Liberals were in government, I do not recall hearing of any occasion when the Conservatives opposed any of the investments that we approved. On the other hand, nor do I recall hearing of the NDP ever supporting any of the foreign investments that occurred during that time, so that is interesting. I suppose it is partly because of the attitudes. From the Conservatives' point of view all the problems in the world are the fault of government. Governments cause all the problems. With the NDP, government is the solution to all the problems. I do not think either one of those is very accurate, but those are their points of view.

Conservative mismanagement in this process has put thousands of jobs and billions of dollars in investment in jeopardy and that is not acceptable. Because the Conservatives have politicized these files, they have created an environment where companies cannot accurately calculate the risk they are taking when investing in Canada. That is a problem. That is bad for the economy and it is another example of economic mismanagement by the Conservatives. Another example of that would be the fact that they took a $13 billion surplus and put the country in deficit before the recession began. If that is not economic mismanagement, I do not know what is.

We need to know if Canadian companies will have the same level of access to foreign resources and other sectors in foreign countries. What is going to happen? We have not heard a word about that from the Prime Minister or the government. If the Prime Minister is going to make an announcement, he has a responsibility to answer some questions about these details. We have not heard those answers.

If the government approves foreign takeovers without building reciprocity into those deals, it is a missed opportunity that will harm Canadian business and the Canadian economy. As well, the government needs to tell us what enforceability measure it has in place to ensure that CNOOC lives up to its requirements. We are talking about having monetary provisions and so forth. We are not aware of any existing in this case. The government has not told us about that. I have to presume there are none, with no particular consequences if foreign investors do not live up to their requirements. That is problematic.

Since 2006 the Conservatives have refused three foreign acquisitions: MDA, PotashCorp and Progress Energy temporarily, all for different reasons. MDA was for security reasons. Potash was labelled as a strategic asset. Does that mean that maybe it is potash and the oil sands and nothing else? The government is not saying that potash will be, so that is not clear. The Petronas-Progress Energy deal was rejected because it was not a net benefit for Canada. However, it was submitted again and now it has been approved, leaving even less clarity.

Following the 2010 rejection of the PotashCorp acquisition, the government said it would revise the regulations surrounding foreign investment. We have seen very little of any substance in that regard. The only change since then has been the following. The government has now given itself the capacity to release in public the reasons for a refusal. That is something, and I am glad to have it, but it is far from what was promised by the government. The government now has the capacity to request monetary guarantees to ensure the acquirer lives up to its promises. That is a small step and we will take it, but we need a lot more.

While the Conservative government promised to bring more clarity to the process, it has only really made it more complex and raised more questions. What is the exceptional circumstance in which the government will allow further acquisitions in the oil sands by foreign state-owned enterprises? I hope someone on the Conservative side will answer that. Why draw a line at the oil sands and not include other sectors? Why is the government not adding more transparency to the process, which is what Canadians are really asking for?

I hope that some of my colleagues on the Conservative benches will provide in the debate today some of the answers that are sorely lacking so far and that Prime Minister did not provide on Friday. I hope that they have been listening to the list of questions that I have given. They can come over and see me and I can give them some of those questions, but there are lots that have not been answered so far.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:20 p.m.

Ajax—Pickering Ontario

Conservative

Chris Alexander ConservativeParliamentary Secretary to the Minister of National Defence

Mr. Speaker, we were quite clear on why the oil sands merit special attention and special scrutiny. There is no asset in Canada on this scale in the natural resources field or elsewhere, which is in such great demand. The inability of the member opposite to acknowledge that fact demonstrates a certain lack of understanding of the Canadian economy.

My question to him has to do with the distinction we have now made between a Canada that is open for business from the private sector worldwide for the oil sands and elsewhere, and a Canada that is now determined under this government to scrutinize what enterprises controlled by a foreign government might wish to do in our oil sands.

Does the Liberal Party of Canada accept that this is a necessary distinction if we are to protect the free enterprise initiative, the leadership of free enterprise in the oil sands, in our energy sector and in our economy as a whole? Is the Liberal Party of Canada going to stick to its usual line of being prepared to rubber-stamp investments across the board, which would have the effect of potentially opening the door to a Canadian oil sands sector dominated by state-owned enterprises? Is that a result that the hon. member wants to see?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:20 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, the parliamentary secretary gave a list of questions but I did not hear much in the way of answers to my questions. I hope that others will provide them in due course.

We have expressed concern throughout this process about the fact that we are looking at state-owned enterprises investing in Canada. I talked previously about the concerns I have about Chinese state-owned enterprises being involved in our telecommunications sector, which is particularly disturbing and concerning when we consider the importance of that in terms of what valuable and discreet or secret information goes across the Internet throughout Canada or across phone lines and other lines of communication. To have a state-owned enterprise in what is a totalitarian state so engaged in that process is disturbing. It is not clear to me that the government has taken the required measures to overcome those concerns.

What I find contradictory though is that my colleague says the oil sands is the only asset on this scale that is worthy of being protected as strategic. That does not explain why the government said no to the potash deal on the basis that it was a strategic sector. How can the member say on the one hand that there are no other strategic sectors, yet on the other hand say potash was? It does not make any sense to me.

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:20 p.m.

NDP

Linda Duncan NDP Edmonton Strathcona, AB

Mr. Speaker, I listened with interest to the member's speech on the motion. I appreciate that he is showing some support for what we are calling for, which of course, is simply mirroring what the Calgary Chamber of Commerce has called on the government to do.

One of the most important things for this House to recall is that we are a democratic nation. That means we base our decisions on the rule of law. Duly elected officials make the rules and then run the country based on those rules.

On this side of the House, NDP members have raised ongoing concerns about the handling of foreign takeovers. In almost all cases of late, the government has failed to take any real action to enforce conditions on any of the foreign takeovers. For those reasons, we are raising concerns about the way we are proceeding and the fact that, frankly, there is very little in the law, and what is in the law is not being enforced. Could the member speak to that?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:25 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, my hon. colleague's question reminds me of an article I read in law school on the rule of law. As the member said, it is about following the rules and not making them up as one goes along. Of course, the rule of law also means that it applies equally to everyone, which is a very important principle. In many countries around the world it is a provision that is needed.

However, one needs to ensure that there is enforcement of the law and that the same rules are enforced for everybody. In this case, we do not know how the rules will be enforced.

This is a concern, as there has been very little from the Conservative government in the way of enforcement of provisions on past foreign acquisitions. We do not even know whether the Conservatives' new plan that they have brought forward to have monetary penalties for non-compliance would be applied in this case. The Prime Minister certainly did not say so.

How is the government going to enforce the requirements here? How is it going to enforce the employment promises made by CNOOC, and so forth?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:25 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Speaker, I think it comes down to one simple question, which I would ask of my colleague: Is this simply the Conservative government making policy by the seat of its pants?

It is clear that it is. They can laugh on the government side, but my colleague who sits on the industry committee made it clear that the industry committee has been raising questions for a long time.

I would ask the member: What are some of those important areas that we do not know about, based on the statement by the Prime Minister? Has the industry committee been consulted?

I have a statement here by the Premier of Alberta. She said:

We will, in the coming days, discuss this announcement with the federal government and study the implications of the statements about future investments by state-owned enterprises.

Is the premier really suggesting here that, in the provinces where the oil sands are the greatest—probably Saskatchewan and Alberta—those premiers were not even consulted by the Prime Minister on a policy that is supposed to be strategic to the country as a whole?

I ask my colleague: Did we get reciprocity with China in this deal?

Opposition Motion—Investment Canada ActBusiness of SupplyGovernment Orders

1:25 p.m.

Liberal

Geoff Regan Liberal Halifax West, NS

Mr. Speaker, I am not sure I have time to answer all of those questions. Usually one gets a long list from the opposition, but my hon. friend has made it tough on me with a good list. However, I think he has raised some very good questions. If I do not have a chance to answer all of his questions, I hope that others will try.

I am particularly anxious to hear from the Conservatives about reciprocity. So far, I certainly have not heard about any reciprocity or any openness we are going to receive for Canadian investors and companies that are active in China. Let us hope that it will produce something positive, but we certainly have not heard anything. It does seem to be on the fly.

Again, the fact is that the Conservatives have only picked this one sector as their strategic sector, even though they have previously identified other areas as strategic. In fact, I bet if we look at various announcements and speeches that Conservative ministers have given over the years we would find the word “strategic” applied to a whole bunch of sectors. I cannot imagine that we would not. Yet, now they are saying there is only one sector that is strategically important enough to have the protection we are talking about here.

Are the oil sands important? Absolutely. Are they the only important sector of our economy? God forbid that should be the case.