Mr. Speaker, I want to thank the member for British Columbia Southern Interior for sharing his time with me.
I am rising today to speak to the motion that was proposed by the member for London—Fanshawe, which reads:
That this House condemn the decision of Caterpillar Inc. to close its Electro-Motive Diesel plant in London, Ontario, with a loss of 450 jobs, and that of Papiers White Birch to close its Quebec City plant, with a loss of 600 jobs, and call on the government to table, within 90 days, draft amendments to the Investment Canada Act to ensure that foreign buyers are held to public and enforceable commitments on the 'net benefit' to Canada and on the protection of Canadian jobs.
The member for Rimouski-Neigette—Témiscouata—Les Basques, who is the NDP industry critic, stated:
Foreign investment in Canadian companies can be a good thing. But companies must establish how this investment will have a net benefit to Canada and local communities. The law calls for this, but never defines what this means. The Act must be changed to better protect our communities.
It is not just the NDP members who have been raising concerns about the Investment Canada Act. An article entitled, “Investment Review in Canada--We Can Do Better”, raised a couple of points that I want to touch on, because it reinforces what New Democrats have been calling for.
I want to focus on the net benefit test. The article states that the net benefit test has broadly objective factors set out in the statute. Some factors remain not adequately defined or sufficiently precise. The task is to make those factors much better defined and more specific and less arbitrary and open-ended.
In addition there was a 2008 competition policy review panel report which had a number of recommendations. I want to touch on two aspects. The review panel report is an element for discussion in this process. The report indicated that the government might want to replace the net benefit test with a contrary to Canada's national interest test. I might point out that these recommendations were not followed. This was a policy report and absolutely nothing has happened with it.
Another recommendation that was not followed was to reverse the onus in applying the test so that the industry minister would have to demonstrate that a proposed investment would not be in Canada's national interest.
The question becomes, why should we modify the net benefit test? Again, the article, “Investment Review in Canada--We Can Do Better”, states:
How Canada balances an open foreign investment policy with the objectives of ensuring net economic benefit to the country and meeting national security concerns will continue to be a major policy challenge.
Currently, section 20 of the Investment Canada Act is unclear. For example, paragraph (a) refers to the effect of the investment on the level and nature of economic activity in Canada. What exactly do we mean by economic activity? How is that economic activity measured? Also under the act, the approvals and rejections themselves are full of mystery. The industry minister has too much discretion in making these decisions, most of which is outside the public eye. No public details are provided in applications for approval of reviewable investments.
The article mentioned that consequently, “the task ahead is to recalibrate the legislation to make the process more open and predictable, both for the application of the net benefit test and for determinations of national security issues”.
One of the things that could happen is where net benefit approvals are given subject to undertakings, the content of these should be made public and metrics provided so as to monitor the fulfillment of these objections.
We have a couple of sources that are calling for some improvements in the net benefit test.
The 2011 Council of the Federation report echoed some of these recommendations:
They noted the importance of transparent, timely and stable rules to evaluate responsible foreign investments in Canada. Premiers agreed on the priority of ensuring that commitments made by foreign investors through the review process are effectively enforced.They also agreed on the importance of public dialogue on proposed foreign investments. Provincial and territorial participation in determining what constitutes a net benefit to Canada is essential.
I want to turn to some matters in Nanaimo—Cowichan. My riding has been becoming more diversified over the years, but we still have significant forestry and forestry-related activities in Nanaimo—Cowichan.
The headline of an article in the Cowichan News Leader on February 2 reads, “Crofton status has Cowichan on high alert”. Some of the conditions that are outlined in the Crofton mill are eerily similar to those pertaining to White Birch. I must add that the Crofton mill is still open and operating. The White Birch mill was sold to a U.S. asset management company. The union was pressured to make concessions and eventually the White Birch plant was shut down. What is happening at the Crofton mill is a little different. The article states:
Life without the struggling Crofton pulp mill isn't a pretty picture to many Cowichanians--or to Catalyst's brass.
But that stark possibility came into sharp focus this week when the B.C. Supreme Court approved creditor protection for the mill's debt-ridden parent company, Catalyst Paper.
Catalyst is a company which over the last several years has gone through various changes in ownership. Progressively the company has become more and more debt laden. The Catalyst mill in Crofton is actually profitable, but because of the company's structure, there are other mills involved.
The article goes on to quote Duncan-Cowichan Chamber of Commerce boss, Ranjit Dhami, as saying:
“I'm worried for my community. People are used to living certain lifestyles--imagine if they lose their jobs.”
That's a terrible thought to valley millwright Bruce Carter.
“It would affect me tremendously--85 per cent of my business is through Catalyst Paper,” he said. He echoed Dhami's ideas of local unemployment shock.
“If Crofton goes under, it'll be cold turkey,” Carter said of Cowichan's economic fallout.
Further on the article mentions that they are not just talking about those good paying jobs at the mill; they are also talking about the direct and indirect jobs that result from it. A number of years ago when the mill was on strike for nine months, we actually saw a ripple effect throughout the community which lasted far beyond those nine months. Many small businesses suffered as a result of not having the workers with those good paying jobs.
We are seeing a pattern of pressure for workers to make concessions to these companies without any consideration of the impact that would have on our local communities. The article goes on to state:
But Dave Coles, CEP's president, chastised the federal Conservatives for not acting to help forest workers and their communities.
“Our repeated requests for temporary loan guarantees to assist the forest industry have been ignored,” he says in a press release, noting that governments have helped other industries in similar situations.
“Forestry was once a cornerstone of the Canadian economy and--with the political will--could be again. But the [Conservative] government has never even acknowledged our request for a summit of stakeholders to study renewal”.
We have heard in this House many times about the job loss in the manufacturing sector in this country. We need a job creation strategy that looks at maintaining and preserving the manufacturing and value-added sectors in this country so we continue to have those good paying jobs.
There are other models out there. I want to touch on one. There is a model in Nanaimo called Harmac Pacific. A number of years ago that mill was in trouble. The employees said they wanted to protect and save their jobs and ensure that the mill continued to be a viable contributor to their community. There was an employee-backed purchase of the Harmac Pacific mill site. This has created a diversified industrial site centred around a highly competitive, low cost northern bleached softwood kraft pulp production facility. The shared focus of all owners is to maximize the profit potential of the Harmac Pacific pulp mill and associated property facilities. It is another model the government could look toward in terms of investing in our communities.
We need a strategy that looks at things like raw log exports. That is an example of explicitly exporting our jobs south and overseas. We have examples in Gold River where the mill had to close again. It was bought by another company. It refused to ride out the economic downturn and decided that it did not want to run a pulp business. It sold off the assets and the community was left high and dry. This pattern is repeated time and time again across this country.
I urge all members to support this NDP motion to protect our communities and protect those good paying jobs.