Debates of Dec. 4th, 2014

Takeover of Stelco

[Chris Charlton, NDP, Hamilton Mountain, ON]

Mr. Speaker, I am pleased to rise in the House today in support of Motion No. 537, which was put forward by my NDP colleague, the member for Hamilton Centre. I apologize to the interpreters; I may be speaking a bit fast tonight, but I have a lot to say on this topic.

For those of us in the NDP caucus who represent Steeltown, this motion could not be more timely. It demands accountability and action from the Conservative government to compensate Hamiltonians and steelworkers in particular for allowing U.S. Steel to run roughshod over the requirement to provide a net benefit to Canada as a result of its takeover of Stelco.

In fact, New Democrats have been demanding such action from the federal government ever since it became apparent that U.S. Steel was flouting its obligations as spelled out under the Investment Canada Act.

Unfortunately, like their Liberal predecessors, the Conservatives simply refuse to ensure that foreign investments: (a) create new jobs for Canadians; (b) bring new capital to Canada; (c) transfer new technology to this country; (d) increase Canadian-based research and development; (e) contribute to sustainable economic development; and (f) improve the lives of Canadian workers and their communities.

Only if all six of those conditions are met, can any government feel assured that new proposals are indeed of net benefit to Canada, which is, after all, the key legal criterion for determining whether a foreign takeover should be allowed to proceed. Instead, foreign investments have been approved despite the fact that they were motivated simply by a desire to gain control of Canada's strategic industries and resources. Sadly, that seems to be just fine by the Conservative government.

Let us review what has been happening in Hamilton. U.S. Steel acquired the former operations of Stelco Inc. in 2007. That included both Hilton Works in Hamilton and Lake Erie Works in Nanticoke.

Under the Investment Canada Act, U.S. Steel had to demonstrate that its investment would provide a net benefit to Canada. As a result, it had to make commitments with respect to job creation, production levels, and domestic investment. To that end, U.S. Steel and the Government of Canada signed an agreement that committed U.S. Steel to 31 different undertakings and promises. U.S. Steel then started up its operations in the fall of 2007. Just a year later, layoffs began at Hilton Works and in 2009 at Lake Erie Works as well.

In the spring of 2009, the government started to ask questions, and U.S. Steel responded with a whole host of reasons for why it is excused, or ought to be excused, from meeting its employment and production commitments. The excuses did not fly, and so the government took U.S. Steel to court in July of that year.

The Steelworkers and Lakeside Steel, a company with a potential interest in acquiring U.S. Steel operations, were granted intervenor status. This was a huge victory for the steelworkers. Winning intervenor status is rare in cases such as these, but the court said that the union had “unique interests” that ought to be considered in determining an appropriate remedy.

U.S. Steel, of course, did not just roll over, and so in September of 2009, the company went back to court challenging the constitutionality of the entire act. The judge dismissed U.S. Steel's claim. Once again, U.S. Steel filed an appeal, and then asked for a stay. The court did not grant the stay application, but the Charter challenge was never resolved.

Even just to that point in the U.S. Steel saga, a number of points had already been thrown into relief. First, by taking U.S. Steel to court, the federal government acknowledged that it does indeed have a legal duty to ensure that foreign investments provide a net benefit to Canada.

Second, the case made it clear that commitments made by foreign corporations with respect to job creation, production levels, and domestic investment are legally binding. They are not fairweather wish lists that foreign corporations can unilaterally abandon. Both of those things are good news; but, and this is a big but, clearly these are not ironclad guarantees.

In fact, when the Conservative government rolled over in December of 2011 and dropped its lawsuit against U.S. Steel, it got nothing in terms of either guaranteed production or employment levels at the former Stelco. Instead, it got a promise of new investments of $50 million in both the Hamilton and Lake Erie plants, which many of us believed at the time was simply a way to fatten the pig before the slaughter, or in this case, before a sale.

In any event, the Conservatives completely let the company off the hook, and effectively said to all foreign investors that Canadian companies are free for the taking and that the legislated need to secure a net benefit from such transactions will simply not be enforced.

How can that be? What was in the original agreement with U.S. Steel that let it get off the hook so easily? What happened behind closed doors between the government and U.S. Steel? In truth, we will never know. Herein lies the crux of the problem. We do not know, because the agreements between foreign corporations and the federal government under the Investment Canada Act are negotiated in private and are never made publicly available.

It does not need to be that way, and it should not be that way. That is why the motion before us today mandates the government to make public the commitments U.S. Steel agreed to under the Investment Canada Act in respect of the acquisition of Stelco Inc. in 2007, and the 2011 out of court settlement, concerning employment and production guarantees and maintenance of the employee pension system.

This is absolutely critical and mirrors my own private member's bill, Bill C-358, the Stelco Inc. acquisition act. My bill is short and to the point. It requires the Government of Canada to publish: (a) all written undertakings given to Her Majesty in right of Canada under the Investment Canada Act in respect of the acquisition of Stelco Inc. by the United States Steel Corporation in 2007; and (b) all demands sent by the Minister of Industry in respect of those undertakings.

The intent here is clear. The single biggest challenge to holding companies to their commitments is not knowing what commitments were made in the first place. In essence, we are creating a legal requirement for transparency and accountability. The alternative is what is playing out in Hamilton right now. With a government abdicating its responsibility to hold companies to their commitments, hundreds of workers are now fearful of losing their jobs, and over 9,000 pensioners are terrified that their pension plan may be wound up and that they will lose a significant portion of their hard-earned retirement benefits.

That is why the motion before us today concludes by calling on the government to take immediate action to ensure pension benefits remain fully funded and protected, including amending the Bankruptcy and Insolvency Act and the Companies' Creditors Arrangement Act to protect worker pensions in the event of bankruptcy.

Allow me just to expand on this a little further.

Whenever we mention pensions and USW Local 1005, old rumours begin to resurface about how the current bind can largely be attributed to the Rae government in Ontario. I am no fan of Bob Rae, but this misinformation campaign is readily disproved by the facts. The contention is that it was the NDP government in Ontario that threw the floodgates wide open for corporations to underfund their pension plans, and that is why we are in such difficulty now. That is complete nonsense.

Let me once again set the record straight. It is true that a number of companies approached the government in the early 1990s with a request for pension contribution holidays during what was then a very serious recession. The government did approve a limited number of those requests, but only on the condition that companies had to file detailed plans with hard deadlines for repayment of the plan. Every one of the companies approved by the NDP government met those conditions. Every pension plan was repaid.

Stelco did not apply for its contribution holiday until after Mike Harris came to power in June of 1995. Stelco filed its election to pay penalties rather than fund the pension plan in June of 1996. The Harris Conservatives allowed that to happen without any requirement that a pension plan repayment schedule be either filed or met. Without such a binding requirement and without any enforcement, underfunded pension plans began to abound in Ontario. That is how we ended up in the mess that has now become a full-blown pension crisis. That is why we need to pass the motion that is before us today on an urgent basis.

The workers and pensioners at U.S. Steel deserve the government's support. They did not approve the foreign takeover that led us down this path; the government did. While an apology to Hamiltonians for not securing a net benefit for our community would be a good start, concrete action on full disclosure and pension security would offer real assistance to the innocent victims of this sweetheart deal with U.S. Steel. Frankly, steelworkers and their families deserve nothing less.

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

Mr. Speaker, in response to the motion from my colleague regarding the acquisition of Stelco by U.S. Steel in 2007, under the Investment Canada Act, I rise today to speak to the importance of foreign investment to Canada's continued prosperity.

This motion implies that U.S. Steel's current situation is indicative of a flawed foreign investment policy. We disagree. Trade and investment, both into and out of Canada, provide the foundation for Canada's continued economic growth, wealth, and job creation. Foreign investors have recognized that Canada is open for business under the Conservative government and have been attracted to the opportunities provided by a strong, dynamic Canadian economy.

We have created a transparent, stable, and predictable economic climate that benefits both Canadian business and foreign investment. Our government is committed to creating the market conditions that will continue to attract international capital, technology, and innovative ways of doing business.

The benefits of foreign investment are well recognized. First and foremost, foreign investment creates high-paying jobs for Canadians that contribute to our overall economic productivity.

Second, foreign investment provides new capital, which Canadian firms need to fuel growth and make the investments needed to succeed in an increasingly competitive global economy. This includes introducing new technologies and innovative business practices to Canadian enterprises, which, as a result, can prove crucial to the expansion and development of important sectors of the Canadian economy. This is especially true for Canada's abundant natural resources sector and our domestic manufacturing base.

Third, foreign investment exposes Canadian businesses to the knowledge, capabilities, and management expertise of world-leading businesses. Such knowledge transfers can increase the productivity, efficiency, and competitiveness of Canadian firms. At the same time, Canadians benefit from lower prices that may result from these efficiencies and gain greater domestic access to innovative products and services.

Finally, foreign investment also provides Canadian businesses with valuable access to new markets. Canada is, and always has been, a trading nation, from our earliest days as a country. Foreign investment can play a valuable role in integrating Canadian firms into global value chains. In addition to expanding the capabilities of Canadian business here at home, foreign investment can provide an unparalleled opportunity to tap into the world's fastest growing economies and secure these markets for Canadian exports.

To reap the benefits of foreign investment, Canada must maintain the economic conditions necessary to attract foreign investment in the first place and foster a welcoming environment for such investments to thrive.

I would note that Canada's economic performance under our government has been very strong compared to our peer countries in the aftermath of the economic downturn of 2008. Since that time, Canada has achieved one of the best job creation rates and economic growth rates in the G7. This achievement is remarkable, given that it took place against the backdrop of global economic uncertainty and a slowdown in exports stemming from economic problems experienced by our key trading partners. Despite these economic headwinds, recent studies by the Bank of Canada and the International Monetary Fund note that Canada is poised to continue to be among the lead G7 countries in economic growth in the years ahead.

Canada's strong economic performance is due in large part to our government's commitment to economic fundamentals. In a global marketplace, with strong competition for foreign investment, it is crucial that Canada provide an economic climate in which Canadian and international companies can succeed and thrive. Our government has worked hard to create the necessary conditions for Canadian businesses and workers to succeed.

We have kept taxes low for Canadians and Canadian businesses to support job creation, growth, and investment in all sectors of the economy. Our government's economic action plan has resulted in significant investments to promote innovation and foster research and development. It has measures to ensure that Canadians are equipped with the skills and training they need to succeed in a globalized economy.

Businesses operating in Canada also benefit from the advantages provided by our sound financial institutions, our highly skilled labour force, and our world-leading capabilities in science and technology.

In addition to these measures, our government, through its trade agenda, is committed to open borders and free trade. History has shown that trade is the best way to create jobs and growth and boost our standard of living.

Our government has worked tirelessly to open new markets, increase exports of Canadian goods and services to global markets, and provide new and diverse opportunities for Canadian companies. Toward this end, since 2006, Canada has concluded free trade agreements with 38 countries and is pursuing trade agreements with many more, including large markets such as India and Japan.

The government will continue to bring the benefits of foreign investment to Canada by maintaining favourable economic conditions. At the same time, this government recognizes that not every foreign investment will be of benefit to Canada. The foreign investment review regime under the Investment Canada Act is a key part of Canada's economic framework. It promotes investment and ensures that Canadians reap the benefit of those investments.

Under the ICA regime, Canadian businesses can capitalize on international trade opportunities, tap into deeper pools of global capital, and obtain greater access to the resources and markets they need to expand, innovate, and create. Ultimately, foreign investment makes Canadian firms and workers more competitive in the global economy.

The foreign investments that have been reviewed and approved under the ICA have boosted Canada's productivity, created jobs, and enhanced research and development. They have also demonstrated to the world that Canada is open for business.

Our government has demonstrated its commitment to ensuring that Canadian businesses can compete in both domestic and international markets. In order to prosper, create jobs, and maintain a high standard of living for Canadians, it is important to adopt policies that encourage trade and investment. Failure to do so will harm our ability to compete worldwide and damage our prospects for economic growth and future prosperity.

Foreign investment is an important component of Canada's economic success in the present day and in the future. Our government, through its economic policies, its trade agenda, and the foreign investment review regime under the ICA, has acted to ensure that foreign investment will contribute to the economic well-being of all Canadians.

Under our government's policies, I am confident that Canada will continue to attract world-class companies with high-paying jobs, leading to the continued success, economic growth, and prosperity of our country.

[The Acting Speaker, Conservative, Barry Devolin]

The time provided for the consideration of private members' business has now expired and the order is dropped to the bottom of the order of precedence on the order paper.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

Agriculture and Agri-Food

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, the member of Parliament for Sydney—Victoria and I raised a series of questions on the inadequacy of the government's response to protect Canadian producers as a result of the loss of our access to the United States Perishable Agriculture Commodities Act. For those who do not understand the background on this issue, let me explain what happened.

Until now, Canadian exporters have had the same rates as American suppliers to recover payments quickly and efficiently if a buyer refuses to pay or declares bankruptcy with unpaid bills. That seriously impacts producers, as we know. When farmers grow products, process them and send them into a business, they expect to be paid. In fact, the consequences of non-payment of those bills could force a single producer or supplier out of business.

Canadian exporters have had special access to the United States Perishable Agriculture Commodities Act, or PACA, as it is best known by, and that access has been revoked. The fact is that our trade in fresh produce with the United States is worth about $1.6 billion. There are a lot of dollars at risk and a lot of risk to Canadian producers in the supply chain.

The Canadian government knew for a considerable time the protection was at risk because the United States had been warning of the loss of that special privilege. However, the Conservative government failed to be prepared when it happened and, as a result, both Canadian producers and consumers could be seriously affected.

There are 140,000 Canadians employed in the fresh fruit and vegetable industry and without the protection of the Perishable Agricultural Commodities Act, the risk of someone not paying his or her bills for produce that has already gone to market would be multiplied many fold.

I know the parliamentary secretary will respond that consultations are ongoing and, yes, I recognize that. However, the problem is that consultations are a two-way street and government has to listen to what industry and producers are saying. The proposal from the government is not acceptable to producers and they have made that clear.

As I said in my question, that proposal from the government will not work and the industry has told that to the government. The facts are that Canadian fruit and vegetable sellers have had long-standing protection under the United States law, and they no longer have that protection as of October 1. As a result, jobs and Canadian farmers are at serious risk. Industry has made it clear that it needs a Canadian-made perishable commodities act, and that is the only option to protect produce suppliers. Why not implement that viable option?

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

Mr. Speaker, I am pleased to respond today to comments by the hon. member for Malpeque on payment protection for Canadian fresh produce sellers in the United States and to set the record straight on our government's action to the fresh produce industry in Canada.

The hon. member, as usual, is clearly mistaken in saying that Canadian fruit and vegetable sellers no longer have protection under the U.S. Perishable Agricultural Commodities Act, or PACA. Canadian fresh produce sellers will still be able to access PACA benefits. PACA officials confirm that most Canadian seller disputes with U.S. buyers are settled informally and that it is only during the formal complaints process that a Canadian seller would need to post a bond.

Moreover, U.S. legislation requires all U.S. buyers to honour their financial obligations to all foreign and domestic sellers of fresh produce. Accordingly, Canadian fresh produce sellers will be treated fairly and on equal footing with all other exporters of fresh produce to the U.S.

The recent action by the U.S. does not impact Canadian buyers of U.S. fresh produce. Therefore, there are no anticipated impacts in terms of availability and cost of fresh produce to Canadian consumers or to jobs in Canada. Our government and the United States department of agriculture committed to establish comparable approaches to protecting Canadian and U.S. fresh fruit and vegetable growers from buyers that defaulted on their payment obligations. We did not commit to identical outcomes or to implement the U.S. law, as the member has suggested.

Surely the Liberal member recognizes that the Government of Canada must work within its constitutional, political and legislative framework in developing a made-in-Canada solution for Canadian produce sellers. The implementation of a single dispute resolution body would enhance the business environment in Canada by providing greater stability through a single unified set of rules governing instances of slow, partial and/or no-pay situations. This would address the majority of non-payment issues and would reduce the risk of fraudulent practices, making Canada an importer of choice.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I know this is not the Parliamentary Secretary to the Minister of Agriculture, but clearly from the remarks, the government, or whoever is talking to the industry, is certainly talking to different players in the industry than we are. The story the member purports to tell on behalf of the government is not what we are hearing from industry.

Industry believes it needs a perishable commodities act that would do the same as the Perishable Agricultural Commodities Act in the U.S. did. What is on the table, as industry tell us clearly, will not do what was previously in place. This is what industry is asking for.

However, what we see in the exchange here is that the government seems to go by its own agenda and does not really listen to producers. I am saying that the government should listen to what producers are saying and help them out.

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

Mr. Speaker, our government does understand the importance of Canada's fresh produce industry and its contribution to the economy. On this side of the House, we listen to farmers and deliver on our promises. That is why, as part of Canada's economic action plan, we introduced clear legislation to provide a single dispute resolution body that would help reduce issues of non-payment faced by the fresh produce industry.

We will continue to expand markets for our fresh fruit and vegetable growers beyond the U.S. and into new markets such as Europe and Asia. Our government is committed to supporting Canadian producers and exporters, and we will continue to review this issue.

[The Acting Speaker, Conservative, Barry Devolin]

The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 10 a.m., pursuant to Standing Order 24(1).

(The House adjourned at 6:38 p.m.)