Mr. Speaker, I am happy to rise to address the concerns raised by the member for Hamilton Centre regarding U.S. Steel's acquisition of Stelco in 2007, a transaction that was reviewed under the provisions of the Investment Canada Act.
In debating the motion today, it is important to bear in mind the actual application of this investment regime and review process set out in the ICA. We should also acknowledge the important amendments our government has made to the ICA to ensure that it continues to effectively attract investment that is beneficial to all Canadians.
In the first section of the Investment Canada Act, the law explicitly recognizes that foreign investment results in increased capital and technological benefits for Canada, which in turn encourages economic growth and employment opportunities in Canada. It mandates that investments be reviewed for their likely net benefit to Canada when they exceed certain monetary thresholds. For a reviewable investment to proceed, the Minister of Industry must be satisfied that the proposed investment is likely to be a net benefit to Canada.
The act focuses on those investments that are likely to be most influential on the economy, usually in the order of 10 to 20 transactions per year. These transactions, although they are all significant, can vary in size. They vary by sector, from natural resources to utilities, from wholesale to retail. They each present their own merits that warrant careful consideration and scrutiny. Therefore, the minister must examine each proposal on a case-by-case basis.
In coming to a decision, the minister must consider the six net benefit factors that are clearly articulated in the act: first, the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, resource processing and the utilization of parts, components and services produced here in Canada; second, the degree and significance of participation by Canadians in Canadian business; third, the minister must consider the effect of the investment on productivity, industrial efficiency, technological advancement and development, product innovation and product variety in Canada; fourth, the effect of the investment on competition within any industry or industries in Canada is considered; fifth, the compatibility of the investment with national, provincial, industrial, economic and cultural policies must be weighted; and sixth, the contribution of the investment to Canada's ability to compete in world markets.
Potential investors provide business plans which can be supplemented with undertakings to support their contention that their investment represents a net benefit to Canada. The minister then carefully considers the application in light of the net benefit factors I have just described.
It is worth recalling that the present investment review framework under the ICA has evolved over time, as Canada has responded to changing sources of foreign investment in the world economy.
The Foreign Investment Review Act was passed by Parliament in 1973 and its broad scope reflected an ambivalence toward the presence of foreign investment in the Canadian economy. In clear recognition of the importance of foreign investment, Parliament replaced the FIRA with the ICA in 1985.
The ICA explicitly welcomed foreign investment by increasing the threshold for review, removing the minister's investigative powers and reducing the time it took to review applications. This has made the process more predictable and more welcoming for business.
Since that time, both the global investment landscape and the policy framework to respond to it have evolved. The capital and technology needed to spur economic growth comes from an increasingly wide group of investors, and it is important for Canada to maintain its attractiveness to a wide range of foreign investment from around the world.
At the same time, our government has been vigilant in ensuring that foreign investment in Canada actually benefits the Canadian economy and hard-working Canadians. To ensure the act remains effective in a globalized world, the government has introduced several targeted reforms to the act to keep Canada's investment review regime up to date in the face of new and evolving economic realities.
First, in 2007, our government introduced guidelines on investments by state-owned enterprises in recognition of the reality that investments by foreign state-owned entities were unique in nature. A policy statement in 2012 provided added clarification to those guidelines.
In 2009, our government introduced national security review provisions into the ICA. We also made changes to increase the threshold for net benefit reviews from $330 million to $1 billion and to adjust the basis for calculating the review threshold from asset value to enterprise value. This change will more accurately capture the value of businesses operating in the modern economy.
Finally, economic action plan 2014 introduced amendments that will, among other things, give government greater flexibility to provide information on key decision points in the national security review process.
The ICA is just part of our broader economic agenda. Indeed, since day one, we have been cutting taxes for job-creating businesses. In the past five years alone, we have delivered tax reductions to businesses totalling more than $60 billion. We have reduced the federal general corporate tax from 22% to 15% and lowered the small business tax rate to 11%. We have also extended the temporary accelerated capital cost allowance for manufacturing and processing machinery and equipment through 2015.
I can tell everyone that Canada now offers the lowest overall tax rate on new business investment in the entire G7. The competitiveness of Canada's business tax system was lauded by KPMG, which concluded that Canada's total business taxes were the lowest in the G7, more than 40% lower than the United States. Importantly, where the ICA is concerned, growth and foreign direct investment in Canada has been the strongest among the G7 countries over the course of this recovery.
Canada's economic success is due in no small measure to a framework our government has put into place. This framework improves access to capital, technology and global expertise. With that framework in place, we are confident Canada will continue to attract foreign investment that will benefit all Canadians.