Debates of Nov. 6th, 2023

National Security Review of Investments Modernization Act

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

There are 20 members, including me, without the ones who are coming in.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Madam Speaker, in studying the bill before us, the Liberals had an opportunity to reflect what actually is going on in the world rather than just putting in a fairly basic bill that just focused on time rather than on national security. I am wondering whether the member could comment on the lost opportunities the government had in introducing the bill without any substance.

[Rachael Thomas, Conservative, Lethbridge, AB]

Madam Speaker, there was an opportunity to look at the recommendations that came from a subsequent committee and really take them to heart. A tremendous amount of study, time and energy went into those recommendations.

Further to that, my hon. colleagues at the committee brought forward numerous amendments. I know for certain that 10 of them were excellent, but they were rejected. They could have strengthened the bill. All those amendments were based on substantiated evidence that was brought forward by experts. Why would the government reject them? Why would it not want to make the bill the best it can be?

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, this is a great opportunity to talk about foreign direct investment in Canada, why it is important and why this legislation is before us.

Our viewers might ask why foreign investment is so important to Canada. There are many reasons that we should be looking to attract foreign investment into our country. Foreign investment provides Canada with the capital it needs to develop its full potential and, yes, that includes our abundant natural resources, such as oil and gas. Foreign investment in Canada is also a source of innovation, allowing Canada to benefit from evolving technologies. As one of the most educated countries in the world, we also use that foreign investment in innovation to build our own technological capacity.

Intellectual property will drive our future prosperity. We had better ensure that this advantage is not squandered by failing to properly review foreign investments.

It goes without saying that foreign investment creates many jobs across our country. Invariably, when a foreign investor makes its investment in Canada, this creates new job opportunities for Canadians. Related to that is the fact that jobs created by foreign investment generate higher wages. At a time when the worst affordability crisis of a generation is raging, when many families are struggling to make ends meet and pay for groceries, schooling, gas and rent, it is important that the jobs that Canadians have available to them also have decent paycheques attached. Foreign direct investment also drives increased productivity, leading to greater prosperity for our country. When foreign investors commit to building our economy, they also increase our tax base, which of course allows governments at all levels to deliver the services that Canadians expect.

Unfortunately, for quite a number of years now, especially since the current Liberal government came to power, Canada's foreign direct investment performance has lagged far behind that of many of its OECD competitors. What I mean by this is that there is more investment flowing out of Canada and being invested in foreign jurisdictions than there is foreign investment flowing into Canada. We actually have a very significant deficit. Why has this happened?

There are many reasons. I will not go into them all, but I will begin with this: Canada is suffering from regulatory gridlock. In other words, regulatory and approval processes at all levels of government are so complex and reflect such an overreach that nobody wants to invest in Canada anymore. We have labour force challenges, heightened uncertainty, deteriorating public finances and increasingly unmanageable debt loads.

By the way, our system is not tax competitive. For years, we have been talking about tax reform, yet over the last eight years, no reform has materialized under the current Liberal government. As a result, it has become too expensive to do business in Canada.

Most recently, the Liberal government decided that not only would it maintain a punishing carbon tax on everything, but it would also quadruple the carbon tax on the necessities of life, the things that Canadians need to survive, such as home heating, natural gas and groceries. Prices have skyrocketed as the Prime Minister ratchets up his carbon tax. Putting gas in the car is becoming prohibitively expensive for many families. He plans to quadruple the carbon tax on fuel for our cars as well.

To make matters worse, while the Prime Minister recently announced that he would temporarily suspend the carbon tax on home heating oil for 3% of Canadians, the remaining 97% of Canadians will receive absolutely no break from the carbon tax on their own home heating costs. I thought he once said, “A Canadian is a Canadian is a Canadian”. It is another vacuous promise from a failed Prime Minister who seeks to divide Canadians and pit them against one another.

The bottom line is this: The world no longer sees Canada as a great place to invest. It is the government's policies, grounded in an ideology that disregards the importance of making Canada a welcome place for foreigners to invest, that is the basis of these problems. We have to get foreign direct investment into Canada right, because it can raise our standard of living and give Canadians, especially young Canadians, the hope that they can live out the Canadian dream.

However, not all investments are necessarily in Canada's best interests. There are benevolent investments that benefit Canada's economy, and then there are investments that are being made by malevolent actors around the world who simply want to take advantage of Canada. As we consider which investments fall into each of these two categories, it is absolutely critical that we make the determination that we are going to focus on Canada's net benefit, on defending our sovereignty and protecting our national security. That is why we are discussing this legislation today.

Bill C-34 simply attempts to update the Investment Canada Act, an act that is quite a number of years old now, but it has not kept up with the changing conditions on the ground, in a rapidly evolving global environment. I would mention that, after eight years, the government has been unable to put in place the kinds of policies and regulations that would actually protect Canadians against their key industries and companies being bought out.

I will give an example. Hytera and its associated company Sinclair Technologies have been charged with 21 counts of espionage in the United States. In fact, President Biden has banned the company from doing business in the U.S. However, in 2017, the Liberal industry minister, Navdeep Bains, refused to conduct a full national security review on the sale of a B.C.-based telecoms company, Norsat International to China-based Hytera, which is banned from doing business in the United States. It was here in Canada buying up one of our companies.

The RCMP awarded a contract to Hytera to supply sensitive hardware for its communications systems. The Canada Border Services Agency has also been using communications technology from Hytera. Members may recall that a few years ago, the industry minister set up some rules about making sure that key Canadian companies, especially within the critical minerals space, would not be bought up by foreign hostile actors, yet that is exactly what happened.

In 2022, the Liberal government fast-tracked the takeover of Canadian lithium mining company Neo Lithium by Chinese state-owned Zijin Mining without a national security review. Every single citizen in China, every single company, whether a state-owned enterprise or otherwise, has a responsibility to report to the government any information it asks for with respect to the business that they carry on.

We want to make sure that this bill does what it is supposed to do. Briefly, this bill would streamline the minister's ability to investigate national security reviews of these foreign investments. It would strengthen penalties for failure to comply with the Investment Canada Act's review provisions. It would create a new power to generate a list of sensitive industries. It would improve coordination with our international partners. It would also vest power to the minister, rather than allowing cabinet to make these kinds of decisions in the first instance.

Would it not be better, instead of having two eyes on this kind of transaction, to have all the eyes of cabinet focusing on whether an investment is in Canada's net benefit or whether it represents a risk to our national security? The bottom line is we tried to get some amendments. To their credit, some members of the committee agreed with us and we actually got four critical amendments passed. However, there were seven other amendments we tried to make, some of which were contained in a unanimous report from the industry committee, and guess what? The Liberals on the committee voted them down.

We can do better, but this is a start.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I heard the member reference that some countries are taking advantage of Canada. When he said that, I could not help but reflect on when I heard the member for Cumberland—Colchester suggest that Canada was taking advantage of Ukraine. Does the member believe that Canada is taking advantage of Ukraine?

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, we are talking about the Investment Canada Act. We are not talking about the Canada-Ukraine free trade agreement.

I will say this, to complete my thoughts. The Investment Canada Act is there to protect Canadians against investments that are not in Canada's national interests. This act would be a small step forward—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

We are going to other questions and comments.

The hon. member for South Shore—St. Margarets.

[Rick Perkins, Conservative, South Shore—St. Margarets, NS]

Madam Speaker, I will do something unusual and ask a question about the bill, unlike the Liberal members, who seem to want to talk about everything but the bill.

The bill is about returning cabinet decision-making to the Investment Canada Act process. I know the hon. member is a former international trade minister and knows more than probably anyone on the government side in the House about cabinet decision-making and the role and importance of it. Without it, we have had poor decisions by the now VP for Rogers, former member Navdeep Bains of the government, who basically said that anything China wanted to buy China could have without a national security review.

I wonder if the member would enlighten the House as to the proper way a cabinet decision-making process should be when a hostile state like China is trying to acquire the assets of our country.

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, that kind of decision takes a lot of thought. It takes a lot of due diligence. It is much better to have cabinet review, through a cabinet process, a national security-related matter or an investment when we are trying to determine what the net benefit to Canada is.

In cabinet, there may be 15, 20 or 25 people around the table. Everyone is asked to review all of the relevant documentation, and at the end of the day, they are able to discern whether something is in Canada's national interests. If we leave that decision with one minister, there is a huge risk that the minister will be co-opted by special interests within our country or outside of our country and a decision will be made that is contrary to our national interests.

[Heath MacDonald, Liberal, Malpeque, PE]

Madam Speaker, I want to go back a little to when the hon. member was a minister. The deal signed at that time was the Nexen deal. It was signed by selling off Nexen to a Chinese national offshore company for over $15 billion. The deal was signed in Russia in secret by former prime minister Stephen Harper. Does the member have any comments on that?

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, at least this question relates, although obliquely, to the Investment Canada Act.

With respect to the Nexen transaction, prior to that point in time, Canada had absolutely no rules about how state-owned enterprises could invest in Canada or if they even should be investing in Canada. When that transaction came forward and cabinet had to review it, we said to hold it because with this transaction, there were no rules for us to be guided by. Therefore, Stephen Harper at that time articulated a clear set of rules for when countries like China or state-owned enterprises from countries like China, Russia and Iran, which are hostile actors, want to invest in Canada. We established the first set of rules for that, and of course, that—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The hon. member for Rivière-du-Nord.

[Rhéal Fortin, Bloc, Rivière-du-Nord, QC]

Madam Speaker, Bill C‑34 will increase oversight and improve our international reputation. I wonder how much that might help us with our main financial partner, the United States, if we pass Bill C‑34 in its current form.

What does my colleague think of that?

[Ed Fast, Conservative, Abbotsford, BC]

Madam Speaker, as we know, this bill would not measurably impact investments coming from the United States, because we have special carve-outs for our free trade partners.

Having said that, it is important that we do have an act like that and that, from time to time, we review it—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

Resuming debate, the hon. member for Selkirk—Interlake—Eastman.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, it is my pleasure to rise and close off debate today on Bill C-34, the amendments to the Investment Canada Act.

I just want to say that, earlier today, I was very disappointed that, when we had our vote on the carbon tax, on taking it off constituents in my riding who have to pay the carbon tax on home heating, as we were asking for the same type of consideration for Manitoba as was given by the Liberal government to those in Atlantic Canada, the government would not extend those considerations to people across the Prairies.

After eight long years of this government, Canadians from coast to coast to coast have had enough of this Prime Minister and his punitive carbon tax that continues to penalize Canadians, especially those low-income Canadians who are seeing everything up go in value. The cost of inflation is eating away at their paycheques. Their buying power in the grocery store, as well as in the housing market, continues to erode.

I do have some concerns with Bill C-34, which I had hoped would have been addressed through amendments that were brought forward by the Conservatives.

I just have to thank my colleague, the shadow minister of investment and industry, for the work that he has done on Bill C-34 in trying to strengthen it and make it better. It has been 14 long years since this bill was updated, eight of them under this Liberal government.

I think all of us have concerns that the government has not taken issues around foreign investment and how it impacts things like national security very seriously. We know that it has not protected our critical infrastructure, which is at risk here if it falls under the control of foreign entities, especially those that are owned and controlled by their states.

What we witnessed, right across this country, is that critical minerals continue to get bought by foreign entities and that those state-controlled operations, first and foremost, are beholden to the despots and dictators who control their countries, rather than produce those critical minerals for our supply chains here.

Speaking of supply chains, this foreign investment act fails to address our economic sovereignty and how that relates to our overall national defence.

If one looks at making sure that supply chains are protected, although Canada is a smaller economy compared to our allies, we still need to make sure that we are getting critical supplies to build everything within our—

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

I apologize but the hon. member's phone is either vibrating or making some sort of sound.

The hon. member for Selkirk—Interlake—Eastman.

[James Bezan, Conservative, Selkirk—Interlake—Eastman, MB]

Madam Speaker, it was foreign interference. We are talking about national security and, of course, we know that we have had foreign interference in our democratic institutions right here. It all ties in together very well.

I will continue with how critical supply chains are. Although we may not be able to produce all things right here in Canada, we should be producing them at least within our Five Eyes, where we know there are the same security controls and concerns that we have here in Canada. Thus, we can ensure that we have control of things that are important for building defence infrastructure and national security infrastructure, as well as providing security and public safety for Canadians at large. Again, we fail to see that recognized to any great degree.

All we have to do is look at the recent record of the Liberal government when it comes to foreign companies owning businesses here that have engaged in espionage and continue to raise major security issues. We can also look at what is happening in our universities and what happened at the Winnipeg labs, where the government allowed and gave work visas to people who were doing research on behalf of the People's Liberation Army. That is the Communist Party of China's military organization. Scientists from the PLA were put into our universities and the Winnipeg labs; they got information on all sorts of intel and then were able to take that back to mainland China.

We have already talked about Sinclair Technologies, which provides a lot of the security screening equipment that we see at our embassies and that is used by the RCMP, the Canada Border Services Agency and our airports. That company was bought up by Hytera, but the government continued to award contracts to Sinclair Technologies, which was now under the control of Beijing.

No one can forget about Huawei and the way the Liberals dithered, delayed and dragged their feet, kicking and screaming, until they finally banned Huawei from our 5G network here in Canada. This was after the United States raised red flags and banned it from its 5G network, as well as after Australia, New Zealand and the United Kingdom did so. Our Five Eyes partners stepped up and said, “We are banning Huawei, why aren't you?” However, there was no good answer coming from the government. It took another 24 months before finally making the decision to ban Huawei, which had incredible switches and back doors linking intel right into the PRC at its headquarters in Beijing.

We could also talk about TikTok. It is an app that many of our young Canadians are familiar with, and it is used around the world. We banned it from all our devices here in Parliament and in the Government of Canada. However, I know that there is great concern being raised in the United States about this technology, which is still being used by our millennials and by generation X. We know that the PRC's socialist ideology has been instilled in and permeated through TikTok, and it has been promoted and used more and more. We have to take these things seriously, because these state-controlled enterprises are not so much worried about the consumer. They are definitely not worried about our democracy right here in Canada or our allies; they are doing everything they can to undermine it.

I now want to talk about something that is very important to us, which is our critical minerals. We have large deposits of lithium across this country. We have already talked about Neo Lithium, which is now owned by Zijin Mining out of Beijing, and it is hoping to develop those mineral resources here and take them back to China rather than developing them in Canada.

We have Sinomine here, which got access to three large lithium deposits in northwestern Ontario. I will give credit, because the government actually made it divest those resources and sell them back into Canadian control. However, the government still lets Sinomine operate in Canada. If the government is so concerned about Sinomine controlling those lithium deposits in Ontario, why was it not concerned about Sinomine, just in 2019, buying Tanco mines in Manitoba? It also has a mine just outside my riding, headquartered in my riding in Lac du Bonnet, that has lithium and 65% of the world's cesium. It also produces tantalum, which is used in electronics and warheads on nuclear missiles.

All of the ore that they are producing right now in Manitoba is not refined in Manitoba. They ship it out raw, back to mainland China, and none of it ever comes back to Canada. This is something very concerning. The government turned a blind eye in 2019. Rather than looking at lithium and the Tanco mine, which, at that point in time, was U.S.-owned, and saying it wanted to make sure those critical minerals stay within Canadian or at least North American ownership, it allowed a Chinese company to come in here, buy it up and take all those resources straight back to China.

That undermines our overall goal. The Government of Canada has a goal to produce more electric vehicle batteries, and the lithium being produced right now in Canada is actually all going to China, undermining our ability to sustain the critical supply line to the EV battery plants that are being built in Ontario.

I just want to say that we do have a lack of coordination with the government, between its foreign investment plan and its Special Economic Measures Act, SEMA, which sanctions those who are responsible for gross human rights violations and for destabilizing peace and security in the world. We have things that have happened here in Canada. I will use Roman Abramovich as an example. He owned Evraz, the steel mills in western Canada. Again, we have not seen those holdings liquidated and provided to support Ukraine's war effort against the Russian invaders. We know there are Russian hawks out there who own things like Buhler Industries, which also sells out of Russia. Konstantin Babkin, one of the top people there, has been out there supporting Russia and denouncing Ukraine, yet they are still allowed to benefit from Canada's economy and our strong manufacturing industry.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

It being 6:57 p.m., pursuant to order made earlier today, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the report stage of the bill now before the House.

The question is on Motion No. 1. A vote on this motion also applies to Motion No. 2.

Shall I dispense?

[Some hon. members]

No.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

[Chair read text of motion to House]

If a member participating in person wishes that the motion be carried or carried on division, or if a member of a recognized party participating in person wishes to request a recorded division, I would invite them to rise and indicate it to the Chair.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, I would ask for a recorded vote.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The recorded division on Motion No. 1 stands deferred.

The recorded division will also apply to Motion No. 2.

The question is on Motion No. 3.

If a member of a recognized party present in the House wishes that the motion be carried or carried on division, or wishes to request a recorded division, I invite them to rise and indicate it to the Chair.

[Mark Gerretsen, Liberal, Kingston and the Islands, ON]

Madam Speaker, we request a recorded division.

[The Assistant Deputy Speaker (Mrs. Alexandra Mendès), Liberal, Alexandra Mendes]

The recorded division on Motion No. 3 stands deferred.

The House would normally proceed with the deferred recorded division on the report stage of the bill. However, pursuant to Standing Order 45, the recorded divisions stand deferred until Tuesday, November 7, at the expiry of the time provided for Oral Questions.