Mr. Speaker, it is a privilege to be here this afternoon to address this extremely important opposition day motion put forward by the NDP.
It is an important motion for three reasons. First, it calls for public consultations on a specific deal, the Nexen-CNOOC deal, which is under negotiation. Second, it calls for public hearings into foreign ownership in the Canadian energy sector at large. Third, it calls on Canada and the government to clarify the net benefit test in the Investment Canada Act before a decision is made with respect to this specific transaction.
For the record, the Liberal Party will be supporting this motion, but let us just step back for a few minutes and look at how we got to where we are today.
This proposed acquisition has been in the works for a long time. It follows hard on the heels of the proposed potash deal, which raised so many similar concerns and issues. Both Nexen and CNOOC, as parties to this proposed deal, played by the existing rules, even though they knew that changes to the definition of net benefit under the Investment Canada Act were supposedly forthcoming.
In fact, the Prime Minister stood in his place with a number of front-line cabinet ministers two years ago and promised that a major review of what constituted a net benefit to Canada would be undertaken. It was never done, even in the full knowledge that this and other deals were in full negotiation.
My colleague, the member for Halifax West, our Liberal industry critic, brought a motion to the industry committee almost nine months ago. Let me read it. It is simple and it is direct. He proposed that the Standing Committee on Industry, Science and Technology undertake a study of the Investment Canada Act and present a report to the House.
It turns out the committee rightly decided to pursue the study, but we do not really know what was said. Once again, the deliberations were held in camera, behind closed doors. This is a neat little trick pulled by the Conservatives across all committees to censor access to information on a very regular basis.
Since then, nothing. Did the government recall the committee over the summer months to take a crack at the study? No. Did it produce a comparative study of what other countries who have tackled these issues have done? No. Did it identify and make public the salient questions to be addressed beyond the six factors to be taken into account under section 20 of the Investment Canada Act? Absolutely not; so here we are.
Shareholders and the boards of directors of both companies involved have approved the deal. They believe their interests are best served. That is fine. That is as it should be in the free market. However, what we are talking about is Canadian interests, not shareholder interests exclusively.
It is at once the irresponsibility and the incompetence of the Conservative regime that has led us to this point. It is irresponsible and incompetent in the fact that the net benefit test has not been dealt with. It is irresponsible and incompetent in the fact that it has been dispatching the Prime Minister and ministers all over the world to drum up investments from countries such as China in full knowledge that proposed deals like the Nexen one, or any of the several other deals now being worked on in the oil patch, would be highly controversial. It is irresponsible and incompetent in its refusal to answer the questions that Liberals have raised for weeks, either because the Conservatives are afraid to admit they do not have the answers or they are afraid to tell Canadians the truth.
The truth is that Canadians do not have confidence that our interests are being addressed and protected. They have serious concerns and are eager to learn more about this specific deal, its ramifications and its long-term effects on one of our most important natural resource sectors.
The Conservative government promised to revisit the concept of “net benefit to Canada” in the context of foreign takeovers after the rejection of the offer for PotashCorp in October 2010. Because of its inaction, Canada is now facing a wave of foreign takeovers and the rules have not been clarified.
We understand that it is necessary for the government to retain some flexibility to exercise its discretion, since no two deals are identical, but we also believe that foreign takeovers must be done transparently and that Canadians must be informed about the guarantees involved and the reasons a transaction is deemed a net benefit to Canadians.
Let us be very clear: the Liberals are in favour of foreign investment but, since 2006—and especially since 2010—we have been calling for more transparency in foreign takeovers.
The government is not able to provide this transparency and not able to dispel the impression that the process is based on purely political considerations. For the good of our economy and future foreign investments, the rules must be clear.
As I said, the legislation must provide some degree of flexibility because no two deals are the same. Very important questions loom large and need to be answered in order for Canadians to understand what guarantees might be given and why a transaction is deemed of net benefit to Canada.
First, because we have no national energy strategy in this country, as called for by Alberta's premier and by our party for over six years, where does this and other transactions fit into our energy future? Where does it fit into our climate future?
There is no doubt that case after case with respect to our approach to energy will continue to surface, from Keystone to the northern gateway pipeline, another Conservative fiasco according to Jim Prentice, and now this Nexen deal. The Conservatives are lurching from crisis to crisis instead of defining a national energy strategy that includes changing the Investment Canada Act.
I will take a moment to answer the Prime Minister's question when he responded to Premier Redford by saying that when it came to a national energy strategy he had “no idea what she was talking about”. I will enlighten the Prime Minister and let him know what we are talking about.
This is about building on the early and tentative work by provincial and federal ministers in full respect of provincial jurisdiction. It would encompass the following key elements: regulatory reform; energy efficiency; energy information; markets; international trade; smart grid technology; reliability of our electricity system; building codes; building standards; and transportation efficiency.
Furthermore, we should be conducting a full and transparent analysis of federal and provincial programs and fiscal incentives and disincentives applicable specifically to the energy sector in all of its forms: fossil fuels, wind, solar, geothermal, biofuels and nuclear, with a view to facilitating Canada's transition to a low carbon future. That is what the race is all about in the global marketplace.
However, more questions need to be raised. In the energy sector, what should the maximum ownership limits be set at, 49% or no limits? If a company commits to keeping its head office in Canada, what if it does not? Similarly, CNOOC is committing to keep all 3,000 Nexen jobs and its current management team. What if it does not? How are these commitments enforceable? When shall we demand that Canadians be on the board of directors and how many? What about Canadians on the boards of the foreign companies that are targeting Canadian companies?
When we hear about the national security interests raised recently by CSIS, when do these trump a potential deal? What exactly are national security interests? Are they related to information technology? Are they related to trade secrets? Are they related to intellectual property and patents? These things need to be better defined.
How do we treat state owned enterprises versus privately held or publicly traded companies? Should we be factoring in human rights considerations in the country from whence the acquiring company is coming?
What if Canadians have invested in a Canadian enterprise through government support? This might be from direct financial support in the form of programming assistance or it might be fiscal assistance in, for example, the writing off of assets over a shorter period of time but that is an investment made by the Canadian taxpayer in a Canadian company. However, if a company has been supported by Canadian taxpayers in one of these two forms, how should we see that investment in terms of the Canadian people? Should the Canadian taxpayers be indemnified? Should we be asking that Canadian taxpayers get some of their money back?
Another question that this transaction raises, which ought to have been addressed in committee months if not years ago by the government working with all parties, is whether foreign ownership limits by companies or sectors be brought in.
Some estimates show that today in Canada two-thirds of oil sands production is already owned by foreign companies based on shareholders. Should that be a factor? Should that be allowed to continue? Is two-thirds too high, just right or too low? None of this has been subjected to what I would call the light of evidence and analysis in a good working place like, for example, the industry committee.
Another important question that Canadians are asking about this transaction is whether can Canadians invest in the country where the buyer comes from? If not, what should we be looking to ask for? What should we be looking to leverage from that country? For example, some have said in this case that Canada ought to be demanding better access to the financial services sector so that Canadian banks, for example, can expand their operations in what is clearly a huge market.
I have another question. Will there be full compliance with Canadian labour and environmental laws? What conditions should be met with respect to enhancing community and social commitments?
It is clear that the issue of enforceability weaves its way through each and every one of those questions. Those questions are fundamental to our jobs, innovation, technologies, patents and intellectual property. They are fundamental to the deployment of Canadian capital, to growing and maintaining our expertise in our trades, in our management and, yes, even in our ownership. Those questions are also fundamental to whether Canada's companies will compete in global markets. However, all those questions have not seen the light of day despite the promise made by the government.
Now we find ourselves in a situation where Canada is being squeezed. Actually, the Prime Minister and his ministers are being squeezed because they have gone all over the world telling people that we are open for business. They have said, “come one, come all, everything is for sale at the highest price”. However, we now face a situation where it is going into the secrecy of cabinet, where the net benefit test is not working as it is presently construed under the act, and we are in a situation now where Canada is vulnerable.
I would suggest that all parties come together in the industry committee, support my colleague's motion for a major study on this question and come back with enlightened information for all parliamentarians to learn from so that we can set the right net benefit test for Canadians going forward.
