Madam Speaker, it is indeed an honour for me to speak to this motion this morning. I thank the member for Carleton for recognizing the number of years I have been associated with the industry committee, and I am honoured to present some of the findings in this particular report.
Few things are as important to my constituents and to all Canadians as how the government supports workers, families and businesses in these unprecedented times, and few things are as important as ensuring a strong and prosperous recovery.
Canada's Conservatives have worked tirelessly over the last year to address and fix many of the shortcomings of the ill-designed and flawed assistance programs introduced by the Liberal government. We stood up for Canadian workers who tragically lost their jobs due to the Liberal government's slow and inadequate response to the pandemic. We stood up for businesses that have struggled to stay afloat during the pandemic and will continue to do so over the coming months.
This is part of what the report from the Standing Committee on Industry, Science and Technology is all about. The report's recommendations will help to ensure that Canadian businesses remain drivers of economic growth for all Canadian workers. They will help to ensure that our most important intellectual assets stay in Canadian hands.
Over the last year, many countries around the world have taken concrete measures to prevent the predatory acquisition of businesses within their borders by actors connected with authoritarian regimes or by state-owned enterprises. The countries that have acted are pro-investment countries, such as Australia, India, Germany and those of the European Union. They recognize that times of great economic difficulties for businesses leaves them vulnerable to predatory takeovers or acquisitions, which can jeopardize ownership of intellectual property and put jobs at risk. Canadian businesses are equally vulnerable, which is what the standing committee heard in testimony from many expert witnesses, but like everything else, the response from the Liberal government has been totally inadequate.
Shortly before the standing committee began its study, the Canadian Security Intelligence Service highlighted the risks posed by foreign takeovers in today's environment in a report. An article explains:
Specifically, CSIS warned that Canada's “economic wealth, open business and scientific environments, and advanced workforce and infrastructure” posed an enticing target to foreign investors.
The agency said that while most foreign investors are not hostile, those [investments] from state-owned enterprises and firms with close ties to governments or intelligence services need to be weighed very carefully.
The Liberal government's response to these very real concerns was to introduce a weak-kneed, vague policy statement last April that suggests the minister could request additional information or extend the timelines for the review of acquisitions under the Investment Canada Act's national security provisions. Last month, and in response to the standing committee's report, the Liberal government issued equally weak updated guidelines on the national security review of investments, which suggest, for example, that investments by state-owned or state-influenced investors will be subject to enhanced scrutiny regardless of the investment value.
As hon. members know, there currently is no investment value threshold for the review of acquisitions under the ICA's national security review provisions. Such reviews are conducted entirely at the discretion of the minister and with no requirements for consultations with security experts such as CSIS. Rather than strengthening the Investment Canada Act itself, the Liberal government's response to protecting Canadian interests in the current pandemic has been to engage in more smoke-and-mirrors excuses that accomplish nothing.
Over the course of its study on strengthening the ICA, the standing committee heard testimony from several expert witnesses about the need to act decisively. For example, the committee heard testimony from Dr. Christopher Balding of Fulbright University in Vietnam. He said that Chinese state-owned enterprises in particular target assets, whether in natural resources or technology, that are prioritized by political leaders rather than by market forces. How did the Liberal government respond? It responded by issuing vague and meaningless guidelines and policy directives.
During testimony at committee, Dr. Charles Burton from the Macdonald-Laurier Institute stated that Canada should consider a complete moratorium on all investments from authoritarian regime state-owned enterprises pending the establishment of clearer criteria for these types of investments. Dr. Burton also noted that we need more awareness of where Canadian interests lie and more clarity on the idea of net benefit under the Investment Canada Act.
Dr. Burton also said, “I'd like to see a more open and transparent process that would give us more awareness of the basis for government decision-making.... The Canadian people should be more aware of what's going on and how our government is responding to it.” How did the Liberal government respond? It responded by issuing weak closed-door guidelines and policy directives without any consultation at all.
During its review, the standing committee also heard testimony from Jim Balsillie, chair of the Council of Canadian Innovators. Mr. Balsillie noted that the Investment Canada Act is a critical regulatory tool for ensuring Canada's prosperity and security, but he also noted that it does not reflect the contemporary economy, where the most valuable national, economic and security assets are intellectual property and data. He suggests that Canada needs to go beyond reviewing acquisitions by SOEs of authoritarian countries because, if the assets are critical to Canada's prosperity, security and sovereignty, then we need to ensure they remain in our control, regardless of the foreign counterparty. How did the government respond? Quite simply, it did not.
The recommendations in the standing committee report are balanced, appropriate and timely. They are based on the testimony we heard from experts about the need to protect our interests while also continuing to attract foreign investment to Canada. In line with the testimony we heard, the standing committee report recommends reducing the threshold under the ICA's net benefit test to zero dollars from the current level of $428 million if the acquiring entity is a state-owned enterprise and that all thresholds be reviewed on an annual basis. It recommends that the government should take steps to improve the treatment of intangible assets under the net benefit review process of the ICA, and it also recommends that the government should implement legal measures necessary to block any transaction that would undermine Canada's national security by transferring a sensitive asset to a non-Canadian entity.
The report recommends that the Government of Canada take steps to protect our strategic economic sectors, such as natural resources, agri-food and the pharmaceutical industry. The committee also recommends that the Government of Canada immediately introduce legislation amending the Investment Canada Act to compel the minister to consult with the Canadian Security Intelligence Service, the Royal Canadian Mounted Police and the Communications Security Establishment in the national security process. Strangely enough, there is currently no provision or firm requirements within the act to do that, leaving everything up to the political discretion of the minister, and we all know the government's track record on that front.
There is no question that foreign investment helps drive economic growth and creates jobs. Interestingly enough, while pro-investment countries such as Ireland saw foreign investment double between 2015 and 2019, foreign investment actually shrunk by half a percentage point over the same period under the Liberal government in Canada. Conservatives have always understood the benefits of foreign investment and have taken steps to promote more. That does not mean that we should abandon any notion of protecting Canadian interests, as the Liberal government seems so intent on doing. It means that we need to remain open, but also vigilant.
I therefore urge all hon. members to support the motion before us today so that we can move forward to strengthen and modernize the Investment Canada Act to reflect both our present realities, as well as the 21st century economy.
