Geoff Regan

[Business of Supply, December 10th, 2012]

Mr. Speaker, I congratulate my hon. colleague on her speech.

Today, the Minister of Natural Resources said that the Nexen agreement would not have been approved by the government under the new rules.

This is what I find hard to understand: last Friday, there was a net benefit, a very vague, broad test that allows the government to do what it wants; but the following Monday, the Conservatives have come up with new rules and assigned a new definition to “net benefit”.

If it is not a net benefit, what is it?

[Business of Supply, December 10th, 2012]

Mr. Speaker, in view of the fact that the Minister of Natural Resources has said that the Nexen deal, which was approved last Friday night, would not have been approved under the new guidelines, how can my colleague say that it is a net benefit?

I also want to ask him why, in the year and a half or more since his own party was so keen to study the Investment Canada Act, it has shown so little interest in doing so?

[Petitions, December 10th, 2012]

Mr. Speaker, I have a petition from residents of Nova Scotia who note that nearly 1.5 million households, almost 13% of all Canadian households, are in core housing need.

The petitioners therefore call upon the House of Commons to pass Bill C-400 and give Canada a national housing strategy.

[Business of Supply, December 10th, 2012]

Mr. Speaker, if the industry committee had decided to accept the minister's request and come to the point of studying the topic that the minister raised in April of 2011 just before the election, I think, as quickly as I would have liked, perhaps in a month or two, it would have been far sooner than it has done since I have been proposing for months and months that the committee do. The member knows that at that point there just happened to be another topic that was the top priority.

However, the member is saying that what the minister proposed then was not any good a month later, after the election, and the Conservatives have been opposed to it since they had a majority, and they would not study it. Even though the minister had suggested it and brought it forward at a time that was convenient for him, a month later, and ever since, over the last year and a half, it has not been convenient for the Conservatives to study it. That is irresponsibility, not transparency.

[Business of Supply, December 10th, 2012]

Mr. Speaker, I am not sure I have time to answer all of those questions. Usually one gets a long list from the opposition, but my hon. friend has made it tough on me with a good list. However, I think he has raised some very good questions. If I do not have a chance to answer all of his questions, I hope that others will try.

I am particularly anxious to hear from the Conservatives about reciprocity. So far, I certainly have not heard about any reciprocity or any openness we are going to receive for Canadian investors and companies that are active in China. Let us hope that it will produce something positive, but we certainly have not heard anything. It does seem to be on the fly.

Again, the fact is that the Conservatives have only picked this one sector as their strategic sector, even though they have previously identified other areas as strategic. In fact, I bet if we look at various announcements and speeches that Conservative ministers have given over the years we would find the word “strategic” applied to a whole bunch of sectors. I cannot imagine that we would not. Yet, now they are saying there is only one sector that is strategically important enough to have the protection we are talking about here.

Are the oil sands important? Absolutely. Are they the only important sector of our economy? God forbid that should be the case.

[Business of Supply, December 10th, 2012]

Mr. Speaker, my hon. colleague's question reminds me of an article I read in law school on the rule of law. As the member said, it is about following the rules and not making them up as one goes along. Of course, the rule of law also means that it applies equally to everyone, which is a very important principle. In many countries around the world it is a provision that is needed.

However, one needs to ensure that there is enforcement of the law and that the same rules are enforced for everybody. In this case, we do not know how the rules will be enforced.

This is a concern, as there has been very little from the Conservative government in the way of enforcement of provisions on past foreign acquisitions. We do not even know whether the Conservatives' new plan that they have brought forward to have monetary penalties for non-compliance would be applied in this case. The Prime Minister certainly did not say so.

How is the government going to enforce the requirements here? How is it going to enforce the employment promises made by CNOOC, and so forth?

[Business of Supply, December 10th, 2012]

Mr. Speaker, the parliamentary secretary gave a list of questions but I did not hear much in the way of answers to my questions. I hope that others will provide them in due course.

We have expressed concern throughout this process about the fact that we are looking at state-owned enterprises investing in Canada. I talked previously about the concerns I have about Chinese state-owned enterprises being involved in our telecommunications sector, which is particularly disturbing and concerning when we consider the importance of that in terms of what valuable and discreet or secret information goes across the Internet throughout Canada or across phone lines and other lines of communication. To have a state-owned enterprise in what is a totalitarian state so engaged in that process is disturbing. It is not clear to me that the government has taken the required measures to overcome those concerns.

What I find contradictory though is that my colleague says the oil sands is the only asset on this scale that is worthy of being protected as strategic. That does not explain why the government said no to the potash deal on the basis that it was a strategic sector. How can the member say on the one hand that there are no other strategic sectors, yet on the other hand say potash was? It does not make any sense to me.

[Business of Supply, December 10th, 2012]

It is a bit of a contradiction.

Mr. Speaker, as I noted earlier, following the 2010 PotashCorp decision, we called on the government to ensure more transparency with regard to the decision-making process surrounding foreign acquisitions. In fact, the Prime Minister committed to doing that. Our request included asking for greater detail and defining of the net benefit test, and for a more accountable and transparent review process so that Canadians could know what was being negotiated. We have also asked to increase the clarity around the role of the affected province or provinces, and to provide a mechanism for their input.

As far as we can tell, because we have not heard otherwise, the government had no consultation with the provinces. Fortunately Premier Redford came out publicly in a letter to talk about what her view was, but we never heard if the government went to ask her or her government's views and thoughts on how to deal with this situation. With respect to conditions that can be attached to a transaction, we have said that these must be completely transparent and easily enforceable.

Finally, we have also introduced the notion of reciprocity. We are not the only ones to do so. I hear many commentators talking about the importance of that, about reciprocity of access to the country of the purchaser. There is the question about whether countries buying from Canada have to give the exact same access in their own country, or whether it should be access that has equal value and equal impact.

It seems to me that what we are looking for is something that would provide a benefit to Canada that is equal to what another country is getting by investing here. I do not think that it needs to be exactly the same kind of access, as long as we are getting something that is of an equivalent worth, that there is a quid pro quo in the transaction. There is an awful lot of agreement when that happens. For instance, let us hope that the NHL players and the owners find some way to find, maybe not the exact exchange of things in their agreement when it comes, but let us hope they will be flexible enough to find one very soon.

Liberals believe that Canadians deserve to know as much about the terms and conditions of these transactions as possible. Without that, how can Canadians properly evaluate these transactions or determine the impact on our economy? Is it not the right of Canadians to do that, to make that evaluation, to assess for themselves? The government seems to think that we should leave it to the Conservatives and let them handle it quietly and in secret. It thinks that Canadians really ought not to have the details so that they can make their own judgments. That is not a very democratic approach, if I can be forgiven for saying so.

The government has been dragging its feet on clarifying the net benefit test for far too long. This has hurt the Canadian economy and it has hurt foreign investment opportunities. There is a lot of uncertainty out there in the world about where Canada has been standing on this and that probably hurts.

However, I want to agree with my hon. colleague who spoke before me about the fact that we do want to have foreign investment. It is important for our economy. Over the years when the Liberals were in government, I do not recall hearing of any occasion when the Conservatives opposed any of the investments that we approved. On the other hand, nor do I recall hearing of the NDP ever supporting any of the foreign investments that occurred during that time, so that is interesting. I suppose it is partly because of the attitudes. From the Conservatives' point of view all the problems in the world are the fault of government. Governments cause all the problems. With the NDP, government is the solution to all the problems. I do not think either one of those is very accurate, but those are their points of view.

Conservative mismanagement in this process has put thousands of jobs and billions of dollars in investment in jeopardy and that is not acceptable. Because the Conservatives have politicized these files, they have created an environment where companies cannot accurately calculate the risk they are taking when investing in Canada. That is a problem. That is bad for the economy and it is another example of economic mismanagement by the Conservatives. Another example of that would be the fact that they took a $13 billion surplus and put the country in deficit before the recession began. If that is not economic mismanagement, I do not know what is.

We need to know if Canadian companies will have the same level of access to foreign resources and other sectors in foreign countries. What is going to happen? We have not heard a word about that from the Prime Minister or the government. If the Prime Minister is going to make an announcement, he has a responsibility to answer some questions about these details. We have not heard those answers.

If the government approves foreign takeovers without building reciprocity into those deals, it is a missed opportunity that will harm Canadian business and the Canadian economy. As well, the government needs to tell us what enforceability measure it has in place to ensure that CNOOC lives up to its requirements. We are talking about having monetary provisions and so forth. We are not aware of any existing in this case. The government has not told us about that. I have to presume there are none, with no particular consequences if foreign investors do not live up to their requirements. That is problematic.

Since 2006 the Conservatives have refused three foreign acquisitions: MDA, PotashCorp and Progress Energy temporarily, all for different reasons. MDA was for security reasons. Potash was labelled as a strategic asset. Does that mean that maybe it is potash and the oil sands and nothing else? The government is not saying that potash will be, so that is not clear. The Petronas-Progress Energy deal was rejected because it was not a net benefit for Canada. However, it was submitted again and now it has been approved, leaving even less clarity.

Following the 2010 rejection of the PotashCorp acquisition, the government said it would revise the regulations surrounding foreign investment. We have seen very little of any substance in that regard. The only change since then has been the following. The government has now given itself the capacity to release in public the reasons for a refusal. That is something, and I am glad to have it, but it is far from what was promised by the government. The government now has the capacity to request monetary guarantees to ensure the acquirer lives up to its promises. That is a small step and we will take it, but we need a lot more.

While the Conservative government promised to bring more clarity to the process, it has only really made it more complex and raised more questions. What is the exceptional circumstance in which the government will allow further acquisitions in the oil sands by foreign state-owned enterprises? I hope someone on the Conservative side will answer that. Why draw a line at the oil sands and not include other sectors? Why is the government not adding more transparency to the process, which is what Canadians are really asking for?

I hope that some of my colleagues on the Conservative benches will provide in the debate today some of the answers that are sorely lacking so far and that Prime Minister did not provide on Friday. I hope that they have been listening to the list of questions that I have given. They can come over and see me and I can give them some of those questions, but there are lots that have not been answered so far.

[Business of Supply, December 10th, 2012]

Mr. Speaker, I am glad that I am the next speaker, because it gives me a chance to answer the question by my hon. colleague.

Yes, the Liberal Party understands the importance of the oil sands, and my question did not suggest otherwise. In fact, my question asked if the government really believed that it was the only such sector.

Yes, it is an important sector. That is why the Atlantic Liberal caucus was there in the last month, meeting with people there. Of course, there are a lot of Atlantic Canadians working there. It is important to the national economy. I certainly enjoyed my visit and found it very interesting.

We recognize its importance, but is he really suggesting that it is the only important sector of our economy? Is he really suggesting that the government should not have an overall strategy? Is he saying that our economy is so weak in other respects that there is no other sector in the country worthy of this kind of preservation and protection? I find it a very strange policy for him to have said that the only important asset to us happens to be in one province, the province of the Prime Minister. Yes, it is an important asset, but if that is their strategy it simply shows their lack of planning, their lack of an overall strategy and the fact that the Conservatives are giving a knee-jerk reaction to what is before them without much planning.

I am pleased to have the opportunity to speak to this motion. As a matter of fact, the industry committee last spring passed my motion to study the Investment Canada Act and to look at these questions like the net benefit test and how it ought to be reformed. However, the Conservative Party of course has the majority on the committee and defines or controls decisions on what the committee will study, and the committee has not chosen to study this topic. I can let people draw their own conclusions about that, because these meetings at committee on what we are to discuss are all held in camera, at the Conservatives' insistence. I cannot say what happened at those meetings, but I can certainly let people draw their own conclusions about them.

I suspect it is because the Prime Minister's Office prefers that these discussions be held in private, even though the Prime Minister promised back in 2010 to bring more clarity and transparency to the process of foreign investment review.

I very much look forward to the debate to see what members on the government benches think about the need to clarify the net benefit test or to change this process in various ways, and what they think the criteria should be for investments by state-owned enterprises.

As well, I believe the issues of reciprocity and transparency need to be fully explored. I hope there will be some discussion around what sectors of our economy besides the energy sector ought to be protected from the potential for government interference or state-owned enterprises from outside Canada.

Perhaps the most important issue, though, in terms of foreign investment will be how we make sense of the Conservative government's incoherent policy that it seems to be making on the fly.

Liberals believe that foreign investment is necessary and welcome in Canada, but we believe that we have to let the world know that while Canada is open for investment, it is not for sale. We have been clear that the rules surrounding foreign takeovers under the Investment Canada Act must be made transparent and be applied consistently. We do not see that, though, with the government. What we saw announced last Friday is likely to make the process even more arbitrary and even more subjective.

Ever since the failed potash deal, we have been asking the government to clarify the definition of net benefit, and the Conservative Party has failed to do so, despite the Prime Minister's promise otherwise. Considering his promise to provide more clarity and transparency to the review of foreign investment and the whole process itself, let us examine the kinds of questions that the Conservatives' mismanagement of this file have left unanswered.

First, what exactly is the definition of “exceptional circumstances”, those circumstances in which the government would allow more acquisitions in the oil sands by state-owned enterprises. We do not know; that is up in the air. There has been no definition of that. It is a new phrase that the Prime Minister has pulled out of some hat.

Second, would the CNOOC and Petronas deals be approved under these new guidelines to be applied from here on? We do not know the answer to that.

Why is there a separate set of rules specifically for the oil sands and for no other sectors? Are there no other sectors the government thinks are particularly important strategically? For example, there are many who argue that shipbuilding is an important strategic industry, because if we were in a conflict, for example, we had better have the ability to build our own ships, or perhaps aerospace is a strategic industry. There are so many other areas, including high tech and so forth, that are important for various reasons.

We should examine the reasons why a particular industry is strategic, critical and worthy of this kind of protection from the government, when others are not. What is it that is particularly important about these industries? I am not questioning that the oil sands sector is an important one, but are there no others? That is the point. If they are going to talk about others, which others and why? Is it because of the industry's capacity to create jobs in the future? Is it because of some other important criteria? This is the discussion we should have had two years ago, not just now.

Does this mean the government does not believe that other sectors are as important? That is the point. What would be the criteria today, if there were an offer for PotashCorp? We do not really know. That is another question up in the air. Would it be net benefit, net benefit plus exceptional circumstances, or something else entirely?

We also do not know whether CNOOC, the Chinese company that the government approved to purchase Nexen, improved its original proposal to meet the concerns raised by Canadians, particularly, for example, those discussed by Premier Redford of Alberta. For instance, she said that in her view at least half of the directors on the board of Nexen should be Canadian. My own view is that they should have a majority, but I am not very far from Premier Redford on that point. We have to assume that has not happened because we have not heard it from the government. However, the Conservatives, despite all their promises of transparency and clarity, have not told us whether that is the case or what other conditions have been met or what the details of the agreement are.

What changed in relation to the Petronas deal to make it acceptable now, when the Conservatives determined it was not a net benefit to Canada earlier this fall? What happened in that deal that made the government change? We do not know. The Prime Minister, in all his transparency, has not told us because, apparently, as Canadians, we do not deserve to know. It is not important that we should know. The Conservatives feel we should rely on them and trust them. That is the message.

Did the Conservatives get any guarantees that Canadian companies would have reciprocity in China? We do not know the answer to that. Do we know whether any of our businesses would have an easier time operating there? There is no indication to that effect. Industry Canada documents state:

Non-controlling minority interests in Canadian businesses proposed by foreign [state-owned enterprises], including joint ventures, will continue to be welcome in the development of Canada's economy.

That is the statement that came with the announcement on Friday. Therefore, the government would approve other CNOOC-type deals, as long as they involved only minority interests. What is the definition of a “minority interest”? Is it 20%, 30%, 40%? We know that in a widely held public company, they do not have to have 50% to have effective control. It could be a lot less than that, sometimes as little as 20%. Is that what the government means?

What we do not know is what would happen if Nexen were to apply to the Alberta government to expand dramatically or to go into other areas and get other leases and become a much larger player in the oil sands than it is now. If the Conservatives are concerned about that happening, what measures are there to prevent it? I do not see any.

The most ironic thing, though, about last Friday's decision is that while the Conservatives are dead set against Canadian state-owned companies being involved in the oil sands, we see now that they are perfectly content to allow foreign state-owned enterprises from China or Malaysia to be involved in the oil sands. It is quite a thing. I find it incomprehensible as a matter of fact.

[Business of Supply, December 10th, 2012]

Mr. Speaker, I have lots of question, particularly considering the fact that in 2010 the Prime Minister promised to create a clearer and more transparent process for the review of foreign investment. We are still left with an awful lot of questions and not very much clarity. For example, we do not know, and perhaps my hon. colleague could tell us, what the definition is of the exceptional circumstances in which the government would allow further investments in the oil sands, particularly by state-owned enterprises. Is there some reason there is a set of rules specifically for the oil sands and no other sectors? Is the government really saying there are no other important strategic sectors that it would treat in a similar way?

The fact the government has not set out the sectors that it is going to protect and has just picked one and left it at that shows how ad hoc its approach is. It shows the lack of a plan, even though the Prime Minister promised two years ago to bring one forward.

If the member has time, I would also like to know whether the government's foreign investment criteria comply with any of the conditions requested by Premier Redford.