INDU Committee Report

Dissenting Opinion of the Liberal Party of Canada

As referenced above, in June 2020 the Standing Committee on Industry, Science and Technology (the Committee) adopted a motion to study the Investment Canada Act (“ICA”), with particular attention to be devoted to the impacts of the COVID-19 pandemic on foreign-direct investment and the acquisition of potentially vulnerable or distressed assets of Canadian firms. The Liberal members of the Committee supported and actively participated in this study given its critical importance to ensuring the vitality of our businesses, the prospects of their employees and workers, and its overall impact on the prosperity of the Canadian economy.

Our interest in this study stemmed from our appreciation and acknowledgement that foreign investment continues to serve an important role in Canada's economy.  However, we recognize that while the current pandemic has had a disruptive effect on our economy, opportunistic investors may attempt to take advantage of economic disruptions and the concomitant vulnerability of certain business sectors. Consequently, we welcomed our Government’s timely commitment to ensure that until the Canadian economy recovers from COVID-19, foreign investments—especially those affecting public health and the supply of critical goods and services— will be subject to enhanced scrutiny under the ICA. Moreover, we appreciate full well that investments into Canada by foreign state-owned and/or -aligned enterprises may be driven by non-commercial considerations that may harm or undermine our country’s economic or security interests. For this reason, we are pleased to emphasize that the Government of Canada has also prudently subjected investments by state-owned investors to enhanced scrutiny under the ICA.

However, we are dismayed that the safeguards adopted by the Government of Canada in reaction to the COVID-19 pandemic neither seem to have been fully understood nor were accurately reflected in the recommendations adopted by a majority of the members tasked with shaping and approving the content of this Committee Report. Moreover, we are cognizant that certain recommendations included in this report neither adequately align with either the testimony of expert witnesses the Committee had occasion to hear from, nor conform with the practises informed by provisions currently embedded in the ICA. Specifically, our dissenting report would like to highlight and amplify the following:

• - Recommendation 1:
  • Adjustments to the current valuation thresholds are redundant and entirely unnecessary given that the ICA triggers an automatic national security review, irrespective of the prescribed valuation thresholds.
• - Recommendation 2:
  • Under the ICA, the annual net benefit review thresholds are reviewed and revised by the Minister on an annual basis, rendering the proposed legislative amendments unnecessary.
• - Recommendation 5:
  • Given the commercially and politically-sensitive nature of foreign investments and acquisitions, mandating such disclosures by the Minister or any other government official would not only impair international commercial undertakings, norms, and best practices, but would also inadvertently serve to undermine Canada’s strategic and competitive interests.
• - Recommendation 7:
  • Robust and effective mechanisms as contemplated in this recommendation already exist within the current ICA regime, rendering the proposed legislative reviews redundant and entirely unnecessary.
• - Recommendation 8:
  • Robust and effective mechanisms to this effect already exist within the current ICA regime, rendering any proposed legislative reviews redundant and entirely unnecessary.
• - Recommendation 9:
  • Such consultations have already been contemplated, rendering any new legislative amendments redundant and entirely unnecessary.

While we are receptive to practical recommendations that could potentially strengthen the ICA,  it is unfortunate that a majority of the members of the Committee chose to unduly politicize this important report by making ill-advised, rudimentary, and unnecessary recommendations that fail to adequately address the issues at hand.  An even-handed, non-partisan, and evidence-based approach would have better served both the Committee and Canadians as a whole, but was sorely lacking in the approach adopted by the members opposite.

The Liberal members of the Committee would like to thank the House of Commons analysts and clerks for their hard work on this important study as well as the expert testimony of witnesses that helped inform the substance of this report. Our dissenting report in no way attempts to cast aspersions on their hard work, professionalism, or expertise, but rather to elucidate and cure the inherent shortcomings cited in recommendations adopted by a majority of our honourable colleagues on this Committee.