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Mr. Speaker, my apologies for the interruption to my friend from the Bloc.
There is no doubt that foreign direct investment does play an absolutely critical role to Canada as a developing nation, as we want to encourage ongoing economic activities, and in many ways it is because of foreign investment that we get to see them realized.
I want to provide a number of thoughts on the concurrence report. First, I would like to be able to pick up where I left off prior to the adjournment, which is kind of a fitting place, with the member from the Bloc who has just finished speaking prior to us going back into this report.
My friend and colleague from did a fabulous job of explaining the process and what we are being asked to concur in. It is very interesting. The member for Kingston and the Islands pointed out, for example, on the issue of Bill , what the debate was supposed to be about. There are a lot of similarities between what the member for Kingston and the Islands said and what I said on this report back on April 27.
Back on April 27, I expressed my disappointment. I talked about how the Conservative opposition party was playing that destructive force on the floor of the House of Commons. That was much like earlier today: When I got the chance to speak or when the member for spoke, we talked about that destructive force in terms of process and what we are ultimately being asked to vote on.
The last speaker provided comments about how shameful it is that we are trying to limit debate on Bill and bringing in time allocation. In the back of our minds, I want members of the House to reflect on those comments, because that is in essence what took place back on April 27, when a concurrence report was brought in because the Conservative Party wanted to debate an issue, as opposed to debating what the government needed to see debated.
It is important to recognize this, because if we were to do a concurrence motion on all the different reports coming in, we would not have government days. We would not even have opposition days to the degree we have them today. There are many reports out there. It is easy to pick a report and move concurrence, and there go three hours of debate on the floor of the House.
We could argue that it is an important issue. Let us look at the issue of this particular concurrence debate. It is about those valuable resources that we have. We could talk about natural resources or our health sector, and I will get more into that. There is no doubt that is important.
However, what we were supposed to be debating on that particular day was the net zero legislation, important legislation that Canadians want and expect their government to act upon. For whatever reasons, the Conservatives moved a motion to ultimately say that we want to debate foreign direct investment as opposed to the net zero legislation. One could say that happened once or maybe twice, but it has happened more than that.
The Bloc member just criticized us in the Liberal Party, and to a certain degree even my friends the New Democrats, by asking how we can limit debate on Bill . The member for pointed out that because of the concurrence motion, much like this concurrence motion, instead of debating Bill , we were actually debating another issue, one we just finished having an emergency debate on last Thursday.
Members should look at April 27, when the Conservatives were playing political games in the chamber. Because of their dislike for allowing the government to pass legislation, they brought in another motion to prevent debate on yet another piece of legislation so that we can be criticized again for not allowing enough debate, just as the Bloc member criticized us for not allowing enough debate on Bill .
What I did not reference was the fact that we had attempted to bring n Bill before today, and the Conservatives introduced another concurrence motion back then, just like today.
Is there any reason the Conservatives are behaving in such a pattern? They adjourn debates. They want to take time off. They bring in concurrence. They look for ways to attempt to frustrate the government when it is trying to do the things it needs to do as government. It is not as though it only happens two or three times; this destructive force has been playing its games for quite a while now. There is a substantial cost to it.
I would suggest this to my friends in the Bloc: Maybe they should look at some of the comments that came from my New Democratic friends and maybe not be as quick to take the side of the Conservative Party. Many would suggest to us that either the Conservatives are conning the Bloc into supporting their legislative abuse or that the Bloc does not know any better. Maybe it is that the Bloc wants to participate in this destructive force as much as the Conservative Party wants to play its political games.
Is it any wonder, when we see the things that are happening inside the chamber, that the and Liberal members of Parliament are consistently saying some of the same things, such as that we will continue to remain focused on the priority of all Canadians, which is the pandemic? From the very beginning we have been saying that, led by the of Canada.
The Conservative official opposition, throughout this last number of months, with what I would suggest is its irresponsible behaviour, has been focused on the two things I referenced earlier today. It has moved another concurrence motion to try to kill the time allotted for government legislation. The first agenda for the Conservative Party is the character assassination of government members, and it will go out of its way to do that.
The second thing Conservative members do is cause as much detailed frustration as they can on the floor of the House of Commons so that, as we just heard before we got into this report, the opposition members can say something to the effect that the Liberal government is not being respectful of democracy because of time allocation.
Maybe we could have an indication of co-operation, at least to a certain degree. I am not saying that the Conservative Party has to agree with everything we are saying, but there is some onus, especially in a minority government, to be a little more responsible in terms of the legislative agenda.
Unlike opposition members, the government does not have timing processed on government bills. For example, the Conservatives had a choice and could have concurred in this report, and no doubt many others. They could say that foreign direct investment is so vitally important to our nation that they were going to bring the topic in on an opposition day, when they can highlight what they believe.
After all, if we take a look at the report, I believe we would see that there was a dissenting report that came from the Liberals. However, the Conservatives, as opposed to bringing in a motion to concur in a report, could have highlighted some of their concerns in the form of an opposition day motion and then asked for support from the Bloc and NDP. They could have just as easily have done that, just as they could have done for the report on Line 5 earlier today.
Unlike government legislation, at the end of the day—
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Mr. Speaker, I am pleased to attempt to begin my speech a third time. I acknowledge my colleague from , and I am pleased that he is interested in hearing this speech, especially since he is a member of the Standing Committee on Industry, Science and Technology, which I appreciate. He is always there to stand up for the people of his riding, as is the member for , who is present and who I hope will be able to give a speech soon.
We are not debating Bill right now. We are debating the Investment Canada Act. As I was saying, the member for , who was co-chairing the industry committee with me at the time, moved this motion so that we could study the Investment Canada Act. In the context of COVID-19, we had very legitimate concerns about the devaluation of Canadian and Quebec businesses, which could be at risk of being acquired by foreigners at bargain basement prices. We had the real and legitimate concern that head offices could be moved out of Quebec or Canada, benefiting foreign investors.
China is obviously one potential aspect, but there were many other issues, such as Air Transat and Air Canada. These airlines were seeing a significant increase in liabilities coupled with a significant decrease in passenger numbers. They were becoming vulnerable, which was why the Standing Committee on Industry, Science and Technology met and invited witnesses so that we could protect these companies.
Based on the report summary, “The Investment Canada Act (ICA) allows the federal government to review foreign investments. The ICA provides two distinct processes: a net benefit review and a national security review.” There are two key words.
For me, the net benefit for Canada must always be demonstrated. We expect some transparency from the government in this regard, particularly from the Minister of Industry, who will be able to place conditions on a sale.
Obviously, I am thinking of the acquisition of Rona by Lowe's, which happened in our own backyard. We never found out whether the federal government had laid down any conditions. It obviously must have, to allow the acquisition of Rona by Lowe's. The problem is that since these conditions were never made public, it was easy for Lowe's to back out of its commitments a few years later. Quebeckers are no longer attached to Rona. We saw brick-and-mortar businesses in cities across Quebec close their doors. The key issue is supply. A company like Rona would buy goods from Quebec and Canadian suppliers. Now that it is owned by an American company, it will favour the suppliers that can offer the lowest possible price. For an American company, that lowest possible price will be in the United States.
I just want to provide some background and say that, in its report, the committee recommended a more cautious, responsive, and transparent approach to regulating foreign investments.
I submitted a supplementary opinion on behalf of the Bloc Québécois. Although the report contained enough to make it positive, relevant and constructive, we believed that it was missing some important information, mainly surrounding the issue of reviews. I would like to read to my colleagues the Bloc Québécois's supplementary opinion, which is simply entitled “Better Protecting Our Companies” because that is what this is all about.
Can we trade in our neo-liberal economy for an economy where we protect our domestic market, for a Quebec economy and a Canadian economy where we can be independent, do business with local suppliers and keep our economy going in an independent manner?
It is important to remember that, in the context of COVID-19, we were dependent on other countries, whether it was for personal protective equipment or any other health-related issues, such as vaccine production. We lost eight months because of that.
I want to remind members of the context in which our study was conducted. I think it is absolutely fundamental. It is more important than ever. We need to come back to the principle of a strong domestic economy where we protect our national interests and where we buy from Quebec and Canada.
Here is the Bloc Québécois's supplementary opinion, which is entitled “Better Protecting Our Companies”.
The industry committee's report is an important and welcome change in terms of foreign investment control. The Bloc Québécois welcomes this shift after a decade of inaction, but we would have liked the committee to go even further.
In our opinion, the report should have suggested that the government bring the review threshold for foreign investments down to a reasonable level so that it can determine which investments are truly beneficial. Hence this supplementary opinion.
The federal government's foreign investment policy these past years can be summarized in two words: deregulation and permissiveness. The policy provides for increased scrutiny when national security is at stake, and ongoing oversight when investors are foreign countries. The fear of China is real.
However, the floodgates are open for all other foreign investments, which are approved automatically and without review. Statutory review mechanisms, which the government readily insists on protecting in every trade agreement that it signs, are essentially rendered ineffective for foreign investments.
In 2013, the Conservatives set the tone by announcing that they would raise the review threshold used by the federal government to determine whether foreign investments are truly beneficial.
From 2015 on, the Liberals have been doubling down on this change. Between 2015 and 2020, the threshold applicable to “private sector trade agreement investments” increased from $369 million to $1.613 billion. The result is striking: the share of reviewed foreign investments fell from 10% in 2009 to 1% in 2019. You read that right: under the current rules, 99% of foreign investments are now approved automatically and without review.
This lack of oversight comes at a bad time. Over the past 30 years, the nature of foreign investment in OECD countries has changed. New investments are down, while investments in the form of mergers and acquisitions of existing companies are up. I would add that this trend has only been exacerbated by the COVID-19 pandemic.
Between 2010 and 2015, only 54% of foreign investments in Canada went toward new entities, while the remaining 46% went toward mergers and acquisitions, where foreign investors took over a number of our companies, either in part or in full.
Canada is doing significantly worse than other industrialized countries in this regard. New entities receive 72% of foreign investment in the U.S. and 78% in France, compared to only 54% in Canada. And the trend continues to this day: from 2018 to 2020, mergers and acquisitions accounted for $90 billion of the $244 billion in foreign investments in Canada.
Simply put, over the past three years, foreign companies have invested $90 billion to take over a number of Canadian companies in part or in full. This $90 billion in takeovers has led to the downfall of head offices and turned them into regional offices with little power.
Quebec has gained significant economic and financial leverage since the Quiet Revolution, enabling it to pursue a policy of economic nationalism—the intensity of which varies from one government to the next—that gives Quebeckers greater control over their economy.
Our economic nationalism has two components. On the one hand, we are open to foreign investment as a driver of growth and development. On the other hand, we invest in Quebec companies to keep them intact and fuel their growth. And we protect our head offices because we know how important they are as decision makers.
Quebec does not, however, want to shut the door to foreign investment. Our economy is and will always be open to the world, and openness toward foreign investment is essential for enabling Quebec to access major trade networks, which is crucial for guaranteeing the prosperity of our relatively small-scale economy.
As Jacques Parizeau wrote in 2001, even before China joined the World Trade Organization, “we do not condemn the rising tide; we build levees to protect ourselves.” Unfortunately, weakening the Investment Canada Act has caused those levees to break.
One striking realization is that the federal foreign investment legislation was being gutted at a time when Quebec was becoming concerned about foreign takeovers and the collapse of our companies' head offices.
In 2013, the same year that Ottawa announced that it would raise the threshold for reviews under the Investment Canada Act, Quebec went in the opposite direction and established the Task Force on the Protection of Québec Businesses.
The task force was established by a Parti Québécois government, co-chaired by a former Liberal finance minister and composed mostly of businesspeople. It reflected Quebec's consensus for protecting our businesses.
The task force began by noting that Quebec's 578 head offices provide 50,000 jobs that pay twice the average salary in Quebec, in addition to 20,000 jobs for specialized service, in such as accounting, legal, financial and IT providers. That is huge.
In addition, Quebec companies tend to favour Quebec suppliers, while foreign companies with a foothold here rely more on global supply chains, which has an obvious impact on our SMEs, particularly in rural Quebec. As we have seen during the pandemic, global supply chains are fragile and make us entirely dependent on foreign entities.
Furthermore, head offices are essential for Montreal’s financial sector, which is in turn essential for SMEs across Quebec, since it gives them the financial tools needed to spur their development. Quebec’s financial sector is responsible for 150,000 jobs and generates $20 billion, or 6.3%, of its GDP. A large part, close to 100,000, of these jobs are in Montreal, which ranks 13th among the world’s financial centres according to the Global Financial Centres Index.
Lastly, companies tend to concentrate their strategic planning, scientific research and technological development where their head office is. In other words, a subsidiary economy is a less innovative one.
The task force’s recommendations were mainly addressed to the Quebec government: make more equity investments in companies, facilitate the distribution of employee shares and better equip boards of directors against hostile takeovers.
However, the power to legally regulate foreign takeovers to ensure that they are beneficial for the economy and society is in Ottawa’s hands. And at a time when Quebec was concerned about foreign takeovers of its key economic assets, the federal government chose to relinquish its power to keep foreign investments in check.
Quebec and Canada are two contrasting economies.
While Quebec upholds economic nationalism, Canada focuses on deregulation. That is because our economies are different.
Quebec’s economic nationalism encourages Quebec companies to grow. However, Canada’s economy is largely based on major foreign companies’ subsidiaries. Whether in the automobile industry, with Ford Canada, GM Canada and so on, or in the oil industry, with Shell Canada and Imperial Oil, Canada has had a subsidiary economy for a long time.
As for Canada’s large companies, they operate in industries that are protected against foreign takeovers by federal law, such as finance, rail and telecommunications. Canada, unlike Quebec, cares very little about protecting head offices because it does not believe that doing so is in its national interest. Nevertheless, Canada’s stance is informed by policy difference, not contempt for Quebec’s interests.
It is a welcome albeit incomplete shift.
A new wave of major investments from companies linked to the Chinese government has been a game changer. Canada is starting to realize that it needs to better control foreign investments and make sure that they are in fact beneficial before green-lighting them.
The Bloc Québécois is pleased that this issue has finally surfaced in the context of a study and in the report of the Standing Committee on Industry, Science and Technology.
The report suggests that the government should tighten restrictions on investments from foreign governments and investments that could impact national security; better protect strategic sectors of the economy; better protect intellectual property to ensure that China cannot access our technology; and increase the transparency of the government’s net benefit review process. The Bloc Québécois fully supports all of these proposals.
However, the committee did not take the next step needed to protect our economy, businesses and head offices, namely, lowering the review threshold. Hence this supplementary opinion, in which the Bloc Québécois speaks on behalf of a broad consensus of Quebeckers.
Even if the committee did not adopt our proposal, we hope that it will provide the government with some food for thought. After all, the pandemic has shown us that global supply chains are fragile and that it is unwise to be completely dependent on foreign decision-makers. All the more reason to protect our companies here at home.
I will add a few more points to this presentation of our supplementary opinion, beginning with the importance of ensuring that we can protect our intellectual property. I would like to highlight a few recommendations. One of our proposals in the report reads as follows:
That the Government of Canada protect strategic sectors, including, but not limited to: health, the pharmaceutical industry, agri-food, manufacturing, natural resources, and intangibles related to innovation, intellectual property, data and expertise.
I believe the report forgot to mention the aerospace sector, because I am positive we voted for it.
When the committee discussed it, it was important, and I want to recognize the interventions of Jim Balsillie, whom I just had to name in the House. We know him well for his leadership in the Canadian and Quebec economies. He has appeared numerous times as a witness before the committee, most notably on the importance of being able to protect innovations, intellectual property, data and expertise. That is absolutely essential in a knowledge-based economy.
One of the Bloc Québécois's recommendations is that the justify their decision whether or not a transaction is to Canada's net advantage. We want more transparency, an explanation of the factors leading to this decision and that the minister make public the conditions imposed for the acquisition by foreign investors to ensure that there is follow-up. When the information remains secret, a company can easily ignore the conditions because it is not accountable to the people. The foundation of a democracy is accountability to the people.
For me, the debates we had at the Standing Committee on Industry, Science and Technology about the recommendations to be made centred around the recommendation that the Government of Canada lower the review threshold to 2015 levels, or $300 million in 2000 dollars. Unfortunately, this is not what happened.
I recognize that when the Conservatives amended the Investment Canada Act they were trying to protect Quebec and Canadian businesses from Chinese investments. At the request of the Conservatives, the Liberals sought to make no changes to the Investment Canada Act. It seems that that thinking has not changed much since 2000.
The recommendation that I made concerning the threshold of $300 million in 2000 dollars was not accepted. This threshold would be revised every year, which is surprising. However this provision recognizes that the mechanism, which I wanted to strengthen, already exists. The threshold will be adjusted annually using formulas based on nominal GDP set out in the act and calculated in accordance with the principles set out in sections 3.1, 3.3 and 3.5 of the regulations.
Another part of our argument focused on thresholds, but other parties did not want to protect our businesses unless there was a national security risk. The goal is to protect our economy by displaying strong economic nationalism that enables us to make choices for our economy without opening ourselves up to takeovers by foreign investors.
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Mr. Speaker, I am pleased to rise today to talk about this report. It is a very important one. The discussion of the Investment Canada Act has been very lively for many years.
This report is the result of a motion from the member for , and there was much support to bring it to fruition. I want to thank all the witnesses who came forward to present and also those who made submissions. I also want to thank the staff. Our legislative crew is excellent. The researchers and analysts always did a good job during the process on a very complicated issue. We have a report that is quite extensive, about 50 pages of materials that have been condensed, reflecting some of the concerns that emerged from the sale of Canadian companies, but also the loss of sovereignty, in some respects, in the lost investments.
I will start, though, by discussing something that took place in the debate tonight that related to the . It will be interesting to see how the Liberals configure their position out of that. I asked about recommendation 2, which is, “That the Government of Canada introduce legislation to amend the Investment Canada Act so that thresholds are reviewed on an annual basis.” The Parliamentary Secretary to the Prime Minister, if we think it is significant, responded by saying he supported the recommendations of the committee, yet the Liberals put in a dissenting opinion. They could have put in a supplementary opinion, but they put in a dissenting opinion, which said, “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.”
Since the represents the , I am wondering whether he is having second thoughts to the committee members or to the , who did not address this, or whether the parliamentary secretary is freelancing by himself on this issue. I do not know which it is, but it will be interesting to sort that out because that is the reality of what has been presented to us today.
The reality is that the thresholds have been raised over a number of years and have created quite a concern among Canadians and businesses. They have been raised because of the iconic ones that we have lost, Falconbridge, Inco, a whole series that are name- and brand-recognizable firms. However, what has been presented, and what the previous speaker so eloquently discussed, is that there are smaller firms right now that go under the radar of the threshold and are gobbled up on a regular basis. In fact, there has been an exponential increase.
Part of the discussion we had at committee and part of the report is that, under COVID-19, a lot of vulnerable businesses could be purchased by non-democratic governments. I do not want to speak to just one particular country at the moment, but the reality is that some countries are using their public assets to purchase Canadian companies. With the COVID-19 issue related to the vulnerability of businesses, we have a lot of start-ups and medium-sized businesses that are very vulnerable to this.
This issue goes back quite some time, at least from my perspective. I first raised it at the industry committee with regard to non-democratic governments buying Canadian companies back in 2004. I had discussed it before, but we actually had hearings at that time. There was a headline in The Globe and Mail, “Chinese bid prompts MPs to eye revising investment act”. That was because of Noranda being purchased by China Minmetals.
At that time, I raised the question as to whether it is appropriate to have that type of investment, because it is a non-democratic government. It is not necessarily that it is China, but there are others as well. China decided to go on a purchasing spree after 2000 across the globe, and that included Canada. If we look at the sliding scale of purchases and investments, they are quite significant. That brings up a lot of questions about privacy and control of ownership of different types of assets, and, I would say, it has played itself out in terms of the housing market and speculative approaches that have had significant consequences for Canadians.
I pushed for it, and it came back in Parliament again in 2007. A Toronto Star article said, “Security may be factor in buyout review”. When I pushed for Industry Canada to look at this again, it was about looking at a national security clause in review, which has now been introduced as part of it, because a lot of companies were being purchased that were important to our national security.
This comes from my interest in it representing Windsor, Ontario where the manufacturing centre has been part of our DNA since our establishment as a community and as part of Canada. During the First and Second World War and recently, manufacturing has been part of our heritage. In fact, during the Second World War, we were very much a logistics centre for producing materials to fight fascism.
I have always viewed manufacturing as part of our national structure of defence and also our national importance of connecting people to jobs and meaningfulness and also self-determination. If we did not have that capability, we would not be able to do the things that we do today. Back at that time, it was maybe more raw materials and turning them into things that were used, versus today where there is lack of that vision.
I will always remember and I reference quite often the going to London, Ontario and saying that we actually had to transition out of manufacturing. That was pretty offensive because we do not need to just do rip and ship. One of the tragic things about our oil and gas industry is that we do not have enough refining capacity. I have seen Oakville, for example, lose Petro-Canada. I have seen several other refineries close down as opposed to being invested in, often because of the loss of Canadian control or they no longer became investment opportunities because of a lot of different issues. We lost the capability there.
We have lost some of the capability right now for our forestry industry, as we have a lot of our industry co-owned between Canada and the United States. There does not even have to be collusion, there can just be a disinterest in competing against ourselves and lowering market prices because there is no real interest to do so.
Canada has had some of our natural resources purchased. I mentioned the mining industry to be prioritized because it goes to foreign markets for value-added manufacturing that the wants us to transition out of. That is unfortunate because the value-added economy of manufacturing is important today in this new age for innovation.
When we are looking at solar, wind, alternative energy and also the innovation that is taking place, I often point to what is taking place in Detroit, basically two kilometres from where I am right now. It has billions of dollars going into new electric vehicles and manufacturing there and we do not have the same here. We have some piecemeal and some very important projects taking place that are exciting, but we do not have a national strategy and we do not have the same type of investment taking place. In fact, in Detroit there was over $12 billion of investment in the last number of years and for all of the Canada in the last five or six years, we were at around $6 billion, which is basically not in the game any more with respect to where we should be.
This report did get a response from the . There have been some modest improvements to the bill and there has been some strengthening related to national security review, but they did not make some of the bigger changes that we had asked for. I had done some work with Unite, a labour union in British Columbia. It represented a number of companies that had basically been taken over by the Chinese state. I will not get into the full details, but I am going to read this recommendation that has not been implemented:
That the government of Canada immediately introduce legislation amending the Investment Canada Act to allow for the establishment of a privacy protection review of and the ability to enforce Canadians’ privacy and digital rights in any ICA approved acquisition, merger, or investment.
That is the one that I want to talk about. The one that did get pushed through, which I am pleased about, also allows for divestment issues to take place and the minister did move on that. That is important.
I want to pivot because we are looking at some of our privacy laws right now and people need to be aware that we have a Privacy Commissioner in Canada. The United States does not have that; other places do not have privacy. Our privacy laws affect everything from our capability to be involved as a citizen and our own personal life, but also our businesses, and our ability to share information, to work collaboratively and to be connected in terms of mergers and so forth in a more modest way.
We have asked for this to be part of the actual law, because with those expectations we can keep data and information under a review process. I will give a specific example of the Canada census, which I had worked on, to show the vulnerabilities.
It is ironic, because the census is taking place right now, and I encourage everybody to sign up for it. My riding, for a lot of different reasons, has one of the lower rates of compliance, which needs to be improved. Often it is because of language, but there are other reasons as well. However, it is important to fill out the census for government supports and services, and a whole series of things.
At any rate, at the time, our census was actually outsourced to Lockheed Martin. It may sound bizarre to some people that an arms manufacturer would actually get hold of our Canada census, but it did. It had won the contract, and it did that in a number of places. However, because of the Patriot Act, it was going to assemble our data in the United States. It would have allowed all of our census information to be vulnerable to the Patriot Act.
The way the Patriot Act works in the United States is that we would not have control over our data. The U.S. can access that data and then the company that is actually giving it up through the act is not even allowed to report it to us. The act is a fallout from 9/11, when a series of laws were put in place.
The data was going to be moved from Canada, but we fought hard, and we were able to get the data to stay in Canada and actually be processed here, protecting the data from that.
Ironically, Lockheed Martin is no longer doing our census. It was one of those things where we outsourced to be “efficient”, but it turned out to be a loss, because we had to actually pay more money. On top of that, the company is no longer around, and we are back to where we started from, and so that shortcut did not work.
I really believe that there should be a privacy screen as part of takeovers. When we look at the complications that Facebook and other companies have had with some of the privacy breaches, even being held hostage, it is important to note that we are very vulnerable, but we still do not have laws to protect companies.
The University of Calgary had a security breach and actually paid money to have its privacy protected. We do not even have a sense of the entire situation right now, because a number of companies have compromised privacy. They make payouts and different types of restitution, but they do not have to make it public. Some of it does go public but some of it does not; it just depends upon the situation.
When we look at foreign takeovers and the Investment Canada Act, I would point to a few takeovers that have really affected people in their day-to-day lives.
My colleague raised Lowe's and Rona, and I thank him for that, but it is a great example of the consequences, because we have lost competition there. We basically had two competing companies that have been erased off the chessboard, so to speak. Now we are very vulnerable, and there is no motivation to compete. In fact, not only is there less competition, it has made housing more difficult, fixing up our properties more difficult and small businesses are more dependent upon one provider. It has had significant economic consequences.
I opposed that merger and appealed to the government to stop it, but the government refused. I think the parties signed a side agreement to maybe keep their headquarters here and that is about it. However, eventually the stores closed, and I cannot think of a worse situation that we have right now, because we are now dependent upon a one-source provider. We have lost those jobs, but more importantly, the competition.
Another example, which may seem less significant but true, is when Future Shop was taken over by Best Buy. Again, how did that benefit consumers? We lost another competitor, the Canadian franchise company of Future Shop, and for electronics, we are made very vulnerable to being one-source supplied. We have lost that competitive element.
One of the worst examples ever is Zellers being bought out by Target. Here we had Zellers making a profit during a time when chain retail was having difficulty. It had a union, wages just above minimum wage and benefits. Then Target came in, bought up Zellers and promptly shut the stores down in a failed operation. The jobs were lost, the workers lost their benefits, and we lost competition, and for nothing. We had a phony U.S. chain come in here and basically do a social experiment. We lost a significant part of our retail market economy. We have not recovered from that in many respects, because we do not have that type of competition any more.
I think about London, Ontario, where Caterpillar took over Electro-Motive. That was an important one, because those were good manufacturing jobs. That was about union busting and driving out competition.
One of the more iconic ones was when Stelco was taken over by U.S. Steel in Hamilton. We still are feeling the repercussions of that. We lost production capacity, which was an important part of our long-term history of manufacturing steel in the Hamilton region. An exceptional skilled-labour workforce was thrown out because U.S. Steel wanted to wind down operations.
I do not think we are going to continue having the type of situation we are seeing at the moment because of COVID. However, we have a lot of situations with smaller companies. There can be a better way.
I do not want this to be a negative speech because it is about raising awareness. There have been some wonderful cases where we have fought back and we have seen Canadian companies remain. I would point to the Potash Corporation of Saskatchewan. In 2004, the Australian company BHP Billiton was trying to take over the Potash Corporation. We fought that and were successful.
The second example I can think of is MacDonald, Dettwiler and Associates and Canadian space and satellite technology. We were able to prevent some of that takeover, and some of that is Canadian innovation.
I want to touch on something that is often forgotten. When we look at some of the tax on research and development, and incentives such as SR&ED credits and a whole series of others, we have to remember that as we are building up some of these companies, and providing subsidies for them to do research and development, we should have an obligation to stay Canadian and so should they. That is one of the things that we have to recognize. When we are giving incentives, whether they are direct or indirect subsidies, there is an obligation and an investment by the Canadian public. Therefore, if we were going to have a so-called free-market economy, where we get government out of the way, we would not be doing tax credits or subsidies for a whole series of things. We choose them as a democracy and as an innovative society to make advancements. If we do not actually get the fruits of those investments, they do not make any sense at the end of the day.
We have talked a bit about thresholds, but we are not seeing the action that we need to. We have much more work to do on this, and so much awareness is necessary. It is a very complicated file, but there is no doubt that it is sometimes captured in some of the iconic companies in the bigger acquisitions that take place. Let us not forget the small and medium-sized businesses that fly under the radar and under the requirements for review, that we just get notifications that we are losing. That is a poor choice for a country, especially if we are trying to build up our small and medium-sized businesses. We need to protect those assets and develop them better.
I will conclude my speech by again thanking the staff and the analysts for all the work that went behind this report. I know that some have diminished the importance of this debate for different reasons in the House of Commons, but I appreciate it because it has been important. At least we have it on the record, and I know that the House of Commons worked really hard to present issues in front of the government and the , as food for thought and also for making a difference.
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Mr. Speaker, I will repeat what he might have missed.
Under the Investment Canada Act, the Minister of Innovation, Science and Industry must consult the Minister of Public Safety and get their recommendation on national security reviews. That process includes consulting all relevant investigative bodies.
The standing committee report itself notes that as soon as an investment raises a national security concern, Public Safety Canada coordinates a review process involving 18 different federal departments and agencies, including CSIS, the Communications Security Establishment, the Department of National Defence, the Royal Canadian Mounted Police, Global Affairs Canada, Natural Resources Canada, the Public Health Agency and the Department of Finance.
Public Safety noted that this whole-of-government approach brings the relevant expertise to bear as we assess the national security risks of each transaction.
[Translation]
The government is in favour of foreign investment, but not to the detriment of national security.
The Investment Canada Act is the government's primary legislative measure for reviewing foreign investment in Canada. The has to review and approve major foreign investment based on likely net benefit before it can proceed. What is more, every foreign investment, no matter its value and country of origin, is subject to review under the Investment Canada Act's national security review process.
When an investment is subject to the Investment Canada Act, investors have to provide important detailed information. They are required to provide information on every source of funding of the investment and details on the investor's plan for the acquired Canadian company. This information is necessary to allow a thorough review of the investment based on its likely net economic benefit for Canada and whether it could be injurious to Canada's national security. This information is protected by the robust confidentiality provisions of the Investment Canada Act.
For each net benefit review, the minister must consider six factors that are expressly stated in the act. These are, among others, the effect of the investment on the level and nature of economic activity in Canada, including the effect on employment, and the contribution of the investment to Canada's ability to compete in world markets. An investment is only approved if the minister is convinced that it will constitute a global economic advantage for Canada. Each decision is based on a thorough, rigorous review and on the careful review of the investment's potential economic impact.
The national security review process described in the act is just as thorough. This process takes into consideration the nature of the goods involved, including intangible property, as much as it does commercial activities targeted by the investments or the stakeholders involved. Relevant information on each investment is provided to the department and to security agencies, including Public Safety Canada and the Canadian Security Intelligence Service, or CSIS, so they can review the information concerning the investment. These organizations can consult Canada's allies to determine if the investment could be injurious to national security or if an order needs to be issued to address national security concerns.
I know that I only have a limited amount of time, but it is also important to point out that the act takes into account the fact that investments made by foreign state-owned enterprises can be motivated by non-commercial imperatives that could harm Canada's economic or national security interests.
The provisions of the act demonstrate the special attention that is paid to state-owned enterprise investment. That includes a threshold [technical difficulties] for net benefit reviews and state-owned enterprise guidelines. The COVID-19 policy statement and the national security guidelines [technical difficulties] all of these measures related to state-owned enterprises.
It is not just all foreign investments by state-owned investors that are subject to more scrutiny, but also private investors assessed as being closely tied to or subject to direction from foreign governments.
[English]
Under the Investment Canada Act, the government already has among the broadest foreign investment review powers in the world. Through existing authorities we can address problematic investments that threaten Canada's national security, while remaining open to most foreign investment. The vast majority of foreign investments in Canada pose no national security risk.
The government continues to engage with our allies, including members of the Five Eyes, on foreign investment issues. The Investment Canada Act is not the only tool that the government uses to protect against national security concerns arising from economic activity.
[Translation]
The standing committee's report raised important points regarding foreign investments, state-owned enterprises and the safeguarding of Canada's national security interests. Whether it be a net benefit or national security review, the reviews conducted under the Investment Canada Act are always very thorough and comprehensive.
I would also like to once again point out the government's commitment to examining investments under the act in terms of their benefit for Canada and Canadians. Pursuant to the Investment Canada Act, the government will continue to ensure that Canada's economic interests are taken into account during the review of foreign investments in Canada.
[English]
Across a range of economic-based threats to national security, through budget 2019 our government committed almost $14 million per year on an ongoing basis, which has helped reinforce Canada's robust approach to address national security threats to the economy.
[Translation]
What is more, the government has never and will never compromise Canada's national security, as demonstrated by its excellent track record on that front.