Mr. Speaker, I am honoured that you recognized me. I would like to take this opportunity to acknowledge your colleagues from Joliette.
I will not be sharing my time today, but I would like to take a brief moment to recognize the work of parliamentary interns. I was privileged to have Sonja Tilro on my team for several weeks. She has done an incredible job, and this speech will be one of her final contributions to my team. I would like to acknowledge this contribution, as well as that of all parliamentary interns, who are distinct assets who add value to our Parliament.
Today we have before us Bill C-34, a government bill that seeks to amend the Investment Canada Act. This is the first major amendment to the Investment Canada Act since 2009, when the government introduced a national security review process for foreign investments. There have been no other proposals since then, other than a few concurrence amendments when entering into trade agreements.
In essence, Bill C-34 increases the government's ability to better control foreign investments, but only those that could harm national security. It makes no changes to the economic benefit part of the act. The issue of truly modernizing the Investment Canada Act is being avoided yet again and major issues will not be addressed this time either.
Bill C‑34 essentially makes seven changes to make the review process more effective. We are pleased to see that the work of the Standing Committee on Industry and Technology was taken into account and inspired these changes, which are the following: new filing requirement prior to the implementation of investments in prescribed business sectors; authority for the minister to extend the national security review of investments; stronger penalties for non-compliance; authority for the minister to impose conditions during a national security review and so on.
The Bloc Québécois supports Bill C‑34, which, in our opinion, improves oversight of investments that may be injurious to national security. However, the current version of Bill C‑34 simply does not include enough protection for our businesses in Quebec and the government has missed a golden opportunity to strengthen our business network and prevent our resources and capital from going offshore. To achieve this necessary energy transition, we need every economic tool at our disposal.
Is it still possible to add elements in order to better protect head offices and send a clear message that a multilateral agreement could be considered to meet the need, expressed by Quebec, of controlling the development of its economy and protecting businesses in the strategic niches it has created?
The Investment Canada Act was passed in 1985 and requires that the government ensure that important foreign investments are “to be of net benefit” to Canada before being approved. In 2009, the act gained a section on national security that gives the government the power to block a foreign investment if it is deemed to be injurious to national security. We are talking about investments in particularly critical sectors, especially those made by foreign governments or companies linked to those governments. Bill C‑34, introduced on December 7, 2022, by the Minister of Innovation, Science and Industry, has improved the reviews and increased the minister's powers, but only for investments related to national security.
My speech will identify a few elements that could be studied seriously by the committee when we get to that stage of the legislative process.
A few members are here today to read what is in the bill dealing with investment in Canada. What tools will allow development to occur with confidence while maintaining some control over foreign investment? How important is the protection of intellectual property? What commitments and conditions are we prepared to demand of investors in order to promote the creation of wealth here, in Quebec?
We are preparing our future in the image of the Quebec model, and we simply want the federal government to recognize this. 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, but otherwise the floodgates are open. The fact is, all other foreign investments are approved virtually 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.
I want to come back to the work of the Standing Committee on Industry and Technology.
In the Bloc Québécois' supplementary report, which was submitted at the same time as the standing committee's, we identified the main elements that are essential to strengthening Quebec's economic development model.
Let us talk about how the Conservative and Liberal governments have handled the threshold at which agreements must be submitted for review under the Investment Canada Act over the past 10 years.
In 2013, the Conservative government set the tone when it announced plans to raise the threshold at which the government evaluates whether foreign investments are actually beneficial. Then in 2015, the Liberal government sped things up.
Do these policies have a real impact? Yes. Over the course of that decade, things went off the rails. Every time we had a chance to study this issue in committee, witnesses sounded the alarm about the flaws in the current act. The threshold is not high enough, and too many agreements simply do not get reviewed.
The result is striking. Between 2009 and 2019, the proportion of foreign investments subject to review fell from 10% to just 1%. My colleagues heard that right. Under the current rules, 99% of foreign investments are now automatically authorized without a review. That is why the Bloc Québécois demanded that the department lower the threshold.
The Quebec model includes businesses that are much smaller in size and number. The department must lower the threshold in order to stop this transfer of our intellectual property and talent into the hands of companies headquartered outside of Quebec. This problem comes at a bad time. Over the past 30 years, the nature of foreign investment in OECD countries has changed. New investment is down, while investments in the form of mergers and acquisitions of existing companies are up.
We understand that we need to get on the same footing as our trading partners. If there is one thing the COVID-19 pandemic has shown us, it is that global supply chains are fragile and that it is unwise to be completely dependent on decisions made abroad.
The new review process is essentially the same as the one in the United States. Adopting it increases the chances of the Americans continuing to consider us as a reliable partner. That is a condition for being a well-integrated preferred supplier in their supply chains.
In a context where protectionism is on the rise among our neighbours to the south, which could seriously upset our economy, it is an important asset and the Bloc Québécois applauds it. The Standing Committee on International Trade is currently looking at the possible effects of U.S. policies in favour of the electrification of transportation that have the potential of excluding our companies that specialize in this, including electric vehicle batteries. In addition to the new guideline on critical minerals which is likely to diminish China's footprint in this sector, Bill C‑34 is reassuring, which is a good thing.
Critical minerals and the electrification of transportation also raise important issues. As in other countries, there are good reasons to protect our businesses and encourage them to set up near the resources they need. We cannot blame other countries for taking the opportunity to get their hands on our businesses, provided a comprehensive and thorough review has been done.
The region of Abitibi‑Témiscamingue is no exception. We are aware that our region will be coveted for its minerals such as rare earth, lithium, copper, nickel and gold. The region is full of critical minerals all the way to northern Quebec.
We also have one of the best universities, Université du Québec en Abitibi‑Témiscamingue or UQAT, which has international experts and top-notch programs. We want to play a leading role and really succeed in this field. For my part, I foresee the creation of a centre of excellence for critical and strategic minerals.
It is now time to create the necessary jobs and to undertake the long-term economic and industrial transformation towards a carbon-neutral future. The time has come to create a future where Quebec will be a global leader in clean technologies by focusing on essential minerals and the development of an innovative and sustainable ecosystem for the production of batteries, or what I call the green mine.
Bill C‑34 is in addition to the new critical minerals guidelines that the government adopted on October 28, 2022, and that apply to 31 minerals that are critical for the sustainable economic prosperity of Canada and its allies. By supporting the new government guidelines for these 31 critical minerals, more strategic projects for resource regions will be developed.
This is a real opportunity to prepare our own future through the creation of technological goods and the electrification of transportation. I am referring to the minerals necessary for the production of technological goods and the electrification of transportation. There is a real opportunity to position Canada and Quebec as leaders in exploration, extraction, processing and production, and to make Canada a leader in the production of batteries and other digital and clean technologies, and to develop an innovative and sustainable battery industry ecosystem in Quebec and Canada, including making Canada and Quebec a world leader in battery manufacturing, recycling and reuse.
In those areas, an investment from a foreign government or affiliated company will be considered a disadvantage from the outset. It will be subject to national security review and will likely be denied, except in exceptional circumstances.
The burden of proof is reversed here. The investment is refused outright, unless the investor can demonstrate that it is truly beneficial. The government recently blocked three mining investment projects by applying this directive.
That said, Bill C‑34 and the new Canadian critical minerals strategy should put the brakes on Chinese companies taking our resources. It should put a stop to our industries being so dependent on foreign resources.
Let us talk about security. While we are currently talking about the risks that Chinese companies represent to our security and our technological choices in telecommunications, it is just as important to assess the risk involved in foreign investors taking our resources away from our industries. By thoroughly and diligently reviewing the economic and security components of every investment, we can capitalize on those who would bring us prosperity and avoid those who would put us at risk.
It also makes it possible for us to keep pace with our allies, particularly the United States. It guarantees that we are considered a reliable, preferred partner in trade and in the development of critical mineral supply chains and that we can continue to be a part of the green future.
The amendments to the act make the national security review process more efficient by giving the Department of Innovation, Science and Economic Development, in consultation with the Department of National Security, the power to make an order extending the national security review referred to in section 25.3.
In the past, an order from the Governor in Council was needed at this step of the process. By eliminating the need for an order from the Governor in Council, the partners responsible for intelligence security will have more time to complete the intelligence analyses, which are becoming increasingly complex.
The protection of our intellectual property is another important issue. The amendments to the act put in place a pre-implementation filing requirement for some investments in designated sectors. That will enable the government to have an overview of the investments made in sectors where the investor could obtain sensitive assets and information, intellectual property or trade secrets, for example, immediately after an investment is made.
Now the government will be able to prevent that kind of irreparable damage. Investors operating in designated sectors will have to submit notice within the timelines specified in the regulations. The bill also provides for better information exchange with international counterparts. Amendments to the act facilitate international information exchange and authorize the Minister of Innovation, Science and Industry to disclose information about an investor to allied countries to support their intelligence analyses and national security reviews if the minister deems it appropriate to do so.
Previously, information about a given investor was considered privileged and could not be disclosed. This amendment will enable Canada to better protect itself against investors that may be actively seeking the same technology in several countries or when there is a shared national security interest. That said, Canada would of course not communicate that information for reasons of confidentiality or any other reason.
The government's blind spot is the preservation of our economic levers. All these developments are good, but they are incomplete. The Bloc Québécois wants the government to do much more. Last year, according to the annual report the department's investment division tabled in Parliament in October, foreigners submitted 1,255 proposed investments totalling $87 billion.
Of those 1,255 investment projects, only 24, or 2%, were considered to have national security implications and would have been covered by the new rules contained in Bill C‑34. The remaining 1,221 foreign investments remain subject to the old lax rules and almost all were automatically approved without review. Only eight, or less than 1%, were reviewed to determine whether they actually provided a net economic benefit.
Over the years, the act has been weakened. The threshold below which the government does not even review the investment continues to rise. Virtually all investments pass through like clockwork without the government being given the authority, under the Investment Canada Act, to assess whether it is beneficial.
The current act, passed in the mid-1980s, assumes that full liberalization of investment is good, that just about any foreign investment is good, regardless of the loss of decision-making levers and head offices that it entails, the resulting weakening of Montreal's financial sector, the total dependence of our businesses on foreign suppliers, the possible land grab, the loss of control over our natural resources and so on.
By focusing solely on national security, Bill C‑34 does not address Quebeckers' and Canadians' gradual loss of control over their own economy. For that reason, we invite the government to table another bill to modernize the entire Investment Canada Act and not just the part on national security. National security is a good thing, but so is economic security. In particular, the government must lower considerably the threshold for the approval of foreign investments without review.
We must be open to foreign investment because it is a vector of growth and development that we cannot allow ourselves to ignore. Global competition is fierce. We have a significant competitive advantage. We are reliable and our carbon footprint is by far the best thanks to our hydroelectric power.
Furthermore, we all want to support our domestic corporations and to help them grow and create wealth for Canadians. Our goal is to protect our companies and head offices, which we know are important decision-makers.
I want to reiterate that Quebec's economy is and will always be open to the world. 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.
However, we must be careful about opening our doors to investors. To date, the Investment Canada Act has not helped. We are encumbered by an investment act that has been watered down in many ways since the 1980s.
The total market liberalization that plagued the 1980s had a negative impact on the quality of our local economies and resulted in the weakening of financial centres like Montreal, the withdrawal of decision-making power and tools from head offices, land takeovers, and loss of control over our own resources.
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”.
Since the Quiet Revolution, the Government of Quebec has gained significant economic and financial leverage 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.
Unfortunately, as the Investment Canada Act was weakened over the years, the levee crumbled. We have to convince the government to insert new provisions into the act to shore it up.
This is a welcome development, but it is not enough. Major investments from corporations with ties to the Chinese government have shifted things. Canada is starting to realize that it needs better oversight over foreign investments and has to make sure they are beneficial before authorizing them. This bill signals an awareness that was a long time coming, and the Bloc Québécois is happy about that.