July 4, 1972

LIB

Jean-Luc Pepin (Minister of Industry, Trade and Commerce)

Liberal

Mr. Pepin:

Mr. Speaker, I think there is something providential in all events that take place in the world, and the fact that we are here today is obviously one of those events. I agree with NDP members that the amendments contained in motions Nos. 6, 7, 8 and 9 would tend to reduce the strength of the bill. They would raise the presumption of non-eligibility from 5 per cent to 10 per cent. That change is in motion No. 6. They would also increase the presumption of acquisition from 5 per.cent to 10 per cent and from 20 per cent to 40 per cent in respect of a private company. They would also raise the floor of automatic exemptions from screening from 5 per cent to 10 per cent, and from 20 per cent to 40 per cent in the case of private companies. So the position, of course, would obviously be to make it easier to avoid or circumvent in some way the operation of this bill, and consequently weaken it.

A question was raised concerning why these presumptions and the "floor" for acquisition were placed at the levels at which they were placed. We are asked how we justify these figures. I admit there is some arbitrariness in this, but generally speaking the purpose is to prevent acquisition of control of good Canadian companies, many of them important, with a very low level of non-eligible investment without even the possibility of screening these acquisitions of control. There are differences in the opinion of the experts. My hon. friend from Edmonton West has his experts who appear to be saying, if he quotes them correctly, that these levels are much too low. Others say they are already too high. There is a strong body of learned opinion which suggests that 5 per cent ownership of the voting rights of a public company, in some circumstances and in some instances, could constitute control. In cases where this is not so it would be easy enough to discharge the presumption, either by showing the minister that control does not lie with the person presumed to be involved or that the acquisition of 5 per cent by a person does not constitute acquisition or control. This is the very purpose of presumptions. I have said it so often that I am a little bored repeating it.

July 4, 1972

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert (Edmonton West):

But the patient will die in the interval.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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LIB

Jean-Luc Pepin (Minister of Industry, Trade and Commerce)

Liberal

Mr. Pepin:

Mr. Speaker, we have heard from the catacombs tonight through the hon. member for Edmonton West (Mr. Lambert). He tells us that this bill will bring about the end of foreign portfolio investment in Canada. I suggest that investors are not as nervous as my hon. friend seems to think they are: they are shrewd, hardheaded guys. If investment is good, I do not think they will be stopped by having to send a letter to the minister pointing out that they are not acquiring a control situation. The answer will be given quickly, in less than ten days. I do not think this will mark the end of foreign portfolio investment in Canada.

I might also remind my hon. friend that the acquisition of less than 5 per cent in a public company and of less than 20 per cent in a private company will not be subject to screening. So investors, in these cases at least, will not actually have to submit to the imperialistic dispositions of the Minister of Industry, Trade and Commerce. I suggest, also, that most of these gentlemen are accustomed to dealing with circumstances and countries in which the exercise of these regulations is much more strict, much more cumbersome and much more sub rose than it will ever be, I am sure, in Canada. We are not dealing here with kids but with very sophisticated people. I am convinced they are, and will still be, interested in investing in long-term investment in Canada for a long, long time. I suggest that the hon. member for Edmonton West, is overdramatizing here tonight.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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NDP

John Stratford Burton

New Democratic Party

Mr. John Burton (Regina East):

Mr. Speaker, even the Minister of Industry, Trade and Commerce (Mr. Pepin) seemed to excuse his efforts today by saying that it is rather providential that we are here today. I find it difficult to see what kind of rationalization he finds in this. I do not know whether he is a mystic of some sort, has some kind of communication with Mackenzie King in the past, or whether he really needs the help of providence in helping the Canadian economy.

I suggest that if the minister is to make these controls work it is very good that he should draw on whatever aid he thinks he can obtain from providence. I shall certainly not belittle that particular form of assistance. However, I think help should come from a little more substantive source than he has had up to the present time. But I agree with what has been said by him and, more particularly, by my colleague the hon. member for Assiniboia (Mr. Knight) in criticism of the amendments put forward by the Conservative party, because I think in amendments such as these we see which side the Conservative party is on when it comes to the crunch. The Conservative party is on the side of big business: its concern is with big business and industry.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink
?

Some hon. Members:

Oh, oh!

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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?

An hon. Member:

Come on, now!

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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NDP

John Stratford Burton

New Democratic Party

Mr. Burton:

The Conservative party is friendly with the manufacturers' association. They get along very well. That is where its friends are. That is where it will obtain whatever help it can. It seems to me it is attempting to

Foreign Takeovers Review Act

outdo the Liberal party and the government in wooing big business and industry in this country. It is quite clear the government felt it was in trouble with business and industry over the past several months and has been doing its best to calm things down and placate the business community. With these changes and the changes the government introduced at the committee stage, it made a further attempt to placate the business community. Now we see the Progressive Conservative party trying to outdo the government: it would make even more concessions. I think it has been very useful to have these amendments because we know exactly where the Conservative party stands when it comes to the crunch in dealing with the interests and welfare of the Canadian people.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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?

Some hon. Members:

Question.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Is the House ready for the question? The understanding of the Chair is that motions Nos. 6, 7, 8 and 9 will be put and that the disposition of motion No. 6 will govern the other motions. The question is on motion No. 6. Is it the pleasure of the House to adopt the said motion?

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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?

Some hon. Members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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?

Some hon. Members:

No.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

All those in favour of the motion will please say yea.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink
?

Some hon. Members:

Yea.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

All those opposed please will say nay.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink
?

Some hon. Members:

Nay.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

In my opinion, the nays have it.

And more than five members having risen:

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
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LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Pursuant to Section 11 of Standing Order 75, the recorded division on the proposed motion stands deferred.

It is the understanding of the Chair that when Mr. Speaker reviewed the matter when the report stage was first called, he did not make suggestions beyond the stage that we have just completed. I know that if hon. members are not in accord they will so indicate to the Chair, but we might now take motions Nos. 10 and 11. The vote on motion No. 10 would also dispose of motion No. 11. Motion No. 12 might then be considered and disposed of separately.

It is also suggested that motions Nos. 13 to 16 should be combined for the purposes of debate. If necessary, motions Nos. 13 and 14 might be voted upon separately. A vote on motion No. 15 would also dispose of motion No. 16. Motion No. 17 might be considered and disposed of separately. Motion No. 18 has been withdrawn. I will not go beyond that point at this time, and if hon. members have any suggestion on the proposed groupings they might indicate it to the Chair; otherwise we could proceed with motions Nos. 10 and 11.

3762

July 4, 1972

Foreign Takeovers Review Act

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink
PC

Marcel Joseph Aimé Lambert

Progressive Conservative

Mr. Lambert (Edmonton West):

Mr. Speaker, I am holding up the debate briefly for my colleague, the hon. member for Halifax-East Hants (Mr. McCleave) who is on his way. He has gone for some documentation. I hope the House can await his return for a moment.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink
LIB

Jean-Luc Pepin (Minister of Industry, Trade and Commerce)

Liberal

Mr. Pepin:

To accommodate the hon. member for Halifax-East Hants (Mr. McCleave) we might take amendment No. 12 so as to use up the time while he is on his way.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink
LIB

Russell Clayton Honey (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. Deputy Speaker:

Order, please. I might put motions Nos. 10 and 11. Mr. McCleave moves motion No. 10 as follows:

That Bill C-201, an act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be amended by deleting paragraph 3(5)(d) and substituting therefor the following:

"(d) The acquisition of any rights described in paragraph (c) shall be deemed to constitute the acquisition of the shares or property to which the right relates except where it is established that the right was acquired for the purpose of safeguarding the interests of the person by whom it was acquired in respect of a loan made by him, or for the purpose of use by the person by whom it was acquired in the normal course of carrying on a leasing business, and not for any purpose related to the provisions of this act.

Mr. McCleave also moves motion No. 11 as follows:

That Bill C-201, an act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be amended by deleting paragraph 3(5)(e) and substituting therefor the following:

"(e) the acquisition of a leasehold interest in any property used in carrying on a business shall be deemed to constitute the acquisition of that property except where it is established that the interest was acquired from a dealer in such property or from a person owning such property in the normal course of carrying on a leasing business, or except where it is established that the person by whom the interest was acquired had previously owned such property.

Topic:   GOVERNMENT ORDERS
Subtopic:   FOREIGN TAKEOVERS REVIEW ACT
Sub-subtopic:   MEASURE TO CONTROL FOREIGN TAKEOVERS OF CANADIAN COMPANIES
Permalink

July 4, 1972