May 2, 1985

PC

Louis Plamondon

Progressive Conservative

Mr. Louis Plamondon (Richelieu):

I should like to point out to my colleague that if he intends to speak about the Progressive Conservatives in his constituency, as a Progressive Conservative member, I intend to speak about some Liberal members and especially him. I am told that the Progressive Conservatives are quite bright people. They do their homework seriously instead of shouting as the Liberal member is now doing. And it is not with shouts or with charges of inaction that this country will be soundly administered. In that respect, I have been receiving complaints in my constituency and I am asked: What are they doing? And they refer to that well-known statement of Mr. Mulroney who said: "The clowns of the Liberal party are not all gone."

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Stanley J. Hovdebo

New Democratic Party

Mr. Stan J. Hovdebo (Prince Albert):

Mr. Speaker, I intervene again on Bill C-15 and the amendments to Clause 6. The reason for our Motion No. 20 is very obvious. We think there should be some separation between the Minister and the agency. We believe we should not give the Minister the authority to make judgments. We have a good basis for our feeling of insecurity about giving the Minister that kind of power. Consequently, we moved this particular motion which would eliminate, as far as possible, the kind of control and power that is given to the Minister by this Bill.

If we were to look at the long-term Tory position we would find first that there is not that much difference between the present Tory position and the past Liberal position, although the periphery of that position is being defended very strongly these days. During the election campaign, the Prime Minister (Mr. Mulroney) said that he would put FIR A on the back burner and would establish a new screening process, and that looked as though it might be a good idea. However, we now find that the screening process is made up of a pretty big net through which everything can fall.

[DOT] (1200)

I would like to quote from a statement by the Hon. Member for Mississauga South (Mr. Blenkarn). He said:

Let us look at foreign investment. The test now is whether that investment is of significant benefit to Canada. I say, Mr. Speaker, that almost every investment in Canada is a benefit to Canada-We do not need to turn it off-What we must do as part of our industrial strategy is to remove the shackles put on foreign investment.

We need to have another strategy, Mr. Speaker, a strategy of hands off.

That is the Tory policy as far as investment in Canada is concerned. It is unfortunate.

Over the years the policy has changed considerably. It seems that the Conservative Party has taken on the mantle of C. D. Howe, the mantle of unfettered continentalism, in opening the doors to investment, particularly investment from the United States. I wonder what the Right Hon. John Diefenbaker would say, if he were listening to this debate, with respect to the policy of the present Conservative Government. I wonder what John A. Macdonald would say if he was listening to this

debate and hearing what the Conservatives are attempting to do by removing FIRA and any inhibitions to foreign investment in Canada. I can imagine what Mr. Diefenbaker would say. He would be on the floor of the House every minute of the day saying that this policy would make Canada the fifty-first state of the United States. We do not trust the policy and, therefore, we believe that making it difficult for the Minister to have these powers under the Bill is worth-while.

Motion No. 19, which would also amend Clause 6 of the Bill, is an attempt to have more Canadianization. Nothing could be better. This Party knows, as does the Government, that the net amount of investment in Canada during the last 25 years has been negative. More Canadian money has been invested outside Canada than has been invested by foreigners in Canada. More money has left Canada in research and development, profits and interest than has come into Canada during the last 25 years. If the Government wants to establish Canadianization, it should look at investment and turn it around. It should not increase foreign investment, because it has a domino effect. The more investment, ownership and money which foreign companies have in Canada, the more they will spend increasing the size of their companies. Those foreign companies will become larger and expand into other areas. Canadianization over the years has had some impetus as far as the Government is concerned, but this Bill will turn that entirely around. Canadian nationalism will no longer be a basis for development in Canada.

I spent a number of years in Nigeria. That country is considered to be part of the Third World. At that time the Government of Nigeria was what we in Canada would call a benevolent despot; it had a military government. However, Nigeria had the courage to realize that if it was going anywhere, it had to own Nigeria. That Government put into place a Nigerianization policy, which allowed it to take over small businesses and large corporations. Nigeria did that, even though it was having problems maintaining its status as a democracy. The people in that Government had the courage, foresight and understanding of foreign ownership which enabled them to eliminate, as far as possible, foreign ownership of Nigeria's businesses and industries.

For example, the Nigerian policy dictated that any industry which was worth under 400,000 naira had to be owned and operated entirely by Nigerians. Nigeria gave those companies two years to find Nigerians buyers. If no buyer was found, those companies would be closed down and Nigerians would take over. The same policy existed for large corporations. The Nigerian policy dictated that within a certain amount of time a major portion of the shareholders of the companies had to be Nigerian.

Canada is a much more sophisticated and developed country than Nigeria, but it is unable to control investment in Canada. In fact, this Government thinks that the more investment, the better. The Government thinks that the closer Canada gets to the United States, the better, and the more the U.S. owns in Canada, the better. The idea of Canada becoming the fifty-first state of the United States must be looked at very closely.

May 2, 1985

These amendments form step one in the process of considering and possibly stopping that.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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LIB

Jean-Robert Gauthier (Chief Opposition Whip; Whip of the Liberal Party)

Liberal

Mr. Jean-Robert Gauthier (Ottawa-Vanier):

Mr. Speaker, I wish to take this opportunity to speak to Motion No. 19 as proposed by my colleague from Winnipeg-Fort Garry (Mr. Axworthy) and try and convince Hon. Members that the amendment in question is indeed an important one.

What the motion means is that the Minister is being asked to do two things. First of all, he is being asked to carefully consider foreign take-overs, making sure he has done everything in his power to encourage other Canadian companies to take an interest in a company that may be purchased by foreign interests. Second, the Minister is being asked to exercise the powers he has to inform his Cabinet colleagues about what is going on in his department and, conversely, to receive from those same Cabinet colleagues the information he needs to ensure that everything is proceeding in an orderly fashion, that everything is co-ordinated, and that all parties are working together to create jobs and attract investment for the benefit of our economy.

Mr. Speaker, I would like to get back to the amendment in question, and without quoting extensively from what was said in committee and in various public forums where people have asked that the Minister be given such authority, I simply want to comment on a recommendation by the President of the Science Council, Dr. Stuart Smith, because he appeared before the committee and asked the Government to carefully examine the following suggestion, namely that... As the House is aware, there is a $5 million threshold, which means that the Government must carefully examine any foreign take-over of Canadian assets worth more than $5 million. On the other hand, there are of course companies, and I know several... I see my colleague from Lac-Saint-Jean (Mr. Cote), I see my colleagues from the Ottawa-Carleton area ... there are many communities in Canada where industries with assets worth less than $5 million and provide employment might be the subject of a foreign take-over or might be of particular interest to a foreign company, and this might be a lumber mill or a sawmill or a paper mill, whatever, a local industry, and of course I am not talking about a shoe store, for instance, that might be bought out . . . That is not what I mean. I am referring to established industries that are important to the community where they are located.

Mr. Speaker, every year, the Government gives grants to companies and industries in the private sector. Sometimes there are very good reasons for helping a company. For instance, a company may be given a grant of $100,000.

When Mr. Smith proposed the amendment before the committee, he said: Any company which receives $100,000 in five years or over five years should be the subject of close scrutiny by the Minister to make sure that the company was not sold to

Investment Canada Act

foreign interests at a profit, thus taking advantage of the $100,000 grant.

I think it is serious, I think it is necessary, and I think coordination is required at the departmental level to be sure that grants to companies benefit Canadian companies and, therefore, Canadian workers. That is why, first, I urge the Minister to find out whether there might be a Canadian company interested in buying the company and continue to create jobs and operate the factory, the plant or the sawmill. Second, I think it is important that the Minister should know how much the Minister of State for Science and Technology (Mr. Siddon), for instance, contributes to development or research. I think he has to know what the Minister of Public Works (Mr. La Salle) may have given in grants to such or such company, or such or such organization, just so he might be able to say: My colleagues and I will coordinate the whole thing, see to it that everybody knows what the left and right hands are doing so that, one way or another, Canadians will become interested in the economic activity of their country.

Therefore, Mr. Speaker, the motion under consideration has a dual purpose: first, to secure notifications and conduct reviews of investments by non-Canadians and, second, to provide to other relevant federal departments and agencies information about means to stimulate investment by Canadians in Canada.

In particular, Mr. Speaker, we feel it is very important that these reviews be conducted on all proposed foreign investments, especially those which deal with the high tech industry and research and development and those that have received grants of $100,000 or more in encouragement from the federal Government so that they can continue operating in our country.

Everyone knows that Ottawa-Carleton has a very active high tech industry. That high tech industry has been the object of federal and provincial grants. That industry has received these grants to encourage it to establish itself and to create jobs in the Ottawa area. Recently, the Chairman of the Regional Municipality of Ottawa-Carleton wrote to the Premier of this province asking him to put more money into the Ottawa-Carleton area so that its high tech industry can really grow and prosper. The Minister responsible for this legislation before the House could, in my opinion, co-ordinate not only with his colleagues in Cabinet but with the provincial Government, and possibly with the municipal Governments so that, indeed, we could look at a program of encouragement, co-ordination and working together to encourage these industries to grow.

[ Translation]

Mr. Speaker, I would like to read into the record the statements made by Mr. Haydon in his letter to the Provincial

May 2, 1985

Investment Canada Act

Government. Ele was asking for more extensive economic activity in the Ottawa-Carleton area, adding that Ottawa-Carleton, after having contributed in promoting Ontario's international reputation in the area of high technology, is now demanding greater attention. Those are his terms, and I am reading from a report published April 27, 1985 in the newspaper Le Droit. The Provincial Government to provide the following programs, and hopefully they can be implemented with the co-operation of the Canadian Government:

Assistance to firms that want to invest in the construction of research laboratories, research and development loans, financial help up to $100,000-

As you see, this agrees with the recommandation made by Dr. Stuart Smith, President of the Science Council.

The Chairman of the RMOC is also asking the Provincial Government to provide grants for the universities of Carleton and Ottawa for new technology facilities, and to exponentially increase research grants to the Ottawa-Carleton Research Institute.

Recalling the role of high technology-

Mr. Speaker, the Chairman of the Regional Municipality, Mr. Andrew Haydon, goes on to say:

-job creation, Mr. Haydon stressed the fact that such selective programs for Ottawa-Carleton would catalyze the energy needed for high technology industries to reach the critical mass needed to settle down and face competition.

There is the objective: create jobs and expand our high technology industry in the Ottawa-Carleton area. I think this is worthwhile. I am wondering what the MPs for Ottawa-Carleton, that is Ottawa West (Mr. Daubney), Ottawa-Carleton (Mr. Turner), Nepean-Carleton (Mr. Tupper) will do about this issue. I wonder if they will also show concern, rise in this House and suggest that we are in fact requiring some sort of coordination between the federal, provincial, municipal and probably regional governments in order that the leaders may know that the Canadian Government is in a position to co-operate with all those participants and in this way promote and create jobs, making sure that the high technology sector can develop through full co-operation a meaningful industry, an industry which is vital to all of us, an industry which will create jobs, an industry which, as far as we, residents of Ottawa-Carleton, are concerned, Mr. Speaker, has made a significant contribution to the local economy.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Simon Leendert de Jong

New Democratic Party

Mr. Simon de Jong (Regina East):

Mr. Speaker, 1 too wish to join in the debate today on the amendments proposed by my Party and by the Liberal Party. These amendments are aimed to strengthen the Bill and make it at least a little more palatable to the people of Canada. I very much think that as a whole, the Bill is a backward step.

I know that Hon. Members of the present Government and, in previous years, members of the Liberal Government as well, have bowed to the notion that foreign investment is good. They have never really critically examined that proposition. It has been shown in the history of our country, surely, Mr. Speaker, that it is not necessarily good at all times. Simple logic would tell you, Mr. Speaker, that a person invests in an enterprise hoping to get back than what he puts in. We have seen over the

years the amount of money which eventually leaves Canada in the form of foreign investment, return on interest and dividend payments of past investment in Canada. The capital which leaves this country is greater than the capital which comes into this country.

Essentially, we are digging a hole and we try to attract foreign capital to fill that hole but in doing so we have just dug ourselves that much deeper into the hole. The foreign investment we receive, we will in time pay out many, many fold. Therefore, it has always seemed to us in the New Democratic party that it becomes more desirable to have Canadian ownership and Canadian control over our economy. Unfortunately, the Bill which we are debating today is a backward step from that notion of Canadian control.

The first amendment introduced by the New Democratic Party attempts to give the Cabinet a little more power over the Minister. As things stand now with the present legislation, it is the Minister and the Minister alone with his agency who will make the decisions as to what type of foreign take-over should be allowed. In other words, it is the Minister who decides whether a take-over of some cultural agency or research facility or energy corporation by some foreign agency should be allowed.

We suggest it is not just the Minister responsible for this Department who should make that decision; the Minister of Communications (Mr. Masse), the Minister of Energy, Mines and Resources (Miss Carney) and the Minister of State for Science and Technology (Mr. Siddon) should be involved when decisions have to be made which affect their particular field.

We feel the legislation as it stands now gives the agency and its Minister too much power. We have attempted in our amendments to be more specific, but unfortunately those amendments were ruled out of order so all we have left is the amendment which now stands before us. All it does is call for the Cabinet to have the power to give some broad policy direction to the agency and the Minister.

The amendment introduced by the Liberal Party is also a worthy amendment. It attempts to foster greater concern by the agency in developing Canadian investment. When we heard government members explain the Bill to us, they paid lip service to the notion that there should be greater Canadian investment in Canadian industries. Yet we found there was precious little in the Bill which would have the agency actively go out and attempt to foster greater Canadian investment in Canadian industry.

Both ourselves and the Liberals attempted to introduce other amendments which would be more specific concerning direction to the agency to seek more Canadian investment, but those amendments were not considered to be in order. Therefore, we are left with the amendment before us today, but the intent is both worthy and important. We believe there should

May 2, 1985

be something in the legislation to direct the agency to be more active in seeking investment by Canadians.

These two amendments will improve the Bill. They will give greater responsibility to the Cabinet as a whole in setting policy so that cultural agencies and scientific intensive companies would not be taken over, based on the decision of one person, the Minister in charge, but that the responsibility be shared by the Cabinet as a whole.

We feel as well that the Bill should be more specific in directing the agency to seek greater Canadian investment in Canadian industries. They are important amendments which I had hoped the government members would find to be worthy and positive additions to the legislation. Instead we have heard the few government members who have stood up accuse us of attempting to fillibuster. I am somewhat amused when I hear some of the Hon. Members across the way make that accusation; less than a year ago some of them were participants in tactics which should make them blush when they make that accusation about us.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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PC

Dave Nickerson

Progressive Conservative

Mr. Nickerson:

We have matured since then.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Simon Leendert de Jong

New Democratic Party

Mr. de Jong:

It is amazing how government members claim that they have seen the light since they have crossed the floor. I would suggest they have lost the light.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

William Alexander (Bill) Blaikie

New Democratic Party

Mr. Blaikie:

They went into the cave.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Simon Leendert de Jong

New Democratic Party

Mr. de Jong:

If the Government is really concerned about developing a more co-operative attitude in the House where the Opposition need not resort to attempting to drag a Bill out, which is one of the few instruments we have of making the Government accept some of the changes we are proposing, then the Government must also view the Opposition and its amendments as legitimate representatives of the people of Canada, having legitimate points to make, and the Government should cease rejecting out of hand everything we have proposed just because the bureaucrats in the back room and the few power Ministers have said no, this is the way it is going to be and damn what they say across the way; we are going to push this through whatever may come.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

William Alexander (Bill) Blaikie

New Democratic Party

Mr. Blaikie:

Tories just do what the bureaucrats tell them.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Simon Leendert de Jong

New Democratic Party

Mr. de Jong:

If the Government is interested in a new co-operative attitude in this House, it has to start looking seriously at the ideas we are proposing. A good example of that is the amendments we are proposing today. These amendments will strengthen the Bill. They will be of benefit to the people of Canada and therefore the Government should give serious consideration and support to these amendments when they come to a vote.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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LIB

Sheila Finestone

Liberal

Mrs. Sheila Finestone (Mount Royal):

Mr. Speaker, in speaking on the amendments before us, it seems to me that anything which will improve the living conditions and lifestyle of Canadians is the kind of thing we want. You have to use a litmus test to examine whether this legislation will meet some

Investment Canada Act

of the basic values and principles which we have the responsibility to move forward in any agenda for all Canadians.

With respect to the definition of the role and responsibility of the Minister, he should be very grateful that the amendments say in a sense that we want to remove this onerous task from his shoulders alone and have him share it with the other members of his Cabinet, share the responsibilities he has to direct the future of Canada, because he has chosen to throw down this welcome mat at a most unusual time in the history of our country and the world.

We are part of a world of competition, a world that is facing some very difficult times. I would like to bring to the attention of the Minister, and particularly his staff, an article which I came across entitled "Canada For Sale, But Who's Buying?". It was written by Deborah McGregor, who points out that there is growing evidence that all the developing countries are desperate for economic growth and they are now winning a bigger share of the world-wide potential of $550 billion in annual foreign direct investment. In fact, the proliferation of free trade zones in developing countries where corporations are given a host of tax incentives and other concessions to produce exports is causing the World Bank and the International Monetary Fund new concern, because this is adding to the fiscal burdens of those countries. In that light, Canada could be compared to a high-priced boutique open for business when all the surrounding shops are holding half-price sales.

If the Minister is serious in considering the well-being of Canadians and wanting to promote an improved lot for us, he is not addressing the issue. If he would accept an amendment of this kind, he would share his responsibility with the entire Cabinet, and it would not rest solely on his shoulders. I would like to bring to the minister's attention, and that of the members of the Government certain realities. They are of the opinion that by just changing the name from FIRA to Investment Canada we are going to have an automatic inflow of dollars. Well, I would like to share some realities which The Globe and Mail brought to our attention.

The Prime Minister (Mr. Mulroney) and the conservatives have been blaming FIRA and the NEP for scaring away foreign direct investment. They have attempted to bolster their point by pointing to StatsCan figures on net U.S. direct investment into Canada. I think it is very hard to argue with StatsCan figures, so in that sense I would like to bring them to their attention.

The article goes on to say:

Indeed, these figures seem to show U.S. capital fleeing Canada in 1976, the year after FIRA was set up, and in 1981-83 after the imposition of the NEP.

Yet, on their own, these net figures are misleading because they are made up of two quite distinct component parts: actual U.S. direct investment into Canada (called gross inflows by Statscan); and the buying back of branch plants by Canadian firms (called gross outflows by Statscan).

When these component parts are examined, the picture is significantly different from that painted by Mr. Mulroney. For until 1982, the gross inflow of U.S. direct investment into Canada continued to expand-in spite of FIRA and in

May 2, 1985

Investment Canada Act

spite of the NEP. Gross inflows varied between $l-and $ 1.4-billion throughout most ot the 1970s, before skyrocketing during 1980 and 1981.

FIRA and the NEP did, however, seem to affect significantly the other side of the ledger, the so-called gross outflows of capital from Canada to the United States as Canadians bought back U.S. branch plants.

This trend to repatriation, accelerated by the NEP in particular, peaked in 1981. That year, a massive $6.9-billion left the country, mainly to pay for the purchase by Canadians of U.S.-controlled energy firms resident in Canada.

But while the NEP affected repatriation, it did not seem to turn off the gross inflow of U.S. direct investment into Canada. For that too peaked in 1981, at $3.2-billion. Gross inflows of U.S. direct investment began to decline significantly only in 1982 as the world recession took hold and raw material prices plummeted.

We are not going to cure the problems of Canada by merely changing the name. I strongly recommend that this amendment be considered most seriously. If you look at the responsibilities the Minister has arrogated to himself under Clause 5 you will see that he is really not rendering the country any service. I suggest that he review what he has undertaken and what his standing committee decided to accept. He should take a good hard look and be open-minded and open-spirited with respect to this amendment.

All amendments should withstand some of the litmus tests of our society. If the Minister is to share his perspective with Employment Canada and the Minister of Employment and Immigration (Miss MacDonald), he might be in a position to ensure that the goals which the Government has been enunciating on employment equity are applied and followed through when foreign companies come in to purchase our companies.

The Minister and the Government have thrown down this welcome that. They are inviting the global corporation-which I gather is the new word for multinationals-to come in. They are saying that we are open for business. They must be reminded that we were always open for business, but in this time of stiffer competition money flows where it can be productive. If this money is to be productive the Minister should share his power with other members of the Cabinet, involving as many Ministers as possible.

We must recognize some stark realities. This is not the way that unemployment, particularly among our youth, the need for education and training, the problems of our aged, and the area of ecology and peace will be addressed. Those are the issues which need to be addressed. This Minister and his ministry can certainly do something. Perhaps it can be partly accomplished through this Bill.

Thank you very much, Mr. Speaker. I sincerely hope that some attention will have been paid, both to me and to the issue, and I hope that the amendments will be adopted.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

William Alexander (Bill) Blaikie

New Democratic Party

Mr. Bill Blaikie (Winnipeg-Birds Hill):

Mr. Speaker, I have a few comments to make on the amendments which have been put forward on Clause 6 of Bill C-15. That clause establishes the agency, to be known as Investment Canada, to advise and assist the Minister in exercising his powers and performing his duties under this Act.

The amendments before us, which I hope the Government will consider accepting, seek to increase the power of the

Investment Canada agency in relation to the Minister who now has the final decision-making authority. These amendments suggest that in certain areas of ambiguity or uncertainty with respect to exercising its mandate, the agency be able to go directly to Cabinet for a decision. The objective of this, Mr. Speaker, is to put some distance between the agency and the Minister without changing the advisory role. This is part of a set of amendments aimed at strengthening the agency itself, as opposed to the Minister.

I regret that so little attention is being paid by the media to the clause by clause consideration of this Bill at report stage. The amendments we debated yesterday dealt with the secrecy aspects which are built into the new agency, as they were in FIRA. The first set of amendments we dealt with were with regard to giving some indication, in the purpose of the Bill, that we wanted the federal Government to show some discrimination in what form of investment it deemed to be beneficial. All these amendments are very helpful in pointing out some very fundamental differences between the Opposition Parties and the Government with regard to the issue of foreign investment.

This is not an ordinary Bill, Mr. Speaker. This Bill represents a drastic change in the way in which we see ourselves as a country and the way in which we understand our national economic integrity. For that reason, much more attention should be paid to the arguments which are being made on both sides of the House. The Government offers a view of Canada's economic future and integrity which is accepted by many Canadians. The Opposition also offers a view which is accepted by many Canadians. I find it regrettable that there is no reporting of the debate as it proceeds in the House.

The issue of foreign investment is absolutely central to the future of any country and to its understanding of itself. Only minutes ago I came from a meeting with Dr. Allan Boesak from South Africa. One of the things which we had occasion to speak about during that meeting was his contention that a change in the foreign investment activities of other countries in South Africa would have a beneficial effect on the struggle of black people there to achieve their freedom and get rid of Apartheid. I realize that that view is not accepted by a great many people. However, it is a view held by increasing numbers of people who are concerned about the situation in South Africa.

They know that not just South Africa but the whole world is sitting on a time bomb that will eventually go off if countries like Canada do not put pressure on the South African Government to radically change its attitude and do away with apartheid.

While that is not a widely held view, I raise this question because it is an example, that is also evident in other countries, of how decisions about foreign investment not only affect the marketplace but the future of those countries in which the investments are made.

May 2, 1985

Although Canada does not face the same situation as South Africa, that is an extreme example which shows that foreign investment is not only economic in nature but affects the social, cultural and environmental dimensions of the countries in which investments are made. That is why we very much regret the uncritical attitude of this Bill toward foreign investment.

When I spoke to previous amendments that our Party proposed for the purpose of the Bill, I said that we wanted the Bill to indicate a willingness on the part of the Government to exercise discretion and simply not accept the premise that all foreign investment is beneficial. We want the Government to learn from the experience of other countries as well as ours that not all investment is beneficial and not all technologies are beneficial. That discretion will be impossible as a result of the Government's actions. Not only is the Government making these judgments impossible, it is saying that it is undesirable to make those judgments.

The Progressive Conservatives often say that we are open for business. What does that mean? It seems to me that in the context of what the Government has done until now and what is contained in this Bill, "open for business" means sending out the right signals to the investment community. Unfortunately, the Government signals its attitude toward working people and labour-management relations by postponing the amendments to Part IV of the Canada Labour Code. Its signal with respect to the environment has been to cancel research and monitoring programs in order to tell those who want to invest here that they can do what they want to the environment and the Government will not do anything about it. The Government's message with respect to social programs is that it is more willing to tamper with universality than to reform the tax system and collect revenue that would help offset the deficit and eliminate the need to tamper with the social programs.

While it may appear that the Government has made a series of mistakes with respect to these issues, there is an internal coherence to all of its actions. While the Government's other actions were a matter of policy, this Bill is the singlemost legislative action on the part of the Government which is part and parcel of the Government's over-all strategy. Therefore, it is very important that Canadians pay attention to this very fundamental debate about our position in the economic community.

Our Party believes that we should not capitulate and follow the trend in the world to play one country against another. We should resist those trends and work toward a new international economic order in which countries do not have to engage in such a policy by seeing who could be more obsequious to the investment community in order to get jobs.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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LIB

Alfonso Gagliano

Liberal

Mr. Alfonso Gagliano (Saint-Leonard-Anjou):

Mr. Speaker, the amendments we are discussing today concern the powers of

Investment Canada Act

the Minister responsible for the administration of the future agency known as Investment Canada.

Our amendment aims at extending the scope of the Bill so that the various departments and agencies can be kept adequately informed in order to be in a position to promote Canadian investments in Canada.

The main concern of this Government is to open our doors to foreign investors. Its first action as a Government was to introduce legislation to facilitate the takeover of Canadian markets by allowing foreign interests to invest in Canada without inquiring about their intentions or future projects.

Of course, foreign investment should be promoted in Canada. We do not refuse any capital inflow, but if foreign interests develop our markets and our resources, they must contribute to the social, cultural and economic development of this country.

Would the Minister of Regional Industrial Expansion (Mr. Stevens) be willing to entertain people as guests in his home without knowing where they come from, what they do and what they intend to do?

If he had to share his house with these people, would he not ensure that it would be of benefit both to himself and his guests, and that they would help to upgrade rather than degrade his property?

I am certain that, before sharing his house with strangers, the Minister would consult the members of his family. If he then decided that it was to his advantage to share his house, he would ask his friends, relatives and acquaintances to suggest someone suitable in the vicinity rather than a foreigner.

Before concerning himself with foreign investors, did the Minister think about Canadian investors? What legislation promoting Canadian investment have we had in the 8 months since the Progressive Conservative Government came into power? None, Mr. Speaker! On the contrary, to discourage Canadian investments, the Progressive Conservative Government has increased the sales tax, the price of gas and unemployment insurance premiums, which all increase the direct costs of businesses. Those were the first decisions of the Progressive Conservative Government to discourage Canadian investors. It is now introducing a new piece of legislation called "Investment Canada" which is aimed, not at Canadian investors, but rather at foreign investors, so that they will have every opportunity to lessen the entrepreneurship our young people had developed because they were assured that their efforts would be protected by FIRA. Even though we welcomed foreign capital, we ensured that everything would be under Canadian control and that Canadian business would be protected.

Mr. Speaker, our figures show that the savings rate in Canada is twice as high as that in the United States. If we have so much money in this country, why do we not encourage Canadians to invest in our businesses?

We all know that our small businesses create most of the new jobs in this country, but why do we not encourage

May 2, 1985

Investment Canada Act

Canadians to invest in this sector in order to create the hundred thousand jobs our young people need?

It is clear that foreign investors will not come to Canada to start small businesses. We know full well that because large corporations prefer to operate with robots, they create such a limited number of jobs that they should not be allowed to use our wide open-door policy to jeopardize the future of our small businesses, which account for 80 per cent of our jobs.

Mr. Speaker, this government does not understand the importance of small businesses. The Minister clearly demonstrated that when he introduced his amendments to the Small Businesses Loans Act. This legislation which in the past had helped thousands of Canadians to start their own businesses, this government, in one of its earliest initiatives, made it less accessible to businessmen, thereby discouraging Canadian investors and stopping the development of a great many small businesses.

And what about the Domtar mess? Again, the government failed to encourage Canadian investment, Mr. Speaker. The Minister of Regional Industrial Expansion refused categorically to help, without even considering the benefits which would accrue to both Canada's and Quebec's economies. The Minister has chosen to deal with our neighbours instead of encouraging our own people.

Just how many Canadian projects have failed because of this government's incompetence? Just how many jobs have we lost because of this Conservative government's ineptitude which favours foreign investment at the expense of Canadian investment?

As recently as this morning, I read the following heading in the economic section of the Le Devoir daily:

Ottawa attaching too much importance to foreign investment in Canada.

With your permission, Mr. Speaker, I should like to put on the record a couple of paragraphs from this article:

The head of the Quebec General Delegation emphasized that he did not mean to go to war against the federal government. Even at the height of the Constitutional crisis, the Canadian embassy has always demonstrated its willingness to co-operate on economic issues ... Yet, its concern is legitimate, in his opinion, considering that the federal government's interest in the promotion of foreign investment is new.

In fact, this interest is as new as the election of Prime Minister Brian Mulroney who, as soon as he assumed power, announced his intention to abolish the Foreign Investment Review Agency (FIRA). During his official visit to England, he even made it the main theme of his trip.

After selling Canada cheap to the United States in January, the Prime Minister is again trying to sell it to Europe. That shows the little consideration this government has for Canadian investors and small businesses which are responsible for the majority of jobs created in this country.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
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NDP

Nelson Andrew Riis (N.D.P. Caucus Chair)

New Democratic Party

Mr. Nelson A. Riis (Kamloops-Shuswap):

Mr. Speaker, I rise today not so much to make a speech but to comment specifically on these two very important motions before us. One of these motions was submitted by the Liberal caucus and one was submitted by the New Democratic caucus. Both motions in a sense attempt to do the same thing.

First, i want to be specific about Motion No. 20. This amendment seeks to increase the power of the Investment Canada agency in relation to the Minister who is now the final decision-making authority. It suggests that in certain areas of ambiguity or uncertainty with respect to the exercise of the corporation's mandate it is able to go directly to the Cabinet to get a decision. The aim of this motion is to put some distance between the agency and the Minister without changing the advisory rule of the organization.

This comes forward after, I think it is fair to say, the New Democratic Party having been on record time and time again suggesting that this Bill in total is not in the best interests of Canada. This motion is an attempt to improve an already inappropriate or bad Bill. I am sure, Mr. Speaker, that you are asking what the Hon. Member means when he says it is a bad Bill. I want to pose the question to Hon. Members assembled through you, Mr. Speaker, namely, do we want foreign investments in Canada that cannot meet the test of significant benefit to Canadians? That is basically the fundamental question. Why do we want to fall over ourselves as a country attracting foreign investment, foreign control of our economy, without assuring that this foreign control of our economy is in the best interests of Canada and Canadian citizens generally?

As responsible parliamentarians, we must not get caught up in the assumption that any business is good for the country, that any kind of technology will obviously benefit us. I do not have to go through the long list of corporations operating in Canada, some of them foreign, some of them domestic, that have not been operating in the best interests of Canada, in a whole variety of ways. I think of some of the petrochemical companies, the Love Canal situation and the acid rain that is now falling on this part of Canada. I looked at my deck early this morning. While I painted it last fall, as a result of the rainfall and snowfall I have to repaint it this spring-because of the penetrating influence of the acid rain continually falling from our skies.

I see the Hon. Member for Western Arctic (Mr. Nickerson) is in the House. He will recall that it was about 18 months ago when there was concern about the building in which we are sitting today because acid rain had caused parts of it to crumble and fall. These situations arise as a result of companies like Inco-both public and private corporations-which have not, in spite of many an attempt by Government to regulate, always acted in the country's best interests. That is all we are saying. Let us not get caught up in the rhetoric that whatever is business is therefore good; what is good for the Bank of Montreal is good for everyone, what is good for Inco is good for everyone. It is that assumption that we are attempt-

May 2, 1985

ing to challenge by suggesting foreign-owned corporations in Canada, and this is supported by our own studies in the House of Commons, import much more of what they need from their home countries than they do from Canadian sources.

Put simply, if a foreign company opens up a branch plant in Canada its tendency is to obtain services and goods from the parent corporation as opposed to the Canadian company that is down at the end of the block, at the other end of town or, at the other end of the province or the country. One respects that. It is keeping the cash flow within the family, but it is not necessarily in the best interests of Canadian companies, large and small.

Companies tend to discourage competition with their parent company. Again that is totally understandable. If a branch plant from an American corporation is operating in Canada, it will not want to go into the international markets and attempt to compete with a parent company. I think that is only common sense. These branch plants are here to serve this little market and this little market only. Any attempt to sell more lumber or finished products on the world market is not part of their mandate. It is not part of their raison d'etre-, it is not part of the reason for their presence in Canada. In that case, the restriction is on a foreign company operating in Canada which is not necessarily here to expand in the best interests of the Canadian economy, Canadian suppliers, Canadian exporters and the like.

One could go on and on, Mr. Speaker. I think I would choose to end my comments by quoting from the Progressive Conservative Party's own task force on high technology. In the report we find the following:

Recent data indicates that the research and development intensity of foreign subsidiaries in Canada tends to lack behind domestically-owned operations of comparable magnitude.

Perhaps I will have an opportunity to enlarge on that point this afternoon.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink
PC

Martial Asselin (Speaker pro tempore)

Progressive Conservative

Mr. Speaker:

It being one o'clock, I do now leave the Chair until two o'clock this afternoon.

At 1 p.m. the House took recess.

Topic:   GOVERNMENT ORDERS
Subtopic:   INVESTMENT CANADA ACT
Sub-subtopic:   MEASURE TO ENACT
Permalink

AFTER RECESS The House resumed at 2 p.m.


STATEMENTS PURSUANT TO S.O. 21

UNEMPLOYMENT INSURANCE

LIB

Bill Rompkey

Liberal

Hon. William Rompkey (Grand Falls-White Bay-Labrador):

Mr. Speaker, once again this year ice is blocking many of

the bays around the Island of Newfoundland and along the coast of Labrador. As in past years, fishermen, particularly inshore fishermen, are unable to get their boats out and to fish as they usually do. This has happened before; it has now happened again.

Fishermen cannot collect unemployment insurance benefits after May 15. After that time there is no income for them whatsoever. This situation has gone on and has not been corrected. I call upon the Government to correct the situation by bringing in measures to amend the regulations so that fishermen are treated on a par with other workers, and are allowed to collect unemployment insurance benefits until such time as they are able to go to work once more.

Failing that, I call upon the Government to do what has been done before, to make an ex gratia payment, a special allotment, for those fishermen who will have no other income after May 15, so that they will be able to feed themselves and their families until such time as the ice has gone and they are able to fish again.

Topic:   STATEMENTS PURSUANT TO S.O. 21
Subtopic:   UNEMPLOYMENT INSURANCE
Sub-subtopic:   NEWFOUNDLAND FISHERMEN-EXPIRATION OF BENEFITS
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EXTERNAL AFFAIRS

May 2, 1985