May 29, 1972 (28th Parliament, 4th Session)

Mr. Pepin:

I was trying to answer the question, why not more key sectors? I hope the Leader of the Opposition will take account of the remarks I have made.
The next question is: why not have general rules of Canadian participation? Why not a 51 per cent ownership formula? Why not a 75 per cent of directors formula? Why not the 90 per cent of management formula, and so on? These have been recommended by a good many people.
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Foreign Takeovers Review Act Mr. Speaker, the main purpose of this bill, and I will admit it, is not to increase Canadian participation, and I underline that, although, and I underline the "although" also, participation will be a factor in the screening of takeovers. It is one of the five factors that will have to be borne in mind. I refer to participation by Canadians both within the particular enterprise being subjected to takeover, and participation in the industrial sector where that enterprise is located. I believe that an increase in Canadian participation will come mainly through other policies, some of them presently existing and some others to be added in the future. Those now in existence are the tax system, the Canadian Development Corporation, and that sort of thing. And, as the Minister of National Revenue (Mr. Gray) said in his statement of May 2, the government is looking at other possibilities to enhance the Canadian interest, such as better use of Canadian capital markets, increased development of indigenous technology, and management development. On the latter subject my department, has recently created two modest programs for the improvement of Canadian management. I hope hon. members opposite have noticed this. Reference to these programs is to be found in communique No. 33/72, but I will not read it now.
Mr. Speaker, might I suggest that a policy that would focus primarily on Canadian participation without considering performance first could bring about rather strange results. A simple, automatic, general requirement of 51 per cent ownership, 75 per cent of directors, and 90 per cent of management would not necessarily produce the results we are all seeking. Having seven Canadian directors out of nine on the board does not give you much if the seven are treated like figureheads. And 90 per cent Canadian management does not mean much if all the decisions are in fact made abroad. Having 51 per cent Canadian ownership does not give you much if, in that particular enterprise control can be exercised with 10 per cent ownership. I am just saying here that one should not be fooled by appearances. These are not black and white situations to be solved once and for all by legislative action. There is a brief passage in Montesquieu-I am sure everybody has read it-where he calls at least for some countries, for the primacy of mores, customs and conventions over laws. This is where he says that very often changes in realities are more important than changes in law.
What is the importance of this bill, of this screening of takeovers? The leader of the NDP, the hon. member for York South (Mr. Lewis) says, "One big zero." I disagree of course.