A private member’s bill tabled by New Democrat Mining Critic Claude Gravelle (Nickel Belt) would amend the Investment Canada Act to prevent job-killing foreign takeovers of Canadian companies.
As it presently stands, when a foreign company proposes a takeover of a Canadian firm, the information it provides to Industry Canada is confidential, and cannot be disclosed to a third party.
Gravelle’s Bill C-551 expands Section 36 of the Investment Canada Act to include members of the Standing Committee on Industry in the decision-making process, allowing members to ask for details on foreign takeovers.
Noting that many countries have stiff rules on foreign takeovers, NDP leader Jack Layton said that 11,500 firms had been taken over by foreign interests in the last 22 years, and from all those applications, Investment Canada has not rejected one.
“We’re absolutely the easiest country to go to and buy another company, and it’s absolutely well known among those who follow business takeovers,” he said. “It’s very interesting to note that Alcan can’t take over Alcoa, but Alcoa can take over Alcan.”
Liberal and Conservative governments have consistently rubber-stamped foreign takeovers of Canadian companies without any transparency or accountability to the Canadian people. And when parliamentarians seek details on these takeovers, they are denied by the Industry Minister. This bill will change that.
One of the goals outlined in the Conservative’s spring 2010 budget was the government’s intention to promote foreign investment through reducing tariffs and cutting red tape. Federal Industry Minister Tony Clement said that promoting more foreign investment includes making it easier for foreign corporation to buy Canadian companies.
However, several takeovers originally judged to be of economic value to the country have proven to be anything but.
For example, in order to gain Canadian government approval to buy Stelco, Pittsburgh-based US Steel made numerous commitments to ensure its purchase would provide a “net benefit” to Canada, as required by the Investment Canada Act.
Instead, US Steel shut down former Stelco operations and laid off hundreds of workers. Brazil-based Vale’s purchase of Inco and Xstrata buying the former Falconbridge are other instances where foreign takeovers have resulted in job loss and economic devastation for Canadian communities.
Amending Section 36 would provide meaningful oversight by parliamentarians, and allow multi-party review of foreign takeovers. A multi-party involvement in foreign acquisitions of Canadian companies would provide greater public confidence in the process.