Madam Speaker, I will be sharing my time.

I am pleased to speak to Bill C-34, an act to amend the Investment Canada Act.

Canada has a long-standing reputation for welcoming foreign investments and a strong framework to promote trade while advancing Canadian interests. In fact, Canada has one of the earliest and most robust screening processes for foreign investments in the world.

The Investment Canada Act was enacted 38 years ago, in 1985, to encourage investment in Canada that contributes to economic growth and employment opportunities. The act allowed the government to review significant foreign investments to ensure these benefits exist. The act was updated in 2009 to include a framework for national security review of foreign direct investments.

Bill C-34 would implement a set of amendments to improve the national security review process of foreign investments and modernize the ICA. Collectively, these amendments represent the most significant legislative update of the ICA since 2009. These amendments would also ensure that Canada’s review process is consistent with our allies'.

However, in my view, there is another issue in foreign direct investment that should be looked into, and that is dealing with economic security. I believe this is not only an opportunity but also a necessity that we deal with foreign direct investment that results in economic stagnation of any sector of our economy, thus affecting our long-term economic security.

Let me explain this by first quoting a couple of sentences from the backgrounder that was published, which states, “The Act is designed to encourage investment, economic growth and employment”. The backgrounder also states, “The Government of Canada has committed to promoting economic security and combatting foreign interference by modernizing the ICA to strengthen the national security review process and better mitigate economic security threats arising from foreign investment.” For me, the keywords are “economic security”. There is no mention of the words “economic security” in the bill tabled by the government that we are debating today. Probably the thought is that “economic security” and “national security” are considered as synonyms.

I will now explain the importance of economic security. Canada is growing. Our population is growing. Our economy and GDP are growing, and we need our economic sectors to grow and contribute to economic growth and employment. If any economic or industrial sector does not grow and does not contribute to economic growth due to foreign direct investment, then in my view this is a threat to economic security. Any stagnation or complete lack of economic growth in a growing economy will directly affect our economic security in the medium to long term.

I will give two examples where foreign direct investment in Canada has resulted in stagnation of economic growth, which in turn is a threat to our economic security.

The two industrial sectors that are prime examples of this are the steel and aluminum industries in Canada. All steel and aluminum sector companies in Canada are foreign-owned. Due to our encouragement of foreign direct investment, today both of these sectors, with 100% foreign ownership, have been reduced to a branch office of multinational companies that are dominating aluminum and steel industry worldwide. Due to this 100% foreign ownership, there has been no increase in production capacity in both of these sectors in Canada for the last 20 years.

During the last 20 years, aluminum production has basically stagnated at about three million tonnes. While many new aluminum smelters are being set up in China and other countries, the installed capacity of the aluminum sector in Canada has stagnated. It is the same with the steel industry. During the last 20 years, the installed capacity has basically stagnated at about 15 million tonnes. Not only is there no growth in the production capacity of steel and aluminum, but due to 100% foreign ownership, Canada’s steel and aluminum exports are limited just to the U.S. and Mexico. There are hardly any Canadian steel and aluminum exports to Europe or the growing markets in Asia.

Canada has signed numerous free trade agreements across the world. We have free trade agreements with Europe and Asia-Pacific countries. In total, we have free trade agreements with over 50 countries, but has the aluminum and steel sectors taken advantage of these free trade agreements to increase Canadian exports? The answer is absolutely no.

Therefore, my question is this: If our welcoming foreign direct investment leads to 100% foreign ownership in any entire industrial sector and this results in growth stagnation of that sector, is it not a threat to our long-term economic security? If 100% foreign ownership prevents Canadian industry from taking advantage of our natural resources and our expertise to export Canadian goods across the world, is this not a threat to our long-term economic security?

We need all sectors in our industry to add value to our natural resources and contribute to Canada's economic growth by increasing their capacity to produce. We need all economic sectors to build on our many decades of knowledge and expertise to contribute to Canada's economic growth by increasing Canadian exports across the world. I again state that if any economic or industrial sector does not grow and does not contribute to economic growth due to foreign direct investment, then in my view this is a threat to economic security. Also, any stagnation or complete lack of economic growth in a growing economy will directly affect our economic security in the medium to long term.

I call upon the House to take this opportunity to address this shortcoming in the Investment Canada Act. Other than that, I completely agree with everything else that has been proposed in the bill. There was a need to update and streamline the administrative process in light of a shifting geopolitical environment and a need for alignment with international allies and for better coordination efforts with allies.

The world looks a lot different now than in 2009 when the act was last amended. The global market has rapidly changed with shifting geopolitical threats. Canada's interactions with the rest of the world are changing. The government has seen a rise in state-sponsored threat activities from hostile state and non-state actors. They are attracted by Canada's technologically advanced and open economy and world-class research community.

The level of sophistication of these threats has also increased. Hostile state and non-state actors are deliberately pursuing strategies to acquire goods, technologies and intellectual property through foreign investments that will damage Canada's economy and undermine national security while controlling the supply chain of critical goods. In fact, Canada has one of the earliest and most robust screening processes for foreign investments in the world.

The COVID-19 pandemic has accelerated this threat by creating vulnerabilities that could lead to opportunistic, harmful investment behaviour by foreign investors. They are looking to buy up vulnerable Canadian businesses. In response, the government has taken swift, concrete action to enhance scrutiny on inbound investments related to public health and critical goods and services.

The government again took action recently by enhancing scrutiny of investments involved in sensitive goods and technology, such as critical minerals, critical infrastructure and sensitive personal data. Through these amendments, the government is prepared to once again take action to strengthen the national security review while still allowing for positive foreign investments. Economic-based threats to national security are of increasing concern not just for Canada but for our allies as well.