TORONTO, May 28, 2012 /CNW/ - The Harper government's decision to
further limit reviews of foreign investment and takeovers over the next
four years is totally counterproductive to Canada's economic
development, CAW President Ken Lewenza says.
Lewenza said the federal government's plans to raise the threshold for
review of a foreign takeover of a Canadian company to $1 billion from
the current $330 million will weaken Canada's control over its own
economy.
"This announcement is a slap in the face to the former workers at
Caterpillar's Electro-Motive Diesel plant in London, Ontario who by the
hundreds paid the price of lost jobs. This situation has been repeated
across the country as a result of the already weak foreign investment
rules currently in place," Lewenza said. Canadians have already
painfully experienced the aftermath of takeovers of Inco, Falconbridge,
Alcan and Stelco, he said.
"Instead of weakening the rules governing foreign investment, Harper
should be pushing tighter scrutiny of foreign takeovers of Canadian
companies," Lewenza said.
"Industry Canada's decision to preserve the loophole which allows
already foreign owned companies to escape review when being bought by
another foreign company is a lost opportunity."
In a February 9, 2012 letter to Industry Minister Christian Paradis,
Lewenza outlined five key areas of the Investment Canada Act which
required reform to prevent further cases like Electro-Motive, where 465
CAW Local 27 members were locked out and then a month and a half later
announced it was closing its London plant.
Lewenza slammed the Harper government for not strengthening the act with
these improvements:
Tighten up Loopholes: The idea that a $330 million acquisition (the current threshold for WTO
investors) is "too small" to matter, and therefore should not be
reviewed, is not credible - especially given a complete lack of
transparency or independent verification regarding how that value is
measured. The exemption of "indirect acquisitions" is an especially
dangerous loophole, one that proved disastrous in the Electro-Motive
Canada case.
Defining and Measuring Canadian Costs and Benefits:
The concept that a foreign investment must provide a "net benefit" to
Canadians in order to be allowed to proceed, is in principle a valid
one. The current ICA provides no detail, transparency, or verification
regarding how the costs and benefits of incoming foreign investments
are to be contemplated, measured, and compared.
Stakeholder Input: Other stakeholders must have a legislative ability to provide their
input to the foreign investment review process, through public hearings
or other consultative mechanisms. This is a fundamental prerequisite
for economic democracy.
Improved Transparency: Right now the review process is entirely secretive, with Investment
Canada refusing to even divulge whether an application has been
received, let alone the terms and effects of that acquisition. This
leaves other stakeholders (including workers, communities, and lower
levels of government) entirely in the dark regarding an acquisition and
its significance.
Imposing and Enforcing Commitments and Conditions: In the course of reviewing and approving foreign investments, a
pro-active government would have many opportunities to negotiate
commitments from the incoming investor that would enhance the net
benefits to Canada. These could and should include commitments
regarding its future Canadian production footprint, technology
transfer, minimum employment and training commitments, and targets for
investment and innovation activity.
