Industry committee  Fundamentally, I would. Intellectual property and knowledge are flowing in both directions. China is producing five times as many STEM graduates as the United States right now. We need to tap into that. But in looking at individual deals, we need to make sure that we're not allowing what is our still pretty small pools of innovation, compared to China or the United States, to just evaporate or disappear.

Industry committee  Absolutely. Very quickly, there is provision within the act for input from provinces, and that's absolutely critical. Again, there's a political dimension in provinces as well, but there are also health issues and management of sectors, as you suggest. Where provinces have the responsibility, they need to be brought in and allowed to provide their opinions before an investment goes forward.

Industry committee  That is one of the challenges. If they don't see it, they may not believe it happens, and that is a fair point.

Industry committee  Well, my experience in my adult life has been almost entirely China, so when I speak about that issue, I'm thinking only of China. In that regard, there are linguistic challenges and cultural challenges. You can't come into an organization like Public Safety and understand the nuances and complexities of how SOEs operate and how the party operates, party committees and private companies.

Industry committee  You raise a very important point. I think even the Chinese government, quite frankly, had cracked down hard on Anbang. It began to realize there was capital flight. SOEs were investing in things that had nothing to do with their core business. I would argue that from the ICA perspective—this is in retrospect, which is not really the way one wants to be looking at it—yes, this question might have been raised.

Industry committee  I would think that would be reasonable. In other words, if you've done badly and you want to come back to the well, we may be concerned that you would do badly again. One small point is that I think you'd have to be just as hard on Canadian companies. Otherwise, you get into difficulties with discrimination under international trade agreements.

Industry committee  CFIUS has changed dramatically in the last two years. Previously, security was the only thing they could look at. They couldn't even look at anything approaching our net benefit. When I spoke to the congressional economic and security commission, they were envious of what we were doing.

Industry committee  Properly followed, the full capacity is there. My concerns lie in the analysis: Is it sufficient?

Industry committee  The majority of said enterprises we can determine, and we have 20 people strong in our think tank. In the majority of those cases, it can be fish or fowl. We sort that out. However, there's a minority, about 5% of the Chinese investment in Canada, where some of the senior executives appear to come from SOE and the capital appears to come from a state bank or maybe from an SOE that existed before.

Industry committee  Conceivably, I suppose. For that 5%, let's imagine that the Canadian review authorities look at that and determine that it's not an SOE, but in reality it may be. So yes, it would be a small minority, but potentially, yes. An SOE is not necessarily masquerading. In some of these cases, managers—as has happened in the former Soviet Union—have migrated with capital and then may appear as a private enterprise.

Industry committee  There's always room for improvement. I spent 32 years in government, and I can assure you of that. At my university, for that matter, that's a given. Staffing levels are important. Expertise is absolutely critical. It's not easy to get. If you ask Public Safety whether it has enough fluent Chinese speakers who can get a security clearance, the answer I'm sure would be no.

Industry committee  This is such a difficult question. I wish you would pose easier questions. The truth is, yes, China does misbehave. It does look at targets of influence. It's the job of our security agencies to detect and deal with that. Quite frankly, I'm of the school that naming and shaming helps.

Industry committee  They shouldn't be. There shouldn't be those hesitations. They ought to just go to the heart of the matter, in my view, irrespective of who might be annoyed. However, if you're going to write into the ICA naming companies, put on your seat belt, because there'll be a strong reaction.

Industry committee  Thank you. I'll speak to any community organization at any time—that's a policy—and I'm delighted to have that connection. I think you're quite right. Not all SOEs are created equal. There are 300,000 of them; some pose a lower risk and some a higher risk. In general, an SOE with a more direct connection in sensitive sectors is more risky, but if you're, let's say, in China's Ministry of Science and Technology or China's Ministry of National Defense and you're interested in a potential dual-use technology, you may well want to approach that acquisition through a private company.

Industry committee  Even within those agencies, from my experience in working with them when I was in government and even subsequently, there's not always enough capacity. You don't make China experts overnight. It requires language skills, cultural understanding, understanding China, long postings, building up the skill set, giving them promotional avenues.