Several prominent academics and business people are calling on the Canadian government for more clarity on rules for foreign investors.
The two-day FDI Canada forum wrapped up Wednesday in Saskatoon. The forum was hosted by the University of Calgary’s School of Public Policy.
Executive Fellow Martha Hall Findlay said foreign investment has been a cornerstone of Canadian development since before Confederation.
“Canada, as a small economy, doesn’t actually have that much money to invest. So we have to look beyond our borders,” she said.
Admitting that hard numbers are difficult to come by, Hall Findlay said that there is still no doubt that overall foreign investment has been shrinking over the past few years.
Hall Findlay said that the public’s perception can be skewed by the fact that often, it’s only huge deals that make the news after getting flagged for government review.
“You publicly hear about the big deals … you don’t hear about a lot of the other investment that may come under that radar,” she said.
Hall Findlay said federal government decisions have made it difficult for foreign investors to know where they stand in Canada.
She cited the example of the rejected takeover of PotashCorp by BHP Billiton in 2010.
“Certainly lots of different factors involved in that, so it’s not a comment on whether it was the right or wrong decision. But I think ultimately what came out of that is that we weren’t necessarily clear enough on what our legitimate criteria are. And so that decision happened, and there were certainly people in the rest of the world who said ‘wait a minute, we’re not quite sure what Canada is doing,'” she said.
Hall Findlay also pointed to the purchase of Nexen, a Calgary-based oil company by CNOOC, a Chinese state-owned company. That deal went through, but in the aftermath the government tightened rules on purchases by foreign, state-owned companies.
“And then following that, the federal government imposed some rules that said ‘well, if you’re a state-owned enterprise, we won’t let you come in and take control of a company unless … under certain exceptional circumstances we might consider it’ — but they haven’t said what those are,” she said.
Hall Findlay said there are many facets to bringing more foreign cash back to into Canada. She said part of it comes down to branding and working harder to promote Canada overseas. At home, she said Canada needs to improve the clarity and consistency of decision-making at the Investment Canada level.
“How can we make those rules clear? If we have national security concerns, let’s be clear about what they are. We don’t need to hide behind that, but just say what they are. Because there’s lots of FDI in areas that really don’t have an impact on national security, so we need to make sure those investors are welcome and understand where those lines are,” she said.