Stephen Harper's proposals yesterday in Halifax on foreign investment are a good step toward greater Canadian competitiveness. While the minority Parliament lasted, the Conservatives had not yet said anything specific in response to the report of the Competition Policy Review Panel, chaired by Lynton (Red) Wilson, which was made public in June.
With these substantive ideas, Mr. Harper has strengthened his case for seeking a new mandate in this election, getting beyond the vague allegation of parliamentary “dysfunction.”
More boldly than some observers expected, Mr. Harper has accepted the Wilson panel's very first recommendation, to raise the threshold above which there is to be scrutiny of foreign takeovers, tripling it from assets of $295-million to $1-billion.
While partly opening up airlines and uranium mining to foreign buyers, Mr. Harper has shied away from removing protections in banking, insurance, telecommunications and broadcasting, saying that the market is not ready.
On uranium, the Wilson panel expressed confidence about three decades of Canadian experience in the development of nuclear non-proliferation policy, but it did recommend new national security legislation for this industry.
Mr. Harper's speech on Friday applied that idea more broadly, with a promise of “a new national security review mechanism,” in order to prevent foreign acquisitions from jeopardizing the country's security.
It is by no means clear what the criteria would be, but the test would presumably catch matters less drastic than, say, investments in Canada by Islamist terrorists.
Mr. Harper's generally pro-American government is the only Canadian government that has blocked a sale under the Investment Canada Act: a proposed American purchase of the aerospace satellite firm MacDonald Dettwiler Associates Ltd. This precedent amounts to a clue: The review mechanism would look at our ability to keep control over our own defence and intelligence capacities.
Although some recent foreign takeovers of Canadian corporations have reflected a shortage of strategic thinking on the part of both government and business in Canada, continuing protectionism is not the answer.
If Mr. Harper carries through with these new proposals, the next Parliament may be a fruitful one for the Canadian economy.
