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Ottawa urged to limit intrusion in foreign investment
GLOBAL CAPITAL / STEVEN CHASE / November 17, 2007
OTTAWA -- Canada's biggest business lobby group is warning Ottawa to tread lightly as it prepares to toughen up the rules for screening foreign investment in this country.
The Harper government has announced plans to scrutinize foreign acquisitions that might compromise Canada's national interest, including takeovers by state-owned firms that don't operate according to free-market principles but as agents of their governments.
In a new letter to Industry Minister Jim Prentice, however, the Canadian Chamber of Commerce is cautioning Ottawa to interfere as little as possible in foreign investment flowing into Canada.
should be limited and should not discriminate against, or impede, market-driven
foreign investment," Canadian Chamber of Commerce president Perrin
Beatty wrote in a Nov. 15 letter to Mr. Prentice.
The Chamber of Commerce says Ottawa should consider whether it's even necessary to add a new "national security review mechanism" to its screening process or whether current rules are broad enough to protect Canadian interests.
The group is concerned about Ottawa taking steps that would curb foreign investment into Canada, which it says is a vital source of capital in a country as small as this one.
Mr. Beatty asked that the Conservatives ensure any "national security" review of future takeovers by non-Canadians does "not lengthen the approval time frame for legitimate foreign investments in Canada."
The federal government is arming itself with new tools to keep at bay state-owned companies of foreign governments that use national corporations to extend their geopolitical sway, Mr. Prentice announced last month.
The chamber is also urging caution about the way Ottawa treats foreign state-owned firms in the future.
"This is not a new phenomenon. Indeed, more than 20 state-owned enterprises have already invested in Canada and provided net benefits to our economy," Mr. Beatty wrote.
He said Canada should work through international organizations such as the Group of Seven to ensure that Canada's rules for foreign, state-owned companies are in line with other countries.