Canada is “not for sale”: Industry Minister

Posted on October 9, 2007
Filed Under Government |

“Free markets do not mean a free pass. Canada is open for business, but it’s not for sale. And like other countries around the world, it’s important that we have safeguards in place to protect our interests.” –Jim Prentice, Industry Minister

(Some strong words huh…)

Canada’s industry minister, Jim Prentice, said the federal government will be looking to make policy/rule updates on foreign state-owned companies investing in Canada. Well, with words like Canada is “not for sale”, its pretty obvious what these new rules would impose - barriers to investments by foreign state-owned companies and hurdles in the way of foreign companies looking to invest in strategic sectors.

He also said that, according to Statistics Canada, the country’s outstanding stock of direct foreign investment stands at $523-billion, while other countries have only invested $449-billion here. I can understand there being a few sectors which require some form of protectionist barriers, but sticking the middle-finger up at the rest of the world is not an option - which Prentice is seemingly doing through his words.

Looking back in history, it is exactly this type of “leadership” behavior that led to the 1930’s Great Depression. There are countless examples in world history proving that the market is the most efficient allocator of resources. Canada itself has done extremely well by opening itself up to trade and investment.

The only room for intervention in the Canadian economy is its natural resources sectors. Americans are buying Canadian energy, steel and mining companies at an incredibly fast pace. In fact, in the first half of 2007, American companies acquired 61 Canadian companies valued at almost $118-billion CAD, while Canadian companies acquired 159 American companies worth only $28-billion. (Crosby & Company)

If Prentice is looking to put protectionist barriers on anything, it should not be the entire business sector that has been key to the wealth and development of Canada. Rather, these barriers should be put in place to prevent Canada’s “resource drain” to the United States.

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