A passerby is seen outside the Toronto Stock Exchange at the Exchange Tower in Toronto, Ont. Feb. 7/2011.Kevin Van Paassen
The federal Conservatives have dragged their feet on one of the most pressing challenges facing Canada - what industries should we allow foreigners to own in a global economy, and which ones should we protect? When he axed a takeover bid last fall for Potash Corp. of Saskatchewan, Tony Clement promised "clarity" would be forthcoming on what is and what is not a strategic asset under Canada's foreign-investment regime. So far, nothing.
He could start by cribbing some ideas from a study produced 2 1/4 years ago by L.R. "Red" Wilson and his blue-ribbon Competition Policy Review Panel. Their aggressive document, Compete to Win, advocated loosening investment restrictions in the air transport, uranium mining, and telecommunications and broadcasting sectors, and, critically, placing the onus on government to demonstrate that an investment would be contrary to the national interest before disallowing it. Compete to Win had a coherent vision for Canadian competitiveness, one that demanded clarity from government. Instead of clarity, we had confusion over the potash deal and what made it strategic enough to send foreign money packing.
A more complex challenge now comes in the form of the proposed merger of the Toronto and London stock exchanges. There are plenty more takeovers on the horizon, because of cheap debt, a strengthening economy and cash-rich survivors emerging from recession. And yet the investing world does not know where Ottawa, or some key provinces, stand on protected industries. That may make for good politics, but it's lousy economics, especially for a country that likes to compete to win.