’All investments are not equal’

The Prime Minister’s remarks this evening on the CNOOC and Petronas acquisitions.

“Today the Minister of Industry rendered decisions respecting two foreign investment proposals.

“These decisions will be closely studied.

“It is therefore important that Canadians, and also foreign investors, understand how the government will approach such decisions in the future.

“In particular, Canadians generally, and investors specifically, should understand that these decisions are not the beginning of a trend, but rather the end of a trend.

“Investment is critical to our Government’s focus on jobs and growth.

“And, Canadians expect that we shall approve foreign investments that are of net benefit to Canada.

“But, all investments are not equal.

“In particular, as we have indicated for many years, purchases of Canadian assets by foreign governments through state-owned enterprises are not the same as other transactions.

“The larger purposes of state-owned enterprises may go well beyond the commercial objectives of privately owned companies.

“This raises the question of when, and to what degree, foreign state control of Canadian business can be of net benefit to Canada.

“To be blunt, Canadians have not spent years reducing the ownership of sectors of the economy by our own governments, only to see them bought and controlled by foreign governments instead.

“That was never the purpose of the Investment Canada Act.

“It is not an outcome that Canadians would ever support.

“It is not an outcome any responsible Government of Canada could ever allow to happen.

“We certainly will not.

“Fairness therefore, and Canada’s national interest, require that we be clear how Canadian law applies to future proposals by foreign government enterprises to acquire Canadian businesses.

“The law requires that the government consider each case on its own merits according to broad criteria.

“This, of course, will continue.

“In light of growing trends, and following the decisions made today, the Government of Canada has determined that foreign state control of oil sands development has reached the point at which further such foreign state control would not be of net benefit to Canada.

“Therefore, going forward, the Minister will find the acquisition of control of a Canadian oil-sands business by a foreign state-owned enterprise to be of net benefit, only in an exceptional circumstance.

“Outside the oilsands, our Government will strengthen scrutiny under the Act of proposals by foreign state-owned enterprises to acquire Canadian businesses.

“Some of the considerations that would be factored into a review of such acquisition proposals include:

“First, the degree of control or influence a state-owned enterprise would likely exert on the Canadian business that is being acquired.

“Second, the degree of control or influence that a state-owned enterprise would likely exert on the industry in which the Canadian business operates.

“Third, and most importantly, the extent to which the foreign government in question is likely to exercise control or influence over the state-owned enterprise acquiring the Canadian business.

“The onus to show these investments are of net benefit to Canada rests with the investor.

“Let me be clear.

“When we say that Canada is open for business, we do not mean that Canada is for sale to foreign governments.

“Our Government will therefore proceed as follows.

“Consistent with the distinction that we make between state and privately-run enterprises, our Government will, over four years, move forward with our commitment to raise the review threshold under the Investment Canada Act, to one billion dollars for private sector applications only.

“The threshold for foreign state-owned enterprises will remain at three hundred and thirty million dollars in asset value.

“Let me just make these two additional points.

“First, as I said earlier, the Government continues to strongly encourage inward investment in Canada.

“For this reason, our Government has accepted the great majority of investment proposals.

“We will continue to accept those that meet the tests applied under our legislation.

“Secondly, we will maintain an open, market-based approach to foreign investment in Canada.

“Canada has decided to have a free market economy.

“That is our choice, and today’s policy statement reinforces that choice.

“We will continue to push firmly in trade and investment agreements for reciprocal treatment abroad for Canadian investors.

“Our statements today will not satisfy everybody.

“Some believe you are either ‘for’ foreign investment under all circumstances, or that you must be ‘against’ foreign investment under any circumstances.

“Practical government rarely permits such simplicity.

“Foreign investment is not an end in itself.

“It is the means to an end.

“And that end is the long-term prosperity of Canada and Canadians.