Reforming the Investment Canada Act: Walk More Softly, Carry a Bigger Stick

Philippe Bergevin and Daniel Schwanen
Additional contact information
Philippe Bergevin: C.D. Howe Institute
Daniel Schwanen: C.D. Howe Institute

C.D. Howe Institute Commentary, 2011, issue 337

Abstract: During the past 30 years, Canada’s share of world foreign direct investment (FDI) has been subject to a secular decline. Further, according to various measures of openness to foreign investments, Canada does not rank favourably against many of its peers. One of the culprits is Canada’s foreign investment review process, imposed pursuant to the Investment Canada Act. Before any foreign investment over a certain threshold is approved, Canada imposes a test of its “net benefit to Canada,” including such things as its potential effect on Canadian employment, exports, and productivity. The current test is highly subjective and unpredictable, and does not necessarily cover many situations where Canada’s interests might be involved beyond the calculation of a “net benefit.” Furthermore, the test might be detrimental to the economy’s long-run growth. This Commentary recommends scrapping the current test and replacing it with a national interest test.

Keywords: International Economic Policy; foreign direct investment (FDI); Investment Canada Act (search for similar items in EconPapers)
JEL-codes: F30 (search for similar items in EconPapers)
Date: 2011
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.cdhowe.org/reforming-the-investment-ca ... a-bigger-stick/15896 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cdh:commen:337

Access Statistics for this article

More articles in C.D. Howe Institute Commentary from C.D. Howe Institute Contact information at EDIRC.
Bibliographic data for series maintained by Kristine Gray ().