Thank you, Mr. Chairman.
I'm here as a private individual, a former official, and currently as a professor of public policy, so I can stand back and take a broad look at this.
When you put this into the context of broader Canadian interests, over the last 60 or 70 years, Canada has participated actively in efforts to reduce impediments to international exchange, whether that be of goods or services or capital.
In the earlier panel one of the members asked where Canada stood compared to others. My view would be, unlike Mr. Campbell, that Canada is an outlier. Among OECD countries, Canada is an outlier along with Australia.
I take the view that we have come a long way since the foreign investment review act. When it was passed in 1984, the Investment Canada Act, served a very useful purpose as a transition instrument. But I think in the world we live in today, decisions about what to buy, whom to buy it from, and where to invest should largely be left up to private sector interests, whether they be consumers or investors.
From that perspective, I thought the report that Red Wilson did for the government a little over two years ago on competition policy in Canada, and which also looked at investment issues, was spot on. I was one of the witnesses for that committee. Let me quote his advice:
...that any restrictions on foreign investment should be rare, narrowly conceived, limited to very large takeovers, and grounded in concerns about national security.
If I were sitting in your chairs, I would be looking seriously at scrapping the Investment Canada Act and replacing it with a narrowly conceived national security act. Foreign investment restrictions are a very poor instrument for dealing with the issues that people try to use it for.
If your objective is to deal with corporate behaviour, for instance, then you should do that through the Competition Act or the corporations act. If you're trying to deal with fiduciary issues, deal with them through the Financial Administration Act and similar kinds of acts.
Using foreign ownership restrictions almost always has perverse effects. It devalues the assets held by Canadians, reduces the opportunity for Canadians to benefit from foreign capital and expertise, and it reduces entrepreneurship in this country.
I cannot think of any public policy purpose that would be served by foreign ownership restrictions, except in those rare circumstances when the foreign investor is masquerading as a private investor but it is really a government that is investing. When governments invest, whichever vehicles they may use, they have other objectives than private investors. Other than that, I think the decision as to where to invest and how to invest should be made by the private investor.
There is a mistaken idea in Canada that when we have a foreign takeover of an existing Canadian corporation, that is a net loss to Canadians. I think that's a very big mistake to make. In effect, all that means is that a group of investors outside of Canada have a view that a particular asset can be used more effectively than the current investors are using it. They're willing to take that chance. In return, they provide capital to the former investors who can then invest it in whatever venture they think would be more profitable. The result of that is a better functioning Canadian economy.
From that perspective, I'm going to take a much more root-and-branch view than I think some of your other witnesses have. Rather than tinkering with the act, I suggest you rethink the act.
Thank you.