Madam Speaker, we can all agree that foreign direct investment is an important part of the Canadian economy.
Foreign direct investment helps Canadians participate in the global economy. We benefit as foreign firms bring their knowledge, abilities, and increased productivity, efficiency and technical development. Of course, foreign direct investment increases the economy of Canada. All of this means the creation of higher quality jobs, higher quality wages, and that Canadians will maintain the highest standards of living in the world.
Canada faces intense international competition to attract foreign direct investment because of the advantages that it brings. It is our job to ensure we create and maintain a positive environment that gives the message to the rest of the world that Canada is a great place to do business.
Investment flows both in and out of Canada, and this too benefits Canada. Canadian companies have in fact been quite active in acquiring foreign firms. In 2003 the flow of foreign direct investment into Canada reached $358 billion, while the flow of Canadian direct investment abroad reached $399 billion. Also, according to Statistics Canada, for the period 1997 to 2002, although foreign companies acquired 345 Canadian firms, Canadian companies acquired 447 foreign companies valued at $124 billion.
This being said, let me assure the hon. members of the House that, in the Investment Canada Act, Canada has a mechanism in place to review significant acquisitions of Canadian enterprises by foreign companies.
Although the confidentiality provisions of the act do not permit me to comment on a specific transaction, generally the acquisition of a Canadian business by a World Trade Organization member enterprise involving assets in excess of $237 million is subject to review under the act. In order to obtain approval from the Minister of Industry, the minister responsible for the act, an acquisition by a foreign enterprise must demonstrate a net benefit to Canada.
The act lists the factors considered in the determination of net benefit. These include: the effect of the investment on the economy, productivity, industrial efficiency, product innovation and competition, participation by Canadians, compatibility with economic and cultural policies, and contribution to Canada's ability to compete in world markets.
Under the act it is not just a simple yes or no decision. Under the Investment Canada Act, we have the power to demand enforceable undertakings from the investor to shape the final deal so that it provides net benefit to Canada. I can assure every member of the House that every application that comes to Canada will be closely observed and monitored by the Government of Canada.
As part of the review process, the minister consults with other federal government departments, the provinces, Canadian businesses and all those who are affected. Canada wants and needs foreign investment. I can assure the House that acquisitions by foreign investors are only approved where, on balance, they demonstrate a net benefit to Canada.