Mr. Speaker, I will note at the outset that I will be sharing my time with the member for Brant.
Trade and investment both into and out of Canada are critical components of a prosperous Canadian economy. Thanks to our government, Canada has one of the most inviting investment climates in the world. We are committed to encouraging market-based foreign investment that benefits Canadians by attracting the capital, technology and access to global opportunities that will help our businesses grow and remain competitive.
As of 2011, investments by Canadian firms outside of Canada reached $685 billion, while foreign investment into the country reached $608 billion. Foreign investors are clearly interested in the strong and stable Canadian economy that our government is committed to sustaining.
Last Friday the Prime Minister made an important statement clarifying how the government will approach foreign investment decisions under the Investment Canada Act, or ICA, in the future. The Prime Minister indicated that it is important for Canadians and foreign investors to understand that the recent investment decisions are not the beginning of a trend but rather the end of a trend.
The dynamics of the global economy have shifted significantly over the last several years and the government has responded by clarifying the investment review regime. Foreign investment to and from emerging markets, particularly in Asia, is rapidly increasing across the world. For example, over the last decade foreign investment from Asia to Canada more than doubled. To maximize the benefits of changing global trade and investment flows, the government is clarifying how it plans to leverage Canada's existing foreign investment review framework to address such emerging economic realities.
The changing global investment landscape has seen a surge of economic activity from state-owned enterprises, or SOEs, across international borders. SOEs are entities that are owned, controlled or influenced, both directly and indirectly, by a foreign government. They therefore do not respond only to market signals the way private enterprises do.
In Canada, inward foreign SOE investment has grown from a nominal amount to over 20% of transactions subject to Investment Canada Act review. The nature of foreign SOE investment in Canada has also begun to change to one that aims to acquire majority control over Canadian businesses, particularly in the oil sands. The Canadian oil sands represent fully 60% of the global reserves of crude oil not already directly controlled by governments and their SOEs. With that comes a responsibility to sustain balanced ownership of this critical resource.
As Canada's oil sands are controlled by a comparatively small number of private sector businesses, the question of ownership and control becomes more critical, and the potential for foreign states to gain control of an entire industrial sector is significant. As a result, going forward, investments by foreign SOEs to acquire control of a Canadian oil sands business would only be found to be likely to be of net benefit to Canada on an exceptional basis.
Canadians are rightly concerned by efforts of foreign governments to control increasing portions of our economy. That is why the Minister of Industry will closely monitor and scrutinize all proposals by foreign state-owned enterprises to acquire Canadian businesses across the rest of the economy. That is why our government is addressing the issue of proposed acquisitions of control of Canadian businesses by foreign SOEs. The issue really is acquisitions of control, rather than minority investments or joint ventures. This is true of the oil sands, of the natural resources sector and of the entire Canadian economy.
Our government has not only clarified the ICA net benefit review process, but also issued revised guidelines for foreign SOE investors. The state-owned enterprise guidelines have been revised to clarify how the Investment Canada Act applies when an investment under net benefit review is being proposed by an investor that is owned, controlled or influenced by a foreign state.
The guidelines outline the government's commitment to ensure that the governance and commercial orientation of foreign state-owned enterprises are considered in determining whether acquisitions of control in Canada by the SOE are of net benefit to Canada. The guidelines also emphasize the importance of free market principles and the impact of the investment on employment, production and capital levels in Canada.
Finally, the guidelines stress that foreign state-owned enterprises must demonstrate that an investment will make a positive contribution to the productivity and industrial efficiency of a Canadian business. In addition to these clarifications to the SOE guidelines, our government will also be amending the Investment Canada Act to allow for the extension of the timelines related to the national security review process, which our government introduced in 2009.
National security is of fundamental importance and these amendments will give the government the time it needs to conduct careful and thorough reviews of complex proposed investments that could be injurious to national security.
The final clarification that the Prime Minister outlined in his statement on Canada's foreign investment framework is that the government will be proceeding with the progressive liberalization of the ICA net benefit review threshold to $1 billion in enterprise value over the next four years for private sector investors. However, the Prime Minister also stressed that the existing threshold level of $330 million in asset value would remain in place for foreign SOE investments.
These positions align with the government's openness to market-based foreign investment while at the same time closely scrutinizing foreign SOE investment across the Canadian economy.
By clarifying how the government will be using Canada's foreign investment review framework to advance the long-term prosperity of Canadians, we have stressed that we will maintain an open market-based approach to foreign investment in Canada, and that we will exercise a level of scrutiny of proposed transactions that is appropriate to the evolving economic and security context.