Mr. Speaker, I am pleased to address this motion given how much our government has been doing to stand up for Canadian interests in the global economic context.
I cannot stress enough how important trade and investment are to Canada's continued prosperity. Canada is a market economy that supports the global exchange of goods and services. Our market-based system has promoted the well-being and prosperity of our citizens and our international partners.
The integration of our domestic economy into the global marketplace has resulted in a dynamic economy, with growth and employment rates that are the envy of the world. Our integrated economy reflects shifts in global demand and supply, particularly in our world-leading natural resource sector. In fact, foreign investment in Canada's natural resource sector has nearly doubled in the past decade.
In response to this change in the investment landscape, the government has clarified the administration of the Investment Canada Act, the ICA, to better reflect the current economic context. This is essential for creating a transparent, stable and predictable investment environment for foreign investors and Canadian businesses.
An increasing amount of foreign investment in Canada's natural resource sector has come from foreign SOE's. These state-controlled entities account for a rapidly increasing amount of foreign investment flows, capital flows, around the world. For example, sovereign wealth funds, a type of SOE, reportedly holds over $5 trillion in global assets and made over $100 billion in global investments in 2000 alone.
To address inherent concerns regarding the influence of foreign states in Canada's market-based economy, the government has stressed that the following three areas will be closely examined with regard to SOE investments: first, the degree of control or influence an SOE would likely exert on the Canadian business that is being acquired; second, the degree of control or influence an SOE would likely exert on the industry in which the Canadian business operates and; third, the extent to which a foreign state is likely to exercise control or influence over the SOE acquiring the Canadian business.
The government has also highlighted that the burden of proof is on foreign SOE investors to demonstrate that their investment is commercially oriented, free from political influence and adheres to Canadian laws.
The government has also emphasized the need for foreign SOE investors to promote sound corporate governance and transparency, and demonstrate that they will make positive contributions to the productivity and industrial efficiency of a Canadian business. These principles have all been reinforced through revisions to the SOE guidelines and the related undertakings offered by foreign investors.
The government will also be promoting Canadian interests by improving the ICA national security review process. Specifically, we will be introducing legislative amendments to allow for the extension of national security reviews where required. As indicated by the Prime Minister last Friday, this allows the government to take the time required to ensure foreign investments are not injurious to the national security of Canadians.
Finally, in line with the government's belief that market-based foreign investment benefits Canadians, we will implement our commitment to increase the ICA net benefit review threshold to $1 billion in enterprise value for privately owned investors. This change, which was passed by Parliament in 2009, will focus net benefit reviews on only the most significant private sector transactions.
The government has also been working with stakeholders to carefully define the concept of enterprise value in the related regulations to bring these changes into force. Enterprise value better reflects the market value of a business, and so better captures the increasing importance of the service and knowledge-based industries in our economy.
However, in line with the government's concerns regarding increased levels of foreign SOE investments, we will be introducing the necessary legislative and regulatory amendments to maintain the current $330 million asset value threshold for foreign SOE investments.
These changes will maintain the government's ability to protect Canada's economic interests and our national security. The ICA national security provisions apply to a broader set of foreign investments, including those below all of the relevant net benefit review thresholds. In short, the government has clarified Canada's foreign investment review framework with particular focus on foreign SOE investment.
As emphasized by the Prime Minister, Canadians did not spend years reducing the ownership of sectors of the economy by our own governments only to see them bought and controlled by foreign governments. The government encourages foreign investment in Canada but it must be investment that promotes and sustains our free enterprise-based economy.
Canada's clear and rigorous foreign investment framework, coupled with the most ambitious trade expansion plan in our country's history, ensures that our economy will continue to grow, diversify and prosper.