Canada to relax investment rules?

Why Canada is considering making a change to its foreign investment rules

In an attempt to boost economic activity and attract increased capital to the country, Canada is considering relaxing foreign investment rules and opening up to state-owned enterprises in China, Bill Morneau, the Finance Minister said.

Morneau said his government is planning to enter discussions with their Chinese colleagues in an attempt to encourage more investment here in Canada. “We will express a continued interest in having a renewed relationship with China. In that regard, we’ll be talking about how we can work together,” Morneau said. “Those questions will be things that we’ll talk about, and our view will be that we’ll try and find ways that we can continue to encourage investment in our country.”

Morneau will join Justin Trudeau in leading a Canadian delegation on an official visit to China later this month. The trip will also include the Leaders’ Summit in Hangzhou, during which leaders will examine strategies to grow global growth. “Our goal will be to be communicating to the world why they should be investing in Canada,” Morneau said. “We see Canada as a real beacon for investment globally, a country with low political risk, a highly skilled workforce, and that’s something we want to communicate to G20 countries.”

Regarding the possibility of relaxed foreign investment rules, Portfolio Manager at Industrial Alliance Securities Inc., John J. De Goey, said: “Anything you can do to attract investment is a positive thing; it’s not gimmicky. The one thing that’s been consistent, Trump notwithstanding, in the western world over the past 25 years has been trade liberalization.”

De Goey believes any policy change that makes it easier for people to deploy money where they think it should be is a positive move. “No one wants artificial barriers impeding their ability to buy things they believe reflect good value,” he said. “The world has pretty clearly decided that globalization is here to stay. The direction of public policy is so inexorable that you can’t change it at this point.”