HALIFAX (CP) -- A re-elected Conservative government would make it easier for foreign companies to buy Canadian ones under a series of promises made Friday by Stephen Harper.
The prime minister made six pledges aimed at attracting foreign investment -- with some caveats.
Harper said he would nearly quadruple the threshold for foreign investment reviews to $1 billion, from the current $295 million.
The Tories would also increase the allowed level of foreign investment in airlines to 49 per cent from the current 25, and allow foreign companies to own Canadian uranium mines.
The pledges on airlines and uranium are contingent on reciprocal deals with other countries -- like open-skies agreements in the air industry.
Harper also promised to create a new national security test to safeguard against a foreign company, for instance, buying a computer-chip product with military applications.
A spokeswoman for Air Canada said the country's largest air carrier welcomed Harper's announcement as it has long advocated increased foreign ownership limitations.
"Increased foreign ownership will provide Canada's airlines with enhanced access to capital," said Isabelle Arthur.
The Tory leader said his party believes in free trade, but will step in when it feels the national interest is at stake.
"This government believes in free trade and open investment," he said. "But we also know how and when to stand up for our national interests."
"Canadians saw that when the minister of Industry prevented the takeover of Canadian satellite and aerospace leader MDA."
MDA, a Vancouver company known as MacDonald, Dettwiler and Associates, had struck a deal to sell its satellite and robotics division for $1.3 billion to Alliant Techsystems Inc. a U.S. rocket components and munitions maker.
However, the sale was rejected by the federal government because it gave control of Radarsat, a key information tracking satellite, to a foreign company.
The promises made Friday by Harper stem from a Competition Review Panel report the government tabled in June.
Fears of the so-called hollowing out of corporate Canada have grown in recent years after former iconic Canadian companies such as Inco, Falconbridge and Hudson's Bay were acquired by U.S., European and South American companies.
As well, the Canadian steel industry -- including Dofasco, Stelco, Algoma and Ipsco -- was taken over by various foreign companies in a global wave of consolidation in that sector.
The panel, headed by former BCE Inc. chief executive Lynton (Red) Wilson, called for a major overhaul of Canada's investment and competition laws to make it easier for foreign firms to buy Canadian companies.
The 134-page report did not directly tackle the hottest topic facing the government on competition policy -- national security involving investments by state-owned enterprises -- but assumed such a test will be enacted by government.
The panel called for increasing the threshold under which foreign takeovers would be reviewed under the Investment Canada Act to $1 billion from the current $295 million.
As well, the panel said the government should:
-- Liberalize restrictions on foreign investment in air transport, uranium mining, and the telecommunications and broadcasting sectors.
-- Remove the de facto ban on bank mergers.
-- Allow foreign companies to own a telecommunications business as long as it does not have more than 10 per cent of market share in Canada.
-- Increase limit on foreign ownership in the airline sector to 49 per cent.
As well, the panel urged all governments to reduce corporate taxes, eliminate all internal barriers to trade and establish a national security regulator to replace the 13 different regulating bodies of the provinces and territories.
However, Harper's announcement sidestepped two of the more controversial recommendations by the panel: allowing bank mergers, and a liberalized telecommunications industry.
Harper also declined to say what the government would do about the broadcasting sector, where non-Canadians now are limited to owning no more than 33.3 per cent of the shares at the holding company level of telecom or broadcasters.
"Citizens should know whether a Harper government would allow foreign investors to own media companies in this country or not," said Lise Lareau, president of the Canadian Media Guild.
