Minority governments and Canada’s confused foreign investment policy
| DOI | 10.1177/0020702020980749 |
| Published date | 01 December 2020 |
| Date | 01 December 2020 |
| Author | Stephen Azzi |
| Subject Matter | Scholarly Essay |
Scholarly Essay
Minority governments
and Canada’s confused
foreign investment policy
Stephen Azzi
Carleton University, Ottawa, Canada
Abstract
Three case studies demonstrate that federal limits on foreign investment in Canada
have been motivated by political not economic considerations. The cases—the abortive
1963 tax on foreign takeovers, the 1973–1974 creation of the Foreign Investment
Review Agency, and the 2008 and 2010 decisions to block the purchase of two
Canadian companies—shared many features. All three involved minority governments
that were vulnerable to shifts in public opinion. All three governments were skeptical
about turning away foreign capital. Yet all three undertook measures to limit invest-
ment. All three then abandoned the policy as soon as political circumstances changed.
This decision-making process helps explain why Canadian foreign investment policy has
often been confused and inconsistent.
Keywords
Foreign investment, nationalism, Canada, minority government, Foreign Investment
Review Agency, Investment Canada
In 1963, the government of Prime Minister Lester Pearson introduced a tax on the
foreign takeover of Canadian firms. A decade later, in 1973–1974, Pierre Trudeau’s
government created the Foreign Investment Review Agency (FIRA).
Corresponding author:
Stephen Azzi, Clayton H. Riddell Graduate Program in Political Management, Carleton University, 2435R
Richcraft Hall, 1125 Colonel By Drive, Ottawa, Ontario, K1S 5B6, Canada.
Email: stephen.azzi@carleton.ca
International Journal
2020, Vol. 75(4) 503–515
!The Author(s) 2020
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DOI: 10.1177/0020702020980749
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