Abstract
Recent reports (Watkins 1968, Wahn 1970 and Gray 1972)1 have examined the impact of foreign investment on the Canadian economy and its implications for American-Canadian political and economic relations. Official reports have considered only direct investment as a problem and portfolio capital has been ignored. There is substantial foreign ownership (mostly American) in the Canadian manufacturing, resources, and mining sectors.
From Journal of World Trade Law 10 (March, April 1976): 171–176. Reprinted with permission.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Endnotes
M. Watkins et al., Foreign Ownership and the Structure of Canadian Industry, Report of the Task Force on the Structure of Canadian Industry (Ottawa: The Queen’s Printer, 1968)
Wahn Report, Eleventh Report of the Standing Committee on Defence and External Affairs Respecting Canada- U. S. Relations (Ottawa: Queen’s Printer, 1970)
Government of Canada, Foreign Direct Investment in Canada (Ottawa: Information Canada, 1972). (This is often referred to as the Gray Report.) See also “A Citizen’s Guide to the Herb Gray Report,” Canadian Forum (December 1971).
The United States adopts a different definition of direct investment, based on a figure of 10 percent. The Canadian data also include cases where less than 50 percent is known to constitute control.
This might be contrasted with some of the recommendations in the Kierans Report on the mining industry in Manitoba, which advocates charging a higher rent for foreign use of resources, which under the Canadian Constitution belong to the Province, and after ten years the replacement of private mining operations by Crown Corporations. See Professor Eric Kierans, Report on Natural Resources Policy In Manitoba, Secretariat for the Planning and Priorities Committee of Cabinet, Government of Manitoba, Winnipeg, Manitoba, 1973.
For a detailed exposition of the theoretical determinants of foreign investment, see Alan M. Rugman, “Foreign Operations and the Stability of U.S. Corporate Earnings,” Unpublished Ph.D. thesis, Simon Fraser University, 1974.
Also see Clarence L. Barber, “Presidential Address: A Sense of Proportion,” Canadian Journal of Economics (November 1973).
The Foreign Investment Review Act came into force in April 1974. In its first year, the Foreign Investment Review Agency and the Federal Cabinet considered eighty-two applications by foreign corporations for takeovers of Canadian companies. Of these, fifty-five were approved, eleven rejected, and sixteen were withdrawn. Another forty-four applications were pending. In addition, it has been argued that a number of potential takeovers have been discouraged as they were unlikely to provide “significant benefit” to Canada, as defined by the Review Agency. See Herb Gray, “Good Fences: Controlling Foreign Investment,” The Canadian Forum 55 (June 1975). The operations of FIRA are explored in more detail in Chapter 10.
A. E. Safarian, Foreign Ownership of Canadian Industry (Toronto: McGrawHill, Canada, 1972).
Ibid., p. 267. Note that Safarian excluded very small firms from his comparison.
Gideon Rosenbluth, “The Relation Between Foreign Control and Concentration in Canadian Industry,” Canadian Journal of Economics (February 1970).
Ibid., p. 19 and Table II. 11. Kari Levitt, Silent Surrender: The Multinational Corporation in Canada (Toronto: Macmillan, 1970).
Abraham Rotstein and Gary Lax, eds., Independence: The Canadian Challenge (Toronto: Committee for an Independent Canada, 1972).
Philip Sykes, Sellout (Edmonton: Hurtig, 1973).
James Laxer, The Energy Poker Game (Toronto: New Press, 1970).
John Fayerweather, Foreign Investment in Canada (Toronto: Oxford University Press, 1974).
Alan Heisey, The Great Canadian Stampede (Toronto: Griffin House, 1973).
This Epilogue contains new materials not published in the original version.
Rights and permissions
Copyright information
© 1980 Springer Science+Business Media Dordrecht
About this chapter
Cite this chapter
Rugman, A.M. (1980). The Foreign Ownership Debate in Canada. In: Multinationals in Canada: Theory, Performance and Economic Impact. Springer, Dordrecht. https://doi.org/10.1007/978-94-015-7648-2_9
Download citation
DOI: https://doi.org/10.1007/978-94-015-7648-2_9
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-015-7650-5
Online ISBN: 978-94-015-7648-2
eBook Packages: Springer Book Archive