OTTAWA, July 12, 2007 -- The Honourable Maxime Bernier, Minister of Industry, and the Honourable Jim Flaherty, Minister of Finance, are pleased to announce the creation of a Competition Policy Review Panel to be chaired by Mr. Lynton Ronald Wilson.
The Panel will review key elements of Canada's competition and investment policies to ensure that they are working effectively, allowing us to encourage even greater foreign investment and create more and better jobs for Canadians.
"The global economy has changed significantly in the last decade," said Minister Bernier. "Trade agreements have opened national markets, while international investments have reached unprecedented levels. These changes increase our standard of living as firms take advantage of untapped investment opportunities, create more jobs and develop new products and services for consumers. Our competition and investment policies must be working fully to the benefit of Canadians in this environment. This is why this review is important."
The Panel's core mandate is to review two key pieces of Canadian legislation, the Competition Act and the Investment Canada Act, including the treatment of state-owned enterprises and the possibility of a national security review clause. The Panel will also examine Canada's sectoral restrictions on foreign direct investment, and the competition and investment regimes of other jurisdictions to assess reciprocity between their rules and Canada's. Separately, the Panel will also assess how Canada's policies may further encourage outward investment. The Panel will report to the Minister of Industry, on behalf of the Government of Canada, by June 30, 2008 with concrete recommendations to further enhance competition in Canada.
In addition to the Chair, four other distinguished Canadians, namely Mr. N. Murray Edwards, Ms. Isabelle Hudon, Mr. Thomas Jenkins and Mr. Brian Levitt have been appointed to the Panel. Together, they have an impressive record of experience and knowledge of Canada's economy and its place in the world.
"Canadians are actively debating how issues of global competitiveness and foreign investment can strengthen Canadian business. If we are to create an entrepreneurial advantage for the benefit of future generations, we must ensure that Canada's competition and investment policies are modern and flexible," said Minister Flaherty. "While these policies serve us well, they have not been substantially changed in more than two decades and this Panel will help us determine whether we are indeed keeping pace in the highly competitive global economy. I look forward to its timely and important report."
Creation of the Competition Policy Review Panel
In its long-term economic plan, Advantage Canada , and Budget 2007, Canada's New Government committed to undertake a review of Canada's competition policies and its framework for foreign investment policy. Competition and investment policies are closely linked, as both underpin the strength of Canada's economy. The key objective of establishing competitive marketplaces is to create a more resilient, adaptable economy to provide Canadians with more and better jobs as well as with low prices, choice, quality and service.
To deliver on these commitments, Canada's New Government is establishing a Competition Policy Review Panel to examine the Competition Act and the Investment Canada Act , including the treatment of state-owned enterprises and the possibility of a national security review clause. It will also examine Canada's sectoral restrictions on foreign direct investment and the competition and investment regimes of other jurisdictions to assess reciprocity between their rules and Canada's. Separately, the Panel will provide views on whether our investment policies are working effectively to encourage outward investment by Canadian firms.
The global economy -- and Canada's place in it -- is changing at a rapid pace and will continue to do so in the future. Trade agreements are opening national markets while global investments are reaching unprecedented levels. Business is also becoming global, and production is increasingly oriented around global value chains. While our competition and investment policies are serving us well, they have not been substantially changed since the mid-80s. In undertaking the competition policy review, the Government's objective is to ensure that Canada's policies keep pace with these changes in order to create a highly competitive national economy and help create more and better jobs for Canadians.
The Panel is composed of five distinguished Canadians named by the Minister of Industry on behalf of the Government of Canada. It will receive submissions from interested parties and seek public input, consult to gather information, and conduct focused research to support its work. The Panel will be supported by a dedicated secretariat and will report back to the Minister of Industry and the Government by June 30, 2008 with concrete recommendations that could form the basis of a legislative agenda to further enhance competition in Canada and ensure that the benefits of foreign investment are maximized.
Areas of Interest
Competition policy is more complex in a global economy because a great deal of market activity takes place outside Canada's borders. As such, market activity may also be subject to the competition laws of other countries. The Panel will therefore need to determine how our competition laws can best cope with these situations. It may wish to examine how other countries are managing these challenges, identify best practices and assess how they could be adapted to the Canadian context.
The Panel may also wish to examine the meaning of market dominance in global markets. Overall, it will be important to carry out research and hear views from Canadians on how markets can work more efficiently, while protecting consumers from unfair practices wherever they originate.
The evolution of the global economy further suggests that Canada's foreign investment framework also deserves examination. It has long been recognized that foreign direct investment brings benefits to Canada through new sources of capital, ideas, and know-how, while foreign direct investment abroad allows Canadian firms to be more productive and competitive and, ultimately, creates more and better jobs in Canada. At the same time, foreign direct investment has traditionally raised issues of foreign control of Canadian industry.
In this context, it is important to ensure that the Investment Canada Act remains current with our emerging appreciation of the long-term factors for success, as Canada's ability to compete in a knowledge-driven global economy will increasingly depend on attracting highly qualified personnel, increasing investment in research and development, and building world-class centres of expertise. Accordingly, the Panel will examine whether the Act's "net benefit" test is designed appropriately to capture the range of benefits that are crucial to Canada's economic success. It will also examine Canada's sectoral restrictions on foreign direct investment.
The Panel has also been asked to provide advice on whether Canada's investment framework needs to be updated to address national security concerns, as well as issues related to acquisitions by large foreign state-owned enterprises with non-commercial objectives.
Separately, the Panel will look at whether our investment policies are working effectively to encourage Canadian firms to invest abroad and become more diversified by reaching out to new investment opportunities.