In the thickets of the mostly middle-of-the-road Liberal election platform lurks an element of reborn economic nationalism. The document criticizes the Conservatives for not intervening in the purchases by non-Canadian firms of Inco Ltd., Alcan Inc., Stelco Inc. and the assets of Nortel Networks Corp., and complains that BHP Billiton Ltd.'s proposed purchase of Potash Corp. of Saskatchewan was only fended off by "intense pressure" on the government. The clear implication is that all these transactions ought to have been stopped.
Worse, the Liberals want to make the criteria for screening of foreign takeovers more strenuous. Taking their cue from the "strategic assets" concept that was made much of in the Potash controversy, they would institutionalize this slippery phrase by building it into the Investment Canada Act - where it is now mercifully absent.
None of this, however, would go as far as the National Energy Program of the 1980s, or the earlier attempts of Walter Gordon, the Liberal finance minister from 1963 to 1965, to reverse the postwar trend to greater American ownership of large Canadian businesses.
The Liberals are quite right to call for clarification of the "net benefit" test in the Investment Canada Act and more disclosure of Investment Canada's procedures. Before the election, the Conservatives could well have accomplished this, and should have tried to amend the Investment Canada Act, by drawing upon the recommendations of the Competition Policy Review Panel of 2008, led by Lynton "Red" Wilson.
Immediately after the passage on foreign takeovers, the Liberal platform goes on to advocate the identification of certain sectors as Canadian champions. The designation of national champions, also known as the picking of winners, has long been a manifestation of economic nationalism, too. These champion sectors would be encouraged by new tax incentives - part of a pattern of violations of the principle of tax neutrality, of which both the Conservatives and Liberals are increasingly guilty.
The Ignatieff Liberals are far from the nationalistic socialism of the 1960s, and they profess their esteem for foreign investment - yet they are poised to take some steps in the wrong direction.