Conservative Leader Stephen Harper is vowing a Tory government would open up Canada's corporate sector to more foreign investment, including relaxing rules for outsiders buying into its airline and uranium industries.
But he's trying to balance this with a pledge to give tougher scrutiny to takeovers by non-Canadians, promising a new national security test for buyouts that might threaten the country's strategic interests.
"We are a party of free enterprise, free markets and free trade," Mr. Harper told a Halifax audience. "But we also believe a government needs to know when to be able to draw the line when any foreign takeover would jeopardize our national security."
The Conservative pledge is part of Mr. Harper's election strategy to position the Tories as the party best equipped to manage the Canadian economy, which is bleeding manufacturing jobs.
"We cannot necessarily rely on what worked in the past. We must ensure that our policies prepare us for the future," the Conservative leader said.
But NDP Leader Jack Layton said his party believes the government has not done enough to protect strategic Canadian industries.
"The law says that foreign take-overs should only be approved if they are in the interest of Canada. And what we've seen the Harper government do is authorize sell-off after sell-off," Mr. Layton told preporters after a town hall meeting with students at Memorial University in St. John's, Nfld.
"This concept of just throwing the doors open and letting Canadian resources disappear and Canadian jobs disappear, and let the chips fall where they may, is not a balanaced approach."
Mr. Harper said a new Tory government would raise the threshold for automatic government reviews of all foreign takeovers to $1-billion from the $295-million mark that exists today. This threshold would rise over four years after he took office.
A Conservative government would also seek to open Canada's airlines to more foreign ownership, raising the investment limit for outsiders to 49 per cent from 25 per cent.
But this would only apply to foreign jurisdictions — such as the European Union and the United States — once those nations granted the same rights to Canadian investors through bilateral negotiations.
The same would go for investments in Canada's uranium sector, where foreigners are prohibited from owning more than 49 per cent of companies. The Tories say they would remove this cap to allow majority ownership, but only for countries that give Canadian companies commensurate rights and benefits — and pass the new national security test they would put in place.
"We will allow [more] foreign ownership of uranium mining and producing provided that such investments meet a national security test and that Canada receives comparable benefits from investor nations," Mr. Harper said.
Uranium is a vital ingredient for nuclear power and weaponry. Current Canadian production is dominated by the two largest uranium mining companies in the world, Cameco and France's Areva SA.
Cameco spokesman Lyle Krahn said Mr. Harper's position is "consistent" with the Wilson report and added that "we indicated at that time that we supported the panel's overall thrust of increased competition to benefit Canadians."
Currently, the Saskatoon-based company is required under provincial regulations to maintain its head office in Saskatchewan, Mr. Krahn said. Federal rules, meanwhile, limit any non-resident investor to a maximum holding of 15 per cent of its shares and total foreign ownership to a maximum of 25 per cent of the votes.
Shares of Cameco and Denison Mines Ltd. of Toronto, a smaller uranium producer, climbed on the Toronto Stock Exchange on news of Mr. Harper's pledge. Cameco's shares climbed as high as $27.43, up 56 cents, while Denison jumped as far as $4.39, up 36 cents.
"There's a lot of consolidation going on in the [uranium] business, and we expect to see more. . .because junior companies, in particular, are having trouble getting financing," said mining analyst Raymond Goldie at Salman Partners in Toronto.
