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.
The jump in Denison's share [price, he added, was "an appropriate reaction, because it is a takeover candidate." But Mr. Goldie said Cameco is a "big exception." "Even if they were to eliminate the federal regulations on its ownership, the government of Saskatchewan owns a 'golden share,' and we understand that the effect of that would be to block any foreign [takeover]."
There was also a little pop in the shares of both ACE Aviation Holdings, the parent of Air Canada, Canada's biggest airline, and with those of smaller competitor WestJet Airlines of Calgary.
ACE's class B share jumped as far as $9.88, up 25 cents, while WestJet climbed 17 cents to a morning high of $14.97.
Both airlines applauded Mr. Harper's pledge.
"Air Canada has long advocated increased foreign ownership limitations for Canada's airline, and welcomes the Prime Minister's announcement," spokesman Peter Fitzpatrick said. "Increased foreign ownership will provide Canada's airlines with enhanced access to capital."
"We support the increase to 49 per cent," WestJet spokesman Robert Palmer said. "In general, we support opportunities that enable additional investment in Canada."
Mr. Harper is taking his cue in some of these recommendations from a June 2008 report prepared for the federal government called Compete to Win that recommended giving foreign investors more room to invest in Canada as way to stimulate economic growth. The study, which had been commissioned by the Tory government, was chaired by Lynton (Red) Wilson, a former chairman of BCE Inc.
But the Tories are steering clear of any pledges on far more controversial ideas such as allowing bank mergers or opening up Canada's telecommunication sector to more foreign investment.
The Conservative Leader said he realizes the Wilson report also called for loosening restrictions on banks and phone companies, but he said he doesn't think Canada is ready for that.
"We understand why the Wilson report recommended proceeding with liberalization in the area of banking and telecommunications. We don't believe the marketplace is ready for that ... so we are not proposing to move forward with those recommendations," he said.
Mr. Harper also defended the tone he's set as Conservative Party leader and prime minister in light of two nasty attacks by Tories this week.
A senior staffer was suspended Thursday after he wrote CTV an email disparaging the father of a slain soldier as a Liberal partisan.
And on Tuesday, Mr. Harper was forced to apologize after his campaign broadcast an Internet ad of a bird defecating on Liberal rival Stéphane Dion's shoulder.
Asked if he regrets setting a bad example over the last few years by frequently responding to criticism with attacks on the critic, Mr. Harper rejected the premise of the question. He said he said he and his ministers have behaved better than opposition parties when it comes to debate in the House of Commons.
"I think if you look at Question Period objectively, day in and day out, there is much more substance for the most part in the replies than there is in the questions," Mr. Harper said.
He excused any fierce partisanship as the exception and "the cut and thrust of debate in the House of Commons."
Mr. Harper acknowledged he might have conducted himself differently in some cases but cut short any stock-taking of his behaviour.
"Would I do some individual things differently? Yeah. Maybe, but … I don't need to become my own critic and analyst," the Conservative leader said.
"I have the entire Press Gallery to do that job and you do such a wonderful job of it I wouldn't want to steal that occupation from you."
- With files from Gloria Galloway
- Click on placemarkers to learn more about each campaign stop and what happened (all times are local).
- Navigate with the arrow buttons, or zoom in and out with the + or - buttons.
- For a more detailed view, click on the link above labelled "view larger map."
