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Ottawa rejected BHP Billiton's $38.6-billion takeover offer for Potash Corp. of SaskatchewanTIM WIMBORNE/Reuters

The Harper government is injecting more transparency into Ottawa's process for reviewing foreign takeovers of Canadian companies, loosening a gag that has traditionally prevented his ministers from explaining why a deal was rejected.

The government is changing the Investment Canada Act to give the federal Industry Minister more freedom to talk openly about why he or she blocked a foreign takeover.

Prime Minister Stephen Harper is trying to boost investor confidence in Canada after a couple of rejected deals that sent confusing signals about this country's enthusiasm for outside investment.

In November, 2010, for instance, the government blocked one of the most controversial foreign takeovers in Canadian history and then gave conflicting explanations for its decision.

Gerry Ritz, the Conservatives' political minister for Saskatchewan, told the Commons at the time that rejecting BHP Billiton Ltd. 's $38.6-billion (U.S.) offer for fertilizer company Potash Corp. of Saskatchewan Inc. was an attempt to preserve international clout.

He said Ottawa regarded potash – a key ingredient in fertilizer – as a "strategic resource," suggesting that Ottawa was increasingly concerned that a hands-off attitude to foreign investment might not serve the national interest when it comes to supporting companies that have a dominant position in important sectors.

"From a strategic standpoint, I think we have it in spades here," Mr. Ritz told the Commons at the time.

But then-industry minister Tony Clement later backed away from the idea of potash as a strategic resource, pointing out the word "strategic" does not even appear in the Investment Canada Act.

On Friday, Industry Minister Christian Paradis said he hopes the changes will encourage outside investors to feel more confident about sinking capital into Canadian businesses.

"We want our foreign investment review process to continue to promote economic growth, job creation and prosperity in Canada," Mr. Paradis said in a prepared statement.

The changes announced would allow the Industry Minister to publicly disclose that he has sent notice to a foreign company that he is "not satisfied that the investment is likely to be of net benefit" to Canada.

"They would also allow the minister to publicly explain ... reasons for sending the notice as long as it would not cause harm to the Canadian business or the investor."

In 2008, the Harper government also surprised international investors by rejecting a bid by Minneapolis-based Alliant Techsystems Inc. to acquire the space division of Vancouver-based MacDonald Dettwiler and Associates Ltd.