Against state interests

The Globe and Mail reports on the Cons' plan to clarify the "net benefit" standard applied to foreign investment reviews. And true to form, Jim Flaherty is making it clear that he isn't particularly concerned about job losses or economic harm, as long as government ownership isn't part of the picture:

The Harper government plans to draw up principles that more carefully spell out the grounds on which Ottawa could block unwelcome corporate takeovers by foreign, state-owned companies as part of an upcoming review of the Investment Canada Act.

Finance Minister Jim Flaherty, who laid the groundwork for this in a fall 2006 economic blueprint, said in an interview that he thinks Ottawa's current “net benefit test” used to evaluate foreign takeovers lacks sufficient definition and that the Conservatives plan to remedy this.

Asked if he believes there's a need to increase protection for Canada in foreign investment screening, Mr. Flaherty said Ottawa must bear in mind that there are foreign, state-owned firms looking for acquisitions which may be beholden to another government's agenda.

“I think there's a need to look at the world as it is and the fact that there are some [corporate] entities that have less independence than others from their states,” Mr. Flaherty said in an interview...

One concern the Conservatives are targeting is foreign, state-owned firms with murky business structures.

They say they fear Canada's long-term interests could be hurt by investments from such companies: ones with “unclear corporate governance and reporting” that are guided by “non-commercial objectives.”

Note that there's no particular reason why even the stated reasons for targeting state-owned entities should result in a limited review: presumably there are plenty of privately-owned investors which could also pose concerns about security and/or opaque governance. But Flaherty doesn't seem to have any apparent interest in those broader issues...just as long as there's no government ownership involved.

Of course, given the Cons' interest in selling off whatever isn't nailed down by a minority Parliament, ownership by foreign states may seem like a distant issue for Canadians. But Flaherty's position offers another hint of the knee-jerk suspicion of government that explains so much of what the Cons do - and again begs the question of why Canadians should want their government in the hands of a party which sees it as a negative force.