Foreign Control Of Canada Declining? No Way

The Corporations Return Act report (CRA) leaves the impression that the share of the foreign control of corporate assets has declined, even though there has been a steady gain in the share of foreign-controlled revenue. Something is very wrong. The CRA reports that in 2000 foreign assets were up by only $16 billion (2%) in 2000. Contrast this with data from the Investment Review Division of Industry Canada, a very reliable source, which shows that in 2000 foreign assets grew by an all-time record of over $102.3 billion and that there were an all-time record of 509 takeovers of firms in Canada by non-residents that year. Keep in mind that the $102.3 billion reflects the book value of the assets acquired, not the usually much higher actual purchase price. Nor does it reflect two of the largest sources of the expansion of foreign assets, funds raised in Canada for acquisitions (e.g. The Montreal Canadians, Teleglobe, Shoppers Drugmart etc.) by foreign corporations and retained earnings. Huge as the $102.3 billion is, it still is far less then the true value of the expansion of foreign assets. Looking at Statistics Canada's publication Canada's Balance of International Payments we find that the net flow of foreign direct investment in 2000 was a staggering $98.94 billion and the long-term inflows into Canada for sales of existing interests in Canada amounted to over $87.5 billion. Both of these figures were records well over double those of previous years. In short, take with a grain of salt headlines suggesting that "Foreign control of Canada declining." Quite the opposite is true. Mel Hurtig Edmonton