LONDON, UK—In order to allow state-owned enterprise (SOE) to invest in Canada, public policy must ensure that foreign investments adhere to strict standards of governance and transparency says Jim Prentice, vice chairman of CIBC.
In a speech to the Oil & Money 2012 conference in London, Prentice told audience members that ‘turbulence’ in Canada over SOEs may have surprised the international business communities, but that there was obvious and escalating public concern about SOE investments.
“This controversy has been building for years,” said Prentice. “And it achieved a force in recent months that can be fairly said to be turbulence. This is because of two proposed investments in Canadian energy companies by two State Owned Enterprises – Petronas from Malaysia and CNOOC from China.”
He noted that “this is a pivotal time for the Canadian government”.
Canada must consider its policy on foreign investment in light of the growing and evolving role of SOEs in Canada’s oil and gas industry, he continued. It must, however, remain open for business—in other words: open to foreign investment.
“Saying “no thanks” to the largest new market opportunity, namely China, would be patently unwise, particularly in circumstances where the transactions do not imperil Canadian values or environmental and labour laws.
Prentice did, however, caution that it would be naïve to think that the acquisition of Canadian energy resources by foreign governments or their surrogates would not raise public policy questions.
“While Canada is most definitely open for business – it is not for sale,” he said.