As if on que to my May 31 post on foreign acquisitions (Eh-Rabs Buying Out Canada), Federal Finance Minister Jim Flaherty announced Ottawa’s intention to “draw up principles that more carefully spell out the grounds on which Ottawa could block unwelcome corporate takeovers by foreign, state-owned companies“. (Article – Globe & Mail)

This move is a welcome step to more clearly define what constitutes a ‘threat’ to national interests, which will hopefully curb knee-jerk opposition to takeover bids by certain foreign parties.

The G&M notes that “Under the 1985 Investment Canada Act, Ottawa screens foreign acquisitions according to whether they would constitute a “net benefit” to Canada.”

Hopefully the measure of this ‘net benefit’ is not suffering the effect of ‘Phantom GDP’, as coined in an investigative report written by Michael Mandel, Chief Economist of Business Week Magazine.