Foreign Direct Investment: A Survey of Canadian Research

Kenneth M. Glazier was Chief Librarian Emeritus at the University of Calgary, Alberta.

Canadians have an abiding interest in foreign direct investment — as evidenced by the controversy over the National Energy Program (NEP) and the Foreign Investment Review Act (FIRA) and the new Investment Canada Act.

This treatise was written by the well-qualified Professor A. Edward Safarian of the Department of Political Economy at the University of Toronto. He brings to the task many years of experience not only in the classroom but at international conferences. He surveys and assesses the recent contribution by Canadian economists to the theory and policy of foreign direct investment in the period of the 1970s and 1980s. Each of the main issues is given a separate chapter: the theory of direct investment, the effect of direct investment on economic growth and the balance of payments, the economic effect on the industrial structure and performance of a firm in terms of its imports and exports, the amount devoted to research and development, the social and political effects of a large multinational enterprise. All of these are pertinent as Canadians consider what is good for this country as well as what is good for the multinationals. It is coincidental that this review is being written in August 1985, when it has just been announced that Olympia and York, a Canadian company, have completed a contract for a controlling interest in Gulf Canada Ltd., a subsidiary of a multinational parent company in the United States, Chevron Corporation. Gulf Canada is the third largest oil company in Canada and will fulfill prematurely one of the main objectives of the NEP — to give Canadians at least a 50 percent controlling interest in its oil and gas industries.

The book is meant for economists and those who are interested in the points of view of a number of Canadian economists. It is a worthwhile brief study of a pertinent and complex problem.