Front Burner - Who owns Canada's economy?

Episode Date: October 1, 2026

Prime Minister Mark Carney has been working to bring more foreign investment into Canada. At his recent Investment Summit, he told investors from all over the world that Canada “has what the world wants." This got us wondering, who already owns Canada's businesses and infrastructure? And could that change now that the government is courting more outside investment? Earlier this year, Marc Lee, a senior economist with the Canadian Centre for Policy Alternatives, wrote a piece called “Masters in our own house”, where he looked at how much of our economy is owned by foreign entities. He talks about what a new wave of foreign investment means for our sovereignty.For transcripts of Front Burner, please visit: https://www.cbc.ca/radio/frontburner/transcripts

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Hey, everybody. I'm Jamie Poisson. Just over two weeks ago now at his big investment summit in Toronto, Prime Minister Mark Carney told investors that Canada... Has what the world wants. According to the PMO, the summit led to nearly $500 billion in new investment commitments. Virtually all of that money is Canadian money, mostly from banks and pension funds. But there were plenty of foreign investors at the summit, too,

including sovereign wealth funds from China, the UAE, and Norway. According to RBC, roughly 40% of attendees were from the U.S. That had us wondering, who owns Canada already? And could that change now that the government is courting more outside investment? Mark Lee is a senior economist with the Canadian Center for Policy Alternatives, a Progressive Research Institute. And earlier this year, he wrote a piece called Masters in Our Own House, where he looked at how much of our economy is owned,

by foreign entities. The Prime Minister has famously told Donald Trump that Canada is not for sale. But now he's asking investors to peer in our shop window. So what does this new wave of foreign investment mean for our sovereignty? Mark, thanks so much for being here. Hi, thanks for having me. In the lead up to his big investment summit, Mark Carney said that he's trying to attract a trillion dollars in investment, a lot of which presumably will have to come from foreign investors, maybe a big American firm like BlackRock or a sovereign wealth fund from the Middle East. Our goal is to catalyze $1 trillion of investment in Canada over the next five years. In energy, in transportation, in tech and data, in defense and beyond.

What's the strongest case for what Carney is doing right now? Why are people excited about foreign investment? Prime Minister Carney's Investment Summit looks like a great success. And, you know, it's largely positioned in response to, to the trade war we're experiencing with the United States. We're, of course, trying to offset that trade with the United States, with trade with other partners in Europe and Asia as well. And there's been some success with that.

But the United States looms so large in that overall picture. And then the other way of offsetting it in our GDP accounting is with increased investment. So that could be domestic investment. It could be investment through the public sector. It could be investment through the private sector. I think there's an element here. year of repatriating Canadian capital, not just seeking foreign capital, because most people might think of Canada as still like a net recipient of foreign capital, but in fact, we are our net

owners of capital outside of the country. That's the United States and the rest of the world, almost $2 trillion of net assets that we own less, the assets that are owned here. So foreign investment, of course, is part of the picture because it's a bit of an all of the above strategy coming from the Prime Minister to really rally a lot of investment in Canada to develop our external markets and to develop our internal economy. So a lot of what we're seeing is kind of a pitch from the Prime Minister, promoting Canada, exuding confidence in the country as a destination for new investment. We are blessed with many commodities and capabilities in Canada, but we have earned our most valuable asset, which is trust. And just why not try to do

it with all Canadian capital? Like, why even seek the foreign capital? It's this all of the above strategy, you know, trying to crowd in as much investment as possible. To some extent, you know, we should be seeking more the return of that Canadian capital than more foreign investment. But, you know, like Prime Minister Carney comes out of Goldman Sachs. He's a former central banker in Canada in the United Kingdom. He has a political network in global finance and international politics. So he's leveraging that network, you know, essentially it's the Davos elite, but leveraging that network towards bringing new investment to Canada. Now, there's a lot of spin in that as well. You know, that $500 billion claim that was made is a pretty dubious number. I mean, this is basically the banks and pension funds saying that they're going to invest in Canada, but that's their core business.

That's what they already do. If they weren't going to be doing that, that would be a major shock. And the idea that this is somehow incremental to the capital that they would have already invested in Canada, you know, it doesn't really pass the smell test in my opinion. So there's a lot of spin coming from the prime minister as well. On the foreign capital, do you have a sense of which projects foreign investors might be interested in which ones they'll likely avoid? because there was this prospectus circulating at the summit that listed all these possible investment opportunities, right? LNG projects, pipelines, nuclear power plants, data centers. Right. I mean, well, let's start with the one project that was not in the investment deal book, which is airport privatization, the plan to partially privatize the operations of the four largest airports in Canada. Vancouver, Calgary, Toronto, and Montreal International airports are now open for private investments.

To provide better passenger service, to reinvest in our regional airports, to reinvest in other forms of transportation infrastructure. And so I think this is the type of investment or foreign investment that actually doesn't make sense. It's not building any new airports or any new infrastructure. It's just creating a profit stream for those investors, whether they're domestic pension funds or foreign investors. So, you know, we should be careful around what we are asking for out of that. But in terms of the deal book itself, a lot of the projects are mining projects, you know, in areas like critical minerals, but also gold and copper. You know, those are potentially valuable if they're part of a broader strategy. Oil and gas is huge in this.

And we already saw, you know, just the other day, LNG Canada committing to a few. Phase 2 investment in Northern British Columbia in excess of $30 billion. It will connect low-cost, low-carbon, Canadian energy to global markets. It'll provide secure supply, our partners in Asia and Europe need. That's very appealing to the BC and federal governments. The challenge with oil and gas is it's extremely capital intensive. So you create a lot of jobs when you're building the facility. So thousands of jobs associated with building, the original LNG Canada terminal, a new pipeline that had to connect out to Kedomat, a new electricity infrastructure.

So there's a short run bump in terms of that capital and the jobs that are created, but over the longer term, it's a more dubious investment. And then it starts to actually tap a lot of the natural gas supply that would normally go to British Columbians. Does that push up domestic prices? Does it affect supplies available to British Columbia? So I think my concern is that we're chasing too much of the old stuff, you know, the oil and gas and mining. And we're not looking to future opportunities. And yes, in the deal book, there were some talks about advanced manufacturing and clean energy, but they're very, very small relative to the total in terms of the dollars that we're contemplating for investment. And I just wonder if you could make it a little bit more tangible for me. Like, what does it actually look like when we sell a

stake in a pipeline to a foreign buyer? Well, I mean, there's pipelines, there's like LNG terminals. There's different structures. So, for example, with LNG, Canada, that is a consortium led by Shell, but it also has the major Asian importing companies, you know, in China and Malaysia and Japan and Korea. They're all part of the consortium as the buyers. So it makes a lot of sense for that to come together because they're essentially locking

down natural gas supply for many decades into the future. Pipelines, you know, it depends. Right now, there's not a lot of private sector interest in investing in a new West Coast oil pipeline. So if it's going to go ahead, it looks like the federal government is going to be putting up the money to get it built in the same way that we did with the Trans Mountain Pipeline expansion. I want to pick up on a point you made earlier about the airports. Not all foreign investment is created equal, essentially. I've seen people making this distinction between investment that builds versus investment that buys. Can you give me an example or more examples of each of those and how they're different? Sure. I mean, generally economists will differentiate between portfolio investment and direct investments. So portfolio investment is when you're buying like stocks in a company. You're buying shares, you know, on the market.

Direct investment is actually building mills, factories, you know, facilities where you are making stuff. So there's two, you know, different pieces to that. Now, like some direct investment, you know, maybe there's a bit of portfolio investment in there as well. But really, we're more interested in that direct investment side. So, you know, if foreign capital is coming to Canada and it's creating a new facility that's leveraging Canadian resources, it's creating jobs, they're paying taxes and royalties to governments, you know, they become, quote unquote, good corporate citizens. And it's part of a broader strategy for developing the Canadian economy or even just regional economies, then that can make a lot of sense. The portfolio capital tends to be more footloose, you know, based on changes in sentiment, fear and greed that drive the financial, market. So that is generally less desirable.

Carney has been saying that foreign direct investment is the highest it's been in 20 years. Last year, there was almost $100 billion. But nearly half of that was from mergers and acquisitions. In other words, Canadian businesses being acquired. And so is it fair to say that this kind of investment isn't really building anything here at home? Yeah, I mean, that's ultimately the key. We want foreign investment to the extent that it is building things, that is like expanding our economy and creating jobs for Canadians and revenues to Canadian governments. So if it's meeting those tests, then it can be all right. But we do need to sort of think about, you know, long-term issues like profits flowing outside of the country. Do you need to think about how does that foreign investment affect domestic consumers and businesses and the prices that they have to pay for those?

are we getting sort of locked into situations where we lose some of that going to other jurisdictions? Or does it, you know, impact our ability to make political decisions and exercise sovereignty, you know, particularly in areas like climate change and energy policy, you know, where we've seen the fossil fuel industries play a very effective game, you know, stalling and delaying any progress that was made on key issues that would affect their business interests, as you would expect them to do? And really now they've waded out that period where Canada was being a bit more aggressive on climate and energy policies. And now, you know, we've basically thrown a lot of them out the window.

So the disproportionate influence of the oil and gas industry in particular is something we need to keep our eye on. When you're leading a business, you're always thinking about doing more. At BDO Canada, we work with business leaders to do more by truly understanding what matters most to you. Your challenges, your ambitions, your version of more. Whatever your more is, BDO is a true partner to help you get there. After all, do is in our name. Find out more at BDO.ca. BDO, do more together.

The following is paid content for Desjardin. Lately, it feels like everyone has a take on Gen Z. There's a misconception that everybody in our generation wants things handed to them, which is so unfair. A lot of the circumstances that other generations got to have, we simply do not have. So when Disserdin asked me to go out and hear directly from young people, I was all in. Because between sky high rent, $10 lottes and the AI Revolution, got a lot to unpack. We went out to see what Gen Z's reality actually looks like, and we made a web series out of it.

It'll be on CBC Gem. It's called Countess In, and honestly, I think you guys are going to love it. Let me ask you about this piece that you've wrote. earlier this year, where you combed through the data on who actually owns Canadian industry and resources. And just tell me what you found, which industries have the most foreign ownership? Right. I mean, concern around foreign ownership goes way back in Canada. And there used to be a really robust debate in the 60s and 70s about this. And I think in response to that, there was a bit of a shift towards, you know, more Canadian ownership of the assets of like big industry. So

When you look economy-wide at, you know, the private sector, it's actually pretty high share of Canadian assets, like, you know, 86%. So that is sort of the good news. But it's in certain key areas where we see a lot of foreign ownership. And, you know, the majority of that is American ownership, but other countries involved as well. So manufacturing and wholesale trade are probably the two largest in terms of measurement. You know, in these areas, it's fairly substantial foreign ownership. Largely, I think, because of the evolution of supply chains, where we have a lot of the sort of cross-border trade moving between Canada and the United States. The other major areas is just resource extraction. So mining, oil and gas, you know, these are areas where

there are substantial American interests and foreign interests overall. So those are the main. ones. And it's kind of what we've always sort of suspected even, you know, back many decades ago. It's, you know, it's resource extraction for foreign interests. And then it's sort of manufacturing as it's related to these cross-border supply chains. So like cars? Cars, absolutely. Yeah. Yeah. A study found that now almost 60% of Canadian oil and gas companies are owned by U.S. funds. I just, like, how does that all complicate our understanding of what constitutes a Canadian resource? If American funds own 60% of our oil companies, can we even call it Canadian oil? Yeah, I mean, that is a great question.

That needs to be part of the public debate because I think a lot of the rhetoric we hear politically is very kind of wave the flag oriented. It's like, yeah, Canada is a trading nation and we have these trading partners. and if America's not going to be our trading partner, we'll just trade with other partners. Like, it's this kind of bravado associated with it. But then if you actually peer a little closely, it's like, well, who's actually on Team Canada anyways? You know, who owns these resources? Is there a point where foreign investment becomes foreign control?

Like, would a 60% ownership qualify? In terms of controlling a particular company, it's 50% plus one. And when we think about an industry writ large, you know, it's harder to say. It really depends on like what the ultimate policy objectives are in that area. So for example, there's a very high percentage of foreign ownership in mining. And some of that might be fine. But we also need to think about like, what's the whole supply chain here with mining? Are we just extracting some basic materials like copper?

And then they're actually processed outside of the country. country. You know, in aluminum, we don't actually mine the bauxite itself. We just have really cheap electricity in kidomat. And so as a result of that, we are able to process aluminum. But then when it comes to our, you know, our cans after, you know, you drink your soda, those get sent to the United States for recycling. So there's a lot of these things where, like, if we had a more coherent approach to creating full Canadian supply chains, then we would, essentially control our destiny more. And, you know, in some cases, that may be shifting to Canadian ownership, but it may also be public ownership in key strategic areas. You know, oil and gas is a

classic example of that because, you know, most countries in the world have the equivalent of a Crown Corporation, a public enterprise that controls the production and export of that industry. And as a result, those countries capture a lot more of the value that's created from that enterprise. Mark Carney did announce this Canada Strong Fund, right, in April, which is ostensibly a sovereign wealth fund. A sovereign wealth fund is essentially a national savings and investment account. It's designed to grow wealth for future generations of Canadians. We will begin with an initial endowment of $25 billion. Over time, the fund will grow through asset recycling and reinvestment,

creating even greater opportunities for future generations. But lots of experts said it doesn't really look like anything like a conventional sovereign wealth. How is it different? Well, I think the idea with the sovereign wealth fund is that you're taking part of the government's share of those economic rents, you know, from the extraction and production and export of that resource. And then you're keeping that and investing it for the long term. You know, ideally in things that will be relevant, you know, after the age of fossil fuels is passed, if that ever comes to be in, we ever do take climate change more seriously. What we're calling a sovereign wealth fund in Canada isn't actually doing that.

It's more the government just putting general revenues on the table and seeking to crowd in various private investments. So it's not actually that different than what the government's already been doing with the Canada Growth Fund or the Canada Infrastructure Bank. A lot of it's based on this idea of putting a little bit of public money on the table and then crowding and the others. It's a very different kind of modality than what we saw. Norrie, even Alberta has obviously a more diminished version of that, but they, you know, they've had this heritage fund, which tries to do some of that as well. We've been talking about foreign ownership or crown ownership. What about indigenous ownership? Like, how does that fit into this picture?

Yeah, that's a really interesting one because I think the federal government is really keen on getting indigenous equity stakes into major projects. So that could be the proposed West Coast oil pipeline. The project I said no one wants to invest in, well, the government is saying, well, look, we'll sell. you know, First Nations across Canada up to a 15% stake. It's not clear on how much they're going to sell that for. And then they'll also put some other money on the table for First Nations. So they've been creating these structures, including through the Canada Infrastructure Bank, that provide loans to First Nations so that they can buy equity stakes in these big pipeline and other oil and gas projects. And at some extent, you know, given needs for reconciliation, and if indigenous nations want to be part of that, it's hard to argue with their decision making on that. But I would say, you know, caveat emptor, you know, buyer beware.

There's a reason why a lot of private sector companies are not at the front of the line in making these investments. You mentioned that in the 70s we were pretty worried about foreign ownership. And then in 1985, we created the Investment Canada Act. And that act basically said, we're going to review any foreign acquisitions of Canadian companies with more than $5 million in assets. Pag to inflation, that number should now be around $13 million. But the threshold is actually more like $2 billion now for American buyers. And just why is the threshold so high now? And have there been consequences to that?

I mean, the Investment Canada Act is a legacy of those debates around. foreign ownership that we had in the 60s and 70s and concerns that too much of the Canadian economy was foreign owned, in particular American owned. So there were a number of initiatives like that, including the development of Petro Canada and other Crown corporations. But a lot of that shifted in the 1980s under the Mulroney government when there was much more pushed towards free trade and deregulation and measures to improve the quote unquote investment climate so that more foreign investment would come here. So the overall regime in Canada has been very pro-foreign investment.

We do have the ability to block takeovers if they are affecting strategic areas. And we have blocked two Chinese acquisitions in recent years. I would argue the $2 billion threshold should be changed. It should be really open to anything because there could be a lot smaller investments in very strategic areas like, you know, critical minerals, you know, they don't meet the threshold necessarily, but they could actually create a bottlenecks that we would worry about from a domestic supply perspective. AI also feels like a pertinent one here. It has a lot of strategic importance. And maybe like the canonical example is from 2013 when, when Jeffrey Hinton, one of the

godfathers of AI, sold his startup to Google for 44 million bucks. But that kind of thing, has continued to happen, right? In August, for example, the American semiconductor company AMD bought a Toronto AI chip startup called Talas. And Vast Bedner, who's been on the show several times before at the Canadian Shield Institute, says that these kinds of companies are all valuable parts of the AI value chain. But none of these acquisitions were given a second glance by the federal government because they fall under, according to her, economic inflated review threshold, right? Do we need a different threshold for these kinds of companies, AI critical minerals, data centers, is a financial threshold, even the right tool here?

I think a financial threshold can be a guideline. But yeah, ultimately we need to think on a case-by-case basis of how those acquisitions are going to affect the Canadian economy. And in particular, like strategic technology sectors are ones we should really be the most cautious about. I think with the AI stuff, I mean, there's the AI itself. And then there's just the raw compute power of data centers. So I think what we're going to be seeing more of is big investments in data centers to take advantage of cheaper electricity options in Canada. So, I mean, even I think Scott Moe and Saskatchewan was talking about building out nuclear power.

Today we are announcing plans to build about 2,600 megawatts of nuclear generation by the year 2050. To put that into perspective, 600 megawatts can power the equivalent of Saskatchewan's two largest cities, Regina and Saskatoon. 2,600 megawatts could power the equivalent of 2.6 million homes. Even though it would completely dwarf the needs of the million people, who live in Saskatchewan, but this is clearly a bid to attract data centers there. It's about economic growth and opportunity for future generations. It's about jobs and very real careers right here at home. Now, do those actually create benefits in terms of revenues going to governments and total number of jobs? What are the impacts on the electricity, infrastructure,

and water, and things like that? So all of these need to be part and parcel of this broader consideration. And I think the danger in things like Bill C-39 or last year's Bill C-5, which attempt to fast-track all of these decisions, is that we leave the public interest at the side because we're chasing the investment so badly. The big question for me in all of this is, is this undermining our sovereignty? Like Carney has said that Canada is not for sale. Well, at the same time trying to sell stakes in key infrastructure projects and natural resources. And can we really be open for business and not for sale at the same time? I don't think so. You know, like you said it at the top of the

show, 40% of either the money at the investment summit were actually from the United States. Do we want to just pivot from U.S. ownership than to ownership by European companies or, you know, Asian companies, I think, you know, it brings a number of the same risks associated with impacting our sovereignty. And, yeah, at the end of the day, our ability to make decisions that are in the broader interest of Canadians, those could be around climate change and energy. They could be sort of other environmental issues and health impacts. You know, like we've seen a number of those in the case of LNG Canada up and Kittamat, when as it started up, impacts on workers. you know, what does that actually all mean? And do governments then have the capacity or the wherewithal to go toe to toe with a big transnational company?

I think we do need to think more about broader like industrial policy and a big part of that are the supply chains and making sure that we can build as much as we can in Canada for the Canadian market. Those are the really key pieces. You know, if that is the overall push from the federal government and there's a little bit of foreign investment that is souping that up on the sidelines, I think that's perfectly fine. But if the main objective is foreign investment and selling off chunks of Canada in order to get capital in today just to, you know, improve the political fortunes of the federal government at the expense of losing sovereignty long term, then it's not a good bargain. Mark, thank you so much for this. Really appreciate it. All right, thanks for having me on. All right, that is all for today.

I'm Jamie Poisson. Thanks so much for listening. Talk to you tomorrow. For more CBC podcasts, go to cbc.ca.ca slash podcasts.