The document provides an overview of the Foreign Investment Protection Act (FIPA) in Canada. It discusses how FIPA aims to protect foreign investors and encourage foreign direct investment. Foreign direct investment is important for Canada's economy as it provides capital for growth and jobs. However, some criticize FIPA for making Canada vulnerable to lawsuits from investors under trade deals. The presentation gives context on globalization and Canada's rates of foreign direct investment inflows and outflows.
3. Disclaimer
• This presentation is on view of trade data for Canada. It is up to
individuals to do their own research as part evaluating government
polices and their impact on the markets.
4. Paul Young - Presenter
Bio
• CPA/CGA
• 25 years of experience in Academia, Industry and Financial solutions
• Youtube Channel -
https://www.youtube.com/channel/UCAArky1bAXPSuV2NLtUnyLg
8. Foreign Direct Investment
• A foreign direct investment (FDI) is an investment made by a company
or entity based in one country, into a company or entity based in
another country. Foreign direct investments differ substantially from
indirect investments such as portfolio flows, wherein overseas
institutions invest in equities listed on a nation's stock exchange.
Entities making direct investments typically have a significant degree
of influence and control over the company into which the investment
is made. Open economies with skilled workforces and good growth
prospects tend to attract larger amounts of foreign direct
investment than closed, highly regulated economies.
9. Why is FDI important to Canada
• Canada has limitation on access to capital (small market)
• Foreign companies want to invest in countries with stable
government
• Foreign companies want to expand their business opportunities as
way to provide better shareholder value.
• Shareholder value impacts the stock market which then impacts pension
funds
11. Government Policies
• Trade/Investment Deals
• Regulatory Environment (Environmental assessments, health and
safety, etc.)
• Innovation funds (Aerospace, Automotive, Forestry, Southern Ontario
Development and other funds)
• EDC (Export Development Corporation)
• Provides funding/support to export driven companies
12. Lawsuits/FIPA/Trade
• In two decades Canada has lost lawsuits, however, the money is
peanuts in terms of the overall spending.
http://www.huffingtonpost.ca/2015/01/14/canada-sued-investor-
state-dispute-ccpa_n_6471460.html. I quoted Huffington Post as way
to show the LPC bias towards the lawsuit. This article says 20 years as
such it goes to show with all the trade over the past 20 years the
value of the lawsuits is peanuts. Let’s say exports are $400B on
average for 20 years then that means 8 trillion of exports and only
$175M in lawsuits. I think that is a pretty good loss ratio, right?