Brian Mulroney says Canada needs foreign investment for future growth

CALGARY – Canada — and especially the West — can’t function without foreign investment, former prime minister Brian Mulroney said Tuesday as observers were still digesting Ottawa’s surprise rejection of a Malaysian company’s takeover of Calgary-based Progress Energy Resources.

“The oil and gas industry requires massive foreign investment to develop the oilsands and other major projects,” Mulroney told reporters before delivering a speech in Calgary.

“So obviously I’m very much in favour of foreign investment because it also gives the opportunity to Canadians to invest elsewhere around the world, which Canadians do in huge degrees and vast sums. So you need that freedom of movement.”

While in office, Mulroney scrapped the Foreign Investment Review Agency in 1985 and brought in the Investment Canada Act — the legislation under which Malaysian state-owned Petronas was rebuffed and China National Offshore Oil Co’s controversial $15.1-billion takeover of Calgary-based Nexen Inc. (TSX:NXY) is currently being weighed.

“The government appears to be looking for a little running room so as to bring in a new piece of legislation that would cover the new circumstances that have developed in the last 25 years in respect of foreign investment,” he said.

“So I think that given those realities, the government is proceeding with deliberate speed and care and concern and I’m sure we’ll have answers to these matters in the near future.”

Prime Minister Stephen Harper promised on Monday to issue new guidelines “soon” on foreign takeovers amid growing unease following his government’s rejection of the Progress (TSX:PRQ) deal.

Meanwhile, Mulroney didn’t say which candidate he favours to win the U.S. election next month, but said the odds are good for TransCanada’s contentious Keystone XL pipeline to connect oilsands crude to U.S. markets.

“I think if (Republican contender Mitt) Romney is elected, it’s approved right away and if Mr. Obama is returned, it will be approved in the fullness of time,” he said. “This is a no brainer. This is a no brainer, and it has to be approved. and I think it will be.”