Canada’s Foreign Investment Review Act and the Problem of Industrial Policy

The purpose of this article is to consider the Foreign Investment Review Act (FIRA or the Act) of Canada in the context of the continuing discussion in North America of the concept of “industrial policy.” The particular version of industrial policy of interest for this purpose is the concept which involves interventionist activity by the government designed to affect directly the economic activity of an industry, company, or plant. The first part of the article briefly describes the background and operation of FIRA. The second part comments on the concept of interventionist industrial policy as it has developed in Canada. Following this background, the article considers various aspects of FIRA as a vehicle for the formulation and implementation of industrial policy, In part III, a method of approach is suggested for dealing with two questions: the effectiveness of FIRA as an institution to implement foreign investment industrial policy, and the potential of FIRA as a model for a larger industrial policy institution.