Vanderbilt Journal of Transnational Law


Susan D. Romer

First Page



On June 30, 1985 the Canadian Government enacted the Investment Canada Act (ICA), evoking a sigh of relief from the United States in vestment community. ICA replaced the Foreign Investment Review Act (FIRA). Burdensome Canadian regulations have impeded foreign investment in Canada throughout the last two decades. FIRA, in particular, blocked the free flow of foreign investment into Canada. In contrast, ICA's primary goal is "to encourage an inflow of capital and technology into Canada." As a result, United States investors have openly embraced ICA's arrival.

Once the initial euphoria wanes, however, and the United States investment community encounters ICA regulations, the advantage over FIRA may prove minimal for the foreign investor. Both of these legislative barriers to foreign investment originated from a "historical context as a uniquely Canadian type of nationalist program" which some commentators call "ultranationalism." Specifically, "Canadian nationalist[s][were concerned] about the impact that direct investment by United States firms was having on the Canadian economy." This sentiment, which affects Canadian political, social, and economic policy, may ebb, but it is unlikely to disappear. A careful comparison of FIRA and ICA shows that although ICA contains less government regulation for the foreign investor, the gates of Canada are still far from open.