Vanderbilt Journal of Transnational Law

First Page



Canadians have written many volumes about their relative inability to preserve their domestic economy from the deepening entanglements of American foreign investment. They cite such highly visible names as Exxon and General Motors for special notice since their Canadian subsidiaries dominate their respective local industries. Canadian nationalists fear that these firms as well as others from the United States will rejuvenate the now discredited continental thesis, which calls for the economic merger of Canada and the United States into one highly-integrated North American market. So uneasy are Canadians about potential American challenges to their sovereignty that they have resurrected mercantilistic ideas long thought to be dead and buried. These nationalists are interested in "state-making," and to achieve this end they have established federal and provincial state enterprises to counter the influence of American controlled subsidiaries in their domestic economy. As a part of this strategy, these nationalists have sponsored the passage of a foreign investment code, which will require American investors in Canada to form participation arrangements and joint venture agreements with Canadian businesses and state enterprises. No longer is investment in Canada a relatively simple decision for Americans, for the new Canadian business-government relationship alters former preconceptions. The scope of this article encompasses the changes that have occurred in American-Canadian relationships, the impact of these changes on the business-government environment in Canada, and the future for present and prospective United States investment in the Canadian economy.