Canada is a country of vast resource wealth, ingenuity and know-how. As President of the Canadian Chamber of Commerce, I am delighted every day to learn of a new product, patent, invention, or innovation. Sadly, I am also reminded every day of the significant gap that remains between our commercial aspirations and the capital required to nurture and fuel those aspirations.

To be sure, Canada has many great sources of investment, from our large pension funds to gutsy risk capital boutiques. However, just as any investor must diversify his or her investments, so must these institutions. To cite but one example, the Canada Pension Plan Investment Board has announced investments in real estate in London and New York, and in toll highways in Australia. Just as Canadian capital must find returns all over the globe, so do strategic buyers all over the globe find opportunities in Canada.

If Canada is to succeed as a trading nation whose investors are allowed to seek opportunity and returns abroad, so must we allow foreign firms to seek opportunities in Canada.

One such case, much discussed, is the possible takeover of Potash Corp. by BHP Billiton, an Anglo-Australian company.  Potash Corp. is a large, successful and well-run company whose shareholders themselves want the right to decide who will own it.  Whoever owns Potash Corporation, they will do their mining in Saskatchewan, under terms imposed by the provincial government.

No one should doubt that the stakes are high.  Large-scale foreign investments are only allowed after a review by the federal government that ensures a net benefit to Canada in terms of employment, economic activity, technology development, productivity and competition. Given the scope of this transaction, this review is no doubt being conducted with rigour by Investment Canada.

Thanks to the last budget, the government will now be obliged to release the reasons for its ruling—a major improvement in transparency. If it decides to block a transaction, it will have to explain those compelling reasons publicly.

Some people argue that the sale of Potash Corp. to a non-Canadian company is unacceptable in principle. Such a policy would carry a heavy price, not just for the shareholders whose investments would be devalued, but for all Canadians.

More importantly, Canada’s mining sector would suffer. Mining, perhaps more than any other sector, is a multinational industry.  There are 130 international mining companies listed on the TMX Group’s equity exchanges, more than any other exchange group in the world, with a market cap of $52 billion. Half of all mineral exploration projects held by TSX and TSX Venture Exchange listed mining companies are outside of Canada.

Canada is the pre-eminent centre for mining finance. The TSX and TSX-V are home to 55% of the world’s public mining companies, with more than 1,400 firms listed on these Exchanges. In 2009, 84% of all mining financings globally were completed on the TSX and TSX-V.

One of Canada’s great contributions to the world has been to create and recreate mining companies that bring prosperity to their shareholders and the communities in which they operate - both at home and around the world.  Canadian firms operate using sustainable practices and modern mining innovations.

Canada’s standing in the international investment community is a true strategic asset.  It has been built carefully over many decades but its value can be hurt in an instant.   As in so many other sectors, Canada’s openness has helped domestic companies in all sectors buy assets overseas, while its stability and transparency has made it a preferred destination for investment.

So it bears repeating: the people who bought and own the shares of a corporation are entitled to sell it as they chose.  If any government wants to interfere with that right, it must only do so on grounds that are clearly defined and extremely compelling. 

This is a major transaction for Saskatchewan and for Canada. But the issue is even bigger than the transaction. Canada must be open - and be seen to be predictable - to the foreign investment that has contributed to prosperity for all Canadians.

*This opinion editorial appeared in the November 1, 2010 edition of The Financial Post.