Of the top 100 non-financial multinationals in the world, ranked by assets in 1994, 32 have US and 19 have Japanese parent companies, 15 are in the ELECTRONICS INDUSTRY, 12 in the AUTOMOBILE INDUSTRY and 11 in the PETROLEUM INDUSTRY. Canada has 3 firms among the top 100: The Thomson Corporation, SEAGRAM and ALCAN. In total, 1565 parent firms reside in Canada (out of a world total of 38 747), and there are 4708 affiliates of foreign firms in Canada (out of a world total of 265 551). Among the largest firms operating in Canada are the affiliates of foreign multinationals such as GENERAL MOTORS OF CANADA LIMITED, which is a subsidiary of General Motors, the world's largest industrial corporation. While foreign multinationals have set up subsidiaries in Canada, Canadian multinationals have also established subsidiaries abroad, and this has been a growing trend since the mid-1980s, especially with investment in the US.
Multinationals have come under scrutiny in Canada and elsewhere for their economic, political, social and cultural impact on host countries. Less developed countries argue that they have traded political independence for economic and cultural dependence. Politically, there remains concern over the extent to which multinational corporations are used as instruments of foreign policy by the governments of countries where parent companies are located. Culturally, the concern is over the loss of national identity.
In Canada and elsewhere, hostility to multinationals has been replaced by measures to promote the inflow of foreign direct investment. The FOREIGN INVESTMENT REVIEW AGENCY, created by the Liberal Trudeau government in 1973, was empowered to screen acquisitions and new foreign investment. The Conservative Mulroney government replaced it by the Investment Canada Act in 1984 with the mandate to attract foreign investment. In 1996, discussions were underway in the Organization for Economic Co-operation and Development on a Multilateral Agreement for Investment which would establish an international framework of rules for multinationals.
Author C.J. MAULE
United Nations Conference on Trade and Investment, World Investment Report (1996); S. Globerman, ed, Canadian-Based Multinationals (1994); Lorraine Eden, ed, Multinationals in North America (1994).
Links to Other Sites
The online home of TMX Group, which owns and operates the Toronto Stock Exchange and the TSX Venture Exchange. For real-time and historical market data, sector profiles, and financial information about listed companies, click on listed company directory on left side of page or enter stock symbol in the search box.
Check out the latest financial news at the "Globe Investor" website from The Globe and Mail newspaper.
The lastest news on Canadian equity markets, personal investment plans, and more. From thestar.com.