Recent foreign takeovers of significant companies, including Alcan, Falconbridge, Inco, and Four Seasons Hotels, have grabbed Canadians’ attention, raising fresh worries over whether Canada is being “hollowed out.” Does the pace of foreign direct investment threaten our economic independence?

For the period 2001-2007, Canada ranked only 25th among 98 countries in its openness to world markets as measured by cross-border investment flows as a percentage of GDP. For inbound investment flows alone, it ranked 47th. Canada should look to dismantle barriers to both inbound and outbound...