Live free or die - leave markets free to avoid limiting growth

    TORONTO, June 25 /CNW/ - Total first quarter equity issuance in Canada -
at $16.7 billion - rose 44.0 per cent over last quarter and 36.2 per cent from
a year ago, according to a report released today by the Investment Industry
Association of Canada. The Association's quarterly Review of Equity New Issues
& Trading attributed the robust capital markets activity in common and
preferred share issuance, and in trading, to soaring oil and metal prices and
stellar merger and acquisition activity.
    In the first quarter, mergers and acquisitions more than doubled to
$66 billion. The number of foreign acquisitions rose 11.1 per cent over the
same quarter in 2006, while the value of the takeovers increased by nearly 50
per cent to $15 billion.
    Globalization has deepened some fears that Canadian companies will be
lost to foreign firms, leading to a "hollowing out" of corporate Canada as
head office jobs may be lost. Ian Russell, President and CEO of the Investment
Industry Association of Canada, disagreed: "Calls to protect Canadian firms
are misguided - we cannot deal with the possible downsides of globalization by
standing beside the world shouting `stop!'"
    Russell explained, "By restricting foreign ownership, ultimately we would
be restricting ourselves. We could be constraining access by Canadian
companies to risk capital sometimes only available in sufficient quantities
from outside Canada's borders. Equally short-sighted, often we would be
protecting inefficient management and preventing shareholders - such as
Canadian pension plans and other Canadian investors - from getting the best
possible price for their shares."
    "Removing the `free' from free markets risks limiting growth," Russell
concluded. "New evidence suggests globalization has actually mitigated the
overall severity of volatile economic cycles that over time have sometimes
penalized Canadians and Canadian companies."
    Visit for the Association's commentary and statistics in its
quarterly publication Review of Equity New Issues and Trading. On June 26,
2007, Ian Russell is presenting his perspective on how hollowing-out-of-Canada
concerns ring hollow at the Economic Club of Toronto.

    The Investment Industry Association of Canada, formerly the industry
association arm of the Investment Dealers Association of Canada (IDA),
advances the position of the Canadian investment industry on regulatory and
public policy issues. As the professional association for the industry, the
Investment Industry Association has a mandate to promote efficient, fair and
competitive capital markets for Canada while helping its member firms across
the country succeed in the industry.

For further information:

For further information: Annie Côté-Kennedy, Director, Public Affairs,
Investment Industry Association of Canada, (416) 687-5474,

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Investment Industry Association of Canada (IIAC)

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