Canada plans to liberalise foreign investment rules in its key uranium sector, in what could be seen as good news for India which recently inked a pact to reopen nuclear technology trade with Ottawa.
The government will "ensure that unnecessary regulation does not inhibit the growth of Canada's uranium mining industry by unduly restricting foreign investment," Governor
General Michaelle Jean said in an address to Parliament.
Right now, foreign ownership of uranium mining projects in Canada is capped at 49 per cent unless a local partner cannot be found.
Other countries have similar or more restrictive rules, many of which date back to Cold War-era concerns about nuclear weapons proliferation.
Canada's move, outlined briefly in a government policy speech, comes as countries such as India and China embark on ambitious civil nuclear programmes that are predicted to
stretch uranium demand beyond current supply capacity.
Both countries could seek access to Canadian uranium, particularly with India having recently signed an agreement to reopen nuclear technology trade with Canada.
The government's move comes after Red Wilson's competition policy review panel recommended it in 2008.
However, the panel said that liberalisation should happen only if other countries open their markets as well. That was a key request from Cameco Corp., the world's biggest uranium
miner.
Right now, Saskatoon-based Cameco is forbidden from investing in many countries because of foreign investment restrictions.
Its Chief Executive Jerry Grandey has said it would be a mistake to change Canada's current policy "without demanding benefits flowing in the other direction."
"We're hopeful that the government supports the principle that if other countries come here to do business, Canada should receive reciprocal benefit in return," said Cameco spokesman Lyle Krahn.
The government's proposal, however, got a big thumbs-up from the Canadian Nuclear Association, which said it could greatly improve the competitiveness of the industry.
Along with liberalising the uranium sector, the government said that it would "untangle the daunting maze of regulations that needlessly complicates project approvals" in Canada's broader resource sector.
The plan is to replace them with "simpler, clearer processes" that would provide "improved environmental protection" and greater certainty to industry.