Etobicoke North MP Roy Cullen's private member's bill to guard against foreign takeovers of Canadian industry seen as contrary to the national interest received first reading in federal Parliament this week.

Proposed legislation Bill C-386 amends the Investment Canada Act. It would give the federal government power to veto any transaction involving the takeover of a Canadian company, if the government deems it is not in the national interest.

"I think we need to have a conscious debate in Canada over these foreign takeovers," Cullen said. "It's not easy, because we want to encourage foreign investment in Canada. But as it stands now, the Investment Canada Act doesn't really have any teeth. It has never rejected a bid - ever."

The Investment Canada Act has not been significantly changed since it was introduced in 1985.

Cullen spoke to The Guardian Wednesday from his office on Parliament Hill before heading to Montreal to attend the federal Liberal leadership convention. Cullen is supporting frontrunner Etobicoke-Lakeshore MP Michael Ignatieff for leader.

Cullen's proposed legislation would amend the current Investment Canada Act to:

n create new criteria for foreign companies wanting to acquire Canadian companies;

n call for a new "national interest" test;

n require a mandatory cabinet decision on any deal valued at $1 billion Cdn. or more;

n the new regime would be for use at the discretion of the minister of industry on any takeover of a Canadian company.

The Liberal MP said he is especially concerned about natural resource companies, including those in oil and gas and forestry.

Cullen said his bill was prompted by the recent high-profile takeovers of Inco Ltd. and Falconbridge Ltd. So concerned, he wrote an open letter to Industry Minister Maxime Bernier urging the government ask whether those takeovers were in Canada's interest.

"Because of the strength of commodity prices in Canada for minerals, oil and gas, countries and companies want to acquire these resources and assets," he said. "We should be asking ourselves: do we want to have all these Canadian companies taken over by non-Canadians? We should be saying no to some of them, in my opinion."

Presently, foreign takeovers are happening by "default," Cullen said: "We're not having discussions about (bids). The Industry Canada branch is basically a rubber-stamping operation."

The former Liberal government tabled changes to the act - including giving the government power to consider whether any transaction was in the national interest. But the order paper died on the table, without debate, when the House was dissolved for the 2006 federal election.

Last week, the Conservative government quietly floated plans to block takeovers and investment from foreign state-owned firms if it detects a threat to Canada. Finance Minister Jim Flaherty's economic plan says Ottawa "needs a principle-based approach" to deal with cases where foreign investment could damage Canada's long-term interests.

The Conservatives have not tabled legislation to that effect.

Debate on Cullen's private member's bill will likely occur in parliament next year.