Bank of Nova Scotia President and CEO Rick Waugh today called for an overhaul of policies to bolster Canada’s international competitiveness and urged both government and business to tackle these challenges as a key priority.

“Canada needs to orient a range of policies — market structure, competition, investment, trade — toward strategic sectors and the ability of firms to succeed as truly global competitors,” Waugh said in the Scotiabank’s submission to the federal government’s Competition Policy Review Panel. “At the same time, Canadian businesses need to be more aggressive in their pursuit of growth opportunities abroad.”

Waugh recommends that the government eliminate the specific ownership limits for banks and rely on the finance minister’s discretion to assess potential foreign bank investments.

“Eliminating the sectoral protections in financial services could increase the competitiveness of the market and maintain the legitimate goal of Canadian ownership of the banking system which, as in other jurisdictions, does not imply that all banks have to be Canadian owned,” he said.

Scotia’s submission praises the government’s management of Canada’s economic fundamentals, but indicates there is an important opportunity for domestic policymakers to take a global perspective in developing legislation and regulation to drive greater international competitiveness.

“There must be a far greater recognition of consolidation and other processes of global commerce in our domestic policy,” Waugh said. “As a smaller economy, we have to play to our strengths and build on strategic sectors and focus on priority markets.”

Scotiabank’s submission also recommends that the current trade and investment focus of the federal government on the Western Hemisphere become a long-term strategy.

“This means a stronger push, not only in trade and investment initiatives, but across Canada’s foreign policy, for more integrated relationships in North America, Central and South America and the Caribbean,” Waugh said.

In response to the Panel’s inquiry about whether Canadians should be concerned about foreign takeovers of companies here, the Scotiabank submission underscores the importance of viewing the debate around the “hollowing out” of corporate Canada from a much broader perspective.

“Considering how volatile annual M&A activity is, we are struck by the remarkable consistency in the fact that foreigners acquire larger companies in Canada than Canadians acquire abroad,” said Waugh. “Projected into the future, the recent trend suggests that Canada could become an incubator for global companies, which, by itself, will not be to Canada’s long-term advantage.”