Foreign state-owned firms will face more scrutiny when they apply for permission to acquire Canadian companies, Industry Minister Jim Prentice said Friday.

In a speech in Calgary, Prentice stressed that the Conservative government was not trying to discourage foreign investment.

"We are not — let me repeat, not — creating new obstacles or changing the government's policy on foreign investment," he said.

Instead, Prentice said new guidelines will "clarify" what state-owned foreign enterprises must show when they want to acquire a Canadian firm.

"The guidelines will simply underscore that sound principles of corporate governance and commercial orientation are considered when reviewing investments under the Investment Canada Act," he said. 

The new guidelines say foreign applicants should spell out:

• the nature and extent of control by a foreign government;
• the corporate governance, operating and reporting practices of the state-owned enterprise, and;
• whether the acquired Canadian business retains the ability to operate on a commercial basis.

Investment Canada's approval is required when any foreign enterprise wants to acquire a Canadian firm above a certain threshold, currently $281 million. Purchases are invariably approved.  

The only guideline a foreign applicant now faces when trying to buy a Canadian firm is that the acquisition be of "net benefit" to Canada.

Prentice said foreign state-owned firms will be encouraged to appoint Canadians as independent directors, and employ Canadians in senior management jobs. 

"What we're concerned [about] is that acquisitions by foreign governments are for commercial purposes," Prentice told CBC News.

Concerns have been raised that some state-owned enterprises — especially Chinese ones — might buy Canadian resource companies just to funnel the commodities they produce back to China at cut-rate prices to fuel its booming economy.

Prentice said foreign state-owned firms are responsible for only two per cent of foreign direct investment in Canada.

"However … direct investments by state-owned enterprises are set to rise rapidly," he said.

The new guidelines are meant to ensure that state-owned entities that come calling on Canadian companies are transparent and act in a commercially-responsible manner.

Prentice said "the vast majority" of state-owned firms don't pose problems.

He singled out Norway's Statoil as being the kind of state-owned foreign investment that Canadians should welcome. Statoil bought Calgary-based North American Oil Sands Corp. for $2.2 billion earlier this year.

Opposition critics were not impressed with the Prentice announcement.

"There's no teeth in what the minister is proposing today," said NDP MP Peggy Nash. "It's an insignificant announcement."

Liberal MP Dan McTeague agreed. "There are no new guidelines," he said. 

The Harper government is also looking at the possibility of bringing in new rules governing foreign takeovers that could pose a national security concern.