Former Conservative cabinet minister Jim Prentice says strict rules on governance and investment transparency are needed if state-owned enterprises are allowed to move into Canada, but that the country cannot afford to turn its back on such opportunities.

In a speech to the Oil and Money 2012 conference in London, Prentice said current turbulence over investments by state-owned enterprises in Canada may have caught some in the international community by surprise.

However, Prentice, now a senior executive with Canada Imperial Bank of Commerce, said the controversy has been building for years.

It recently came to a head with a couple of major takeover deals — including the $15.2-billion bid by state-owned China National Overseas Oil Corp for Nexen Inc.

The bid, made last August, is still under review by Ottawa under the Investment Canada Act, which requires that major takeovers by foreign concerns are of "net benefit" to Canada.

More recently, the federal government turned thumbs down on a $6-billion offer by Malaysia's state-owned oil company, Petronas, for Canada's Progress Energy Resources. Petronas still hopes that deal will eventually be approved.

"This is a pivotal time for the Canadian government," Prentice told his audience while adding that Canada "must and will remain open for business and that means open to foreign investment."

Prentice said it would be "patently unwise" to turn down investment from countries like China, "particularly in circumstances where the transactions do not imperil Canadian values or environmental and labour laws," he said.

"Canada is aggressively engaged in diversifying its energy markets with an eye to Asia and with good reason," he said.

However, Prentice cautioned that it would be "naive" to think that the acquisition of Canadian energy resources by foreign governments or their surrogates would not raise public policy questions.

"While Canada is most definitely open for business, it is not for sale," he said.