Canada's rules for foreign investment must be made clear, or companies will take their money elsewhere, the head of the Canadian Chamber of Commerce said Wednesday.

Perrin Beatty, the organization's president, says the Investment Canada Act uses language that's too vague and open to interpretation.

The act says the government can block takeovers over a certain value if they aren't of "net benefit" to Canada, but doesn't explain what that means.

Beatty said it's only fair to make clear the rules for investors.

"An investor doesn’t want to be embarrassed by making a bid that ends up being turned down by government. They want to know where they stand. If there’s too much uncertainty, they’ll take their business elsewhere, take their investment elsewhere," he said.

"It’s simply a matter of fairness, it’s a matter of giving some certainty to investors about what they’ll be facing."

Last week, Prime Minister Stephen Harper told Reuters that takeovers of critical technology in which the government has invested or of key Canadian companies aren't in the country's best interest.

Beatty said the government could intervene in strategic areas, but those should be spelled out in advance.

"Those exceptions that we make should be few and far between, they should be clearly spelled out in advance, and people need to know where they stand."

In 2010, the government intervened to block BHP Billiton from taking over Potash Corp. The furor led to calls to clarify the term "net benefit" but so far there has been no change.

Barriers to competitiveness

Beatty made the comments as he released the Canadian Chamber of Commerce's report on 10 barriers to competitiveness.

The organization is focusing its attention in 2012 on skilled labour and is working with Human Resources and Skills Development Canada, as well as Citizenship and Immigration Canada.

Beatty said Canadians have to stop undervaluing the skilled trades, which are urgently needed to help Canada's productivity. There's also a need to upgrade employees' skills.

Other measures cited by the report to improve competitiveness include:

  • Employment insurance reform with a national standard for eligibility and duration, as well as equal premiums for employers and employees.
  • A simplified tax code.
  • Break down barriers between provinces, including regulations that block labour mobility and trade.
  • Stimulate private sector spending to match government spending on research and development.