Open this photo in gallery Minister of International Development Marie-Claude Bibeau, Minister of Finance Bill Morneau and French Ambassador to Canada Kareen Rispal listen during a meeting at the G-7 finance ministers summit in Whistler, B.C., on June 1, 2018. Ms. Rispal recently launched the France-Canada Innovation Platform to connect companies with academics and R&D experts in France and Canada. BEN NELMS/Reuters

When French bank Crédit Mutuel Alliance Fédérale embarked on a North American expansion more than a decade ago, its executives selected Canada as its continental beachhead. At the time, French entrepreneurs were itching for financing to pursue business opportunities in North America, but the bank’s private equity arm, CM-CIC Investissement, had no operations on this side of the Atlantic.

Its Canadian subsidiary, known as CIC Capital, first set up shop in Montreal and then in Toronto, using the latter as a gateway to the United States. CIC Capital has so far invested in 15 companies in Canada and the U.S. and has earmarked roughly $300-million for more investments.

“We cannot be in Canada without being in Toronto,” said Ludovic André, managing director of CIC Capital Ventures. “It is quite obvious that, economically speaking, you cannot just stay in Montreal. It doesn’t make sense.”

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CIC Capital is among a growing list of French companies eyeing new investment opportunities in Canada. Although Montreal has traditionally attracted the lion’s share of French business investment, entrepreneurs are shifting their focus to Toronto because it’s a portal to the U.S. market.

That trend is a gift for Canada’s next government since this country has long struggled to attract foreign direct investment (FDI). But the issue continues to get short shrift by federal parties during this election campaign, despite the last-minute jostling for votes. Unless there’s a mind shift in Ottawa, Canada risks squandering the potential for new FDI inflows that create jobs, fuel wage growth and reduce our dependence on the U.S.

“It’s true that the economic relations between France and Canada are strong. But if you put it in perspective, our trade between France and Canada represents only seven days of business between the U.S. and Canada," Kareen Rispal, France’s ambassador to Canada, said at this week’s France-Canada Innovation Forum in Toronto. "Obviously, there is room for improvement. And honestly, given our history, our values, we really can do more.”

Canadians, though, have a real knack for getting in their own way. Not only do we have a long-standing aversion to foreign money, we take a parochial view of globalization despite being a Group of Seven country.

For instance, although the Canada-EU Comprehensive Economic and Trade Agreement (CETA) went into force more than two years ago, Canadian companies have been slow to take advantage of its benefits, including increased labour mobility.

A closer look at business ties between Canada and France, two CETA signatories, bears out this point. As of August, there were roughly 1,130 French companies with subsidiaries in Canada employing 105,500 people, but just 250 Canadian companies providing 25,000 jobs in France.

Moreover, while French investment in Canada increased by 17 per cent to $13.5-billion in 2018, Canadian investment in France grew at a slower pace, 9.5 per cent, to $7.4-billion.

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“I am surprised to see that it is not that natural for Canadian entrepreneurs to consider Europe," CIC Capital’s Mr. André said. “Sometimes when we say, ‘You know, we can give you a hand in Europe,’ they’re like, ‘I am not comfortable. It’s too complicated.’"

Canadians also need to get out of their comfort zone when attracting more FDI – and not just from European countries. The next federal government can start by urging the provinces to dismantle internal trade barriers that prevent the free flow of goods, services and labour within Canada.

The Canadian Free Trade Agreement, which took effect in July, 2017, has been an abject failure. Not only does the deal protect government monopolies, it excludes key industries including alcohol. If left unchecked, these barriers will continue to drive away foreign investment.

“I think that doing business in Canada is difficult because each province has its own rules," Ms. Rispal said in an interview. “You have more and more [French] companies attracted to Ontario and other parts of Canada. … It’s a major shift."

Innovation is also key to encouraging more FDI. That’s why Ms. Rispal launched the France-Canada Innovation Platform this week. The platform, a corporate matchmaking service, connects companies with academics and R&D experts in France and Canada. It has been endorsed by companies including Power Corp. and CGI Inc.

The France Canada Chamber of Commerce (Ontario) is also working to strengthen business ties between the two countries. Brexit, after all, is presenting a unique opportunity as more businesses relocate to France. With London mired in chaos, Canada’s federal, provincial and municipal governments should organize a trade mission to Paris.

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Bless the French for taking action on this issue, and being candid about the need for change. For her part, Ms. Rispal has advice for Canada’s next government: “Go outside the U.S. Be interested by Europe. We have CETA. It’s a very mutually beneficial agreement, so we have to use it to make the most of it.”