"The oil and gas industry requires massive foreign investment to develop the oilsands and other major projects," Mulroney told reporters before delivering a speech in Calgary hosted by St. Francis Xavier University.
"So obviously I'm very much in favour of foreign investment because it also gives the opportunity to Canadians to invest elsewhere around the world, which Canadians do in huge degrees and vast sums. So you need that freedom of movement."
While in office, Mulroney scrapped the Foreign Investment Review Agency in 1985 and brought in the Investment Canada Act — the legislation under which Malaysian state-owned Petronas was rebuffed and China National Offshore Oil Co's controversial $15.1-billion takeover of Calgary-based Nexen Inc. (TSX:NXY) is currently being weighed.
"The government appears to be looking for a little running room so as to bring in a new piece of legislation that would cover the new circumstances that have developed in the last 25 years in respect of foreign investment," he said.
"So I think that given those realities, the government is proceeding with deliberate speed and care and concern and I'm sure we'll have answers to these matters in the near future."
Prime Minister Stephen Harper promised on Monday to issue new guidelines "soon" on foreign takeovers amid growing unease following his government's rejection of the Progress (TSX:PRQ) deal.
There is still hope Petronas and Progress may still get their deal done, as Industry Minister Christian Paradis gave them 30 days to address problems and send their proposal back to Ottawa.
Meanwhile, Mulroney didn't say which candidate he favours to win the U.S. election next month, but said the odds are good for TransCanada's contentious Keystone XL pipeline to connect oilsands crude to U.S. markets.
"I think if (Republican contender Mitt) Romney is elected, it's approved right away and if Mr. Obama is returned, it will be approved in the fullness of time," he said. "This is a no brainer. This is a no brainer, and it has to be approved. And I think it will be."
In his speech, Mulroney touted the free trade deal his government signed with the United States about 25 years ago — particularly the economic benefits to Alberta.
Recently deceased former Alberta premier Peter Lougheed — "perhaps the greatest Albertan of them all," according to Mulroney — was a strong proponent of free trade, he noted.
"Peter saw free trade as the means of ending the hammerlock that the East exercised over trade from the West," said Mulroney.
"He also knew that privileged access to the U.S. market would provide Alberta and the West with powerful economic gains that would sustain growth and prosperity here for generations to come — and he was right."
Mulroney recalled hearing the mantra "the West wants in" decades ago, but said the West was already in during his time in office.
"That chant became part of the mythology of Canadian politics in which, like all myths, the truth became the first and most important victim. And why? Because the West was in fact already in and had been since the day our government took office on September 17th, 1984."
Mulroney said Westerners occupied top posts in his government, which abolished the National Energy Program, moved the National Energy Board's office from Ottawa to Calgary and privatized Petro-Canada.
"I think that any objective informed observer would be hard pressed to find another federal government in the 145 year history of Canada that did as much or more than ours to ensure that powerful action and results were delivered to Alberta and her citizens and in the process of doing that, all we were doing was render justice to the people of Alberta."
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