The Canadian government has used the Investment Canada Act to block the proposed acquisition of the Allstream division of Manitoba Telecom Services Inc. by Accelero Capital Holdings for national security reasons. On October 7, 2013, the Minister of Industry, James Moore, issued a brief statement in which he noted:
MTS Allstream operates a national fibre optic network that provides critical telecommunications services to businesses and governments, including the Government of Canada.
No further details or reasons were provided.
This represents at least the second transaction to have been blocked for national security reasons by the Canadian government under Prime Minister Stephen Harper. The first was in 2008 when U.S.-based Alliant Techsystems Inc. attempted to acquire the space division of MacDonald Dettwiler and Associates Ltd.. That transaction was blocked over concerns for Canadian sovereignty, and pre-dates the addition of a formalised national security mechanism to the Investment Canada Act. The first use of those new powers was in 2009 when Canada blocked the sale of a Canadian company that owned a uranium mine in Africa.
Additional information about the Investment Canada Act and the national security review process is available in our Doing Business in Canada guide.