Tag archives: FDI

National security guidelines shed light on Investment Canada review process

On December 19, 2016, the Government of Canada issued long-sought guidelines to help foreign investors and their advisors understand the national security review process under the Investment Canada Act (ICA). Following amendments to the ICA in 2009 the government has had the explicit authority to review investments in Canadian businesses by non-Canadians to determine whether they “could be injurious to national security,” a term that was not defined in either the statute or the accompanying regulations.

Given the subject matter, both the previous and current governments have maintained that they are often constrained in what they can tell foreign investors … Continue Reading

2015 reform of Investment Canada Act now paying dividends in form of inward foreign direct investment

As we await Q3 statistics on Canada’s inward and outward foreign direct investment (FDI), the rebounding numbers in Q1 and Q2 have represented a step in the right direction. FDI is a macroscopic measure of private investment (in contrast to portfolio investment) and includes among other types of investment, mergers and acquisitions. The rebounding comes after a 2015 Q4 that saw inward FDI dip below $5 billion for the first time since 2011, while setting a historical high of $22.4 billion earlier that year in Q2. Strong inward FDI figures from Q3 will likely strengthen Canada’s attractiveness as … Continue Reading

New merger review thresholds for Competition Act and Investment Canada Act

The threshold for certain pre-closing net benefit reviews under the Investment Canada Act (ICA) and the threshold for a pre-closing merger notification under the Competition Act have been increased for 2016.

Competition Act

Canada uses a two part test for determining whether a pre-merger notification is necessary. The two-part test is based on the size of the parties and the size of the transaction. The transaction size component can be adjusted annually for inflation. Under the size of the parties test, the parties, together with their affiliates, must have aggregate assets in Canada or annual gross revenues from … Continue Reading

Higher Investment Canada Act & Competition Act Thresholds for 2012

 Under the Investment Canada Act, Canada’s foreign investment review law,  the direct acquisition of control of a Canadian business by a non-Canadian from a WTO-member country is subject to pre-closing review and approval where the assets of the acquired business exceed a prescribed threshold.  Effective February 25, 2012, that threshold is $330 million, up from the 2011 threshold of $312 million. 

Under the Competition Act, Canada’s antitrust law, there is a two-part test for determining whether a pre-merger notification is necessary. The test is based on the size of the parties and the size of the transaction.  Under … Continue Reading

PM’s Words Add Confusion to Investment Canada Act Debate

Apparently drawing inspiration from the opening lines of British stand-up comedian Alexie Sayle’s 1985 hit, Canadian Prime Minister Stephen Harper has again waded into the issue of foreign investment in Canada.  Harper’s is the only government to have used the Investment Canada Act to reject an announced acquisition of a Canadian business, first in 2008 and then again in 2010. Following the latter, BHP Billiton’s proposed hostile take-over of Potash Corporation, the government announced its intention to “clarify” the criteria used to evaluate transactions.  More than a year later, no clarification has been provided.

Government officials, including the … Continue Reading