Government proposal will add considerable uncertainty to the foreign investment review process

Shuli Rodal

May 5, 2013

Shawn McCarthy, The Globe and Mail

(Extract)

The federal government is poised to pass Investment Canada amendments that will broaden its definition of “state-owned enterprises” and could subject SOEs’ acquisitions of minority stakes in Canadian companies to investment reviews to determine whether they represent a net benefit to Canada.

In a written analysis, lawyers at Osler Hoskin & Harcourt LLP say the amendments will add considerable uncertainty to the foreign investment review process for companies that have close ties to foreign governments – even if they are not state-owned – and go beyond what Ottawa promised last December when it first announced heightened foreign-investment scrutiny for state-owned enterprises.

Osler partner Shuli Rodal said the proposed amendments to the Investment Canada Act remove “safe harbour” assurances that allow foreign companies to acquire less than one-third of voting shares, or a minority interest in a trust, partnership or joint venture, without triggering Investment Canada review.

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