Jan 1, 2019
Shawn Denstedt, Vice Chair of Western Canada at Osler, tells Business in Vancouver that Canada should reexamine its foreign direct investment (FDI) approval processes to attract more FDI. In his article, author Chuck Chiang examines how there have been “rising concerns” over Canada’s “lack of competitiveness” as an FDI market, and the underlying reasons behind this. Shawn explains the implications.
“Some of our potential investors from Europe rank Canada as low as Iran and Kazakhstan in terms of [FDI approval] processes, and that’s not a good thing for Canada,” Shawn tells Business in Vancouver. “What we hear in particular is that the regulatory burden in Canada is material, and that discourages investment.”
Shawn also noted how “major projects that would take two-to-four years to go through Canada’s approval process would take six-to-nine months in a competing FDI market like Australia.”
Shawn explains how delays in Canada’s approval process can create uncertainty for the FDI market.
“Every time there’s a delay in getting projects approved, that costs them money,” Shawn tells Business in Vancouver. “Investors’ interest in Canada is still strong, but we are in competition with places like Australia and the United States, and I think it’s fair to say their regulatory burdens are less, and their processes have more certainty to them.”
Shawn also says that Canada needs to address its project regulatory approval process.
“What capital wants is certainty … It’s important to remember that energy and resource development in Canada is a regulated industry,” Shawn tells Business in Vancouver. “It’s not prohibitive, and we can still develop natural resource projects; so we should focus on the regulation of that industry, rather than the prohibition.”
For more information, read Chuck Chiang’s article “Canada needs to rethink anti-foreign investment rules: analysts,” in Business in Vancouver on January 1, 2019.