Canada Enacts Significant Changes to its Foreign Investment Laws
Catherine Pawluch, Kevin Wright, Jonathan Gilhen, Aug 30, 2010
A foreigner considering an investment in Canada might understandably be overwhelmed (and potentially deterred) by the complex regulatory framework governing the potential investment. In addition to the myriad of sector-specific restrictions on foreign ownership, such investments may also be subject to review under the Competition Act to ensure competition is not "lessened or prevented substantially" and a general review under the Investment Canada Act ("ICA") to ensure the investment is of "net benefit" to Canada.
In July 2007, the Government of Canada established the Competition Policy Review Panel ("Panel") to study and make recommendations on improving Canada's competitiveness in an increasingly global marketplace. In its final report titled Compete to Win, released on June 26, 2008, the Panel made a significant number of recommendations including amending the ICA and other legislation and changing how such legislation is administered. Among the Panel's recommendations were proposed amendments to the ICA to narrow its scope generally and the introduction of an explicit screening mechanism for investments raising national security concerns.
This article provides a brief overview of amendments to the ICA designed to implement the Panel's recommendations, and highlights some other recent developments in Canadian foreign investment law.