Canada to Consider Amendments To Foreign Acquisition Rules

Originally published in Blakes Bulletin on Competition, June 2007

Earlier this year, The Honourable Jim Flaherty, Minister of Finance, announced that the Government will review the rules governing foreign acquisitions. It will also consider, among other things, Canada’s competition policy. The review will be conducted by a panel of experts who will be appointed by Industry Minister Maxime Bernier. The panel is expected to issue its report prior to the release of the next federal budget.

Currently, the acquisition of control of a Canadian business, and the establishment of a new Canadian business, by a non-Canadian is subject to the Investment Canada Act. Where certain thresholds are exceeded, the acquisition of a Canadian business is subject to substantive review on grounds of whether the acquisition is “likely to be of net benefit to Canada”. National security is not one of the factors considered under this test.