State Investors: On The Rise And Under Scrutiny

Foreign state investors are on the rise and on a buying spree. Oil-rich countries and others with unprecedented trade surpluses are moving their investment portfolios away from conservative treasury bills to higher yielding equity investments. While a global phenomenon¹, these state-owned entities (or SOEs) have attracted the scrutiny of Canadians in the wake of a record-breaking rash of takeovers of Canadian icons by foreign investors, some of them SOEs. Concerns about increasing foreign state control of Canadian companies and natural resources spurred Canada's Industry Minister to announce that the Government would review this fall the need for special guidelines on Canadian investments by state-owned entities as well as consider the inclusion of a national security test in the Investment Canada Act (the "ICA"), Canada's foreign investment review legislation.