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ARTICLE · 20 MAY 2020

Canada To Increase Scrutiny Of Foreign Backed Takeovers

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On April 18, 2020,the Investment Review Division ("IRD") of Science and Economic Development Canada released a policy statement announcing that the Government of Canada will be subjecting...

CanadaGovernment, Public Sector
Matthew Barnes
Matthew Barnes
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On April 18, 2020,the Investment Review Division ("IRD") of Science and Economic Development Canada released a policy statement announcing that the Government of Canada will be subjecting certain foreign investments into Canada to enhanced scrutiny.

This enhanced scrutiny is a COVID-19 response measure meant to protect Canadian businesses that have seen a recent decline in valuation from opportunistic investment behavior (i.e. the takeover of Canadian companies by foreign investors).

Under the Investment Act Canada (the "Act"), the Government can review investments where the Minister of Science and Economic Development believes the investment could be harmful to Canada's economic or security interests. In its statement, the IRD announced that the government will be paying particular attention to foreign direct investments in Canadian businesses that are related to public health or are involved in the supply of critical goods or services. Neither the Act nor the

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