Close economic ties and interdependence between the US and
Canada have been bolstered by free trade policies and intensified
global competition, paving the way for continued opportunities for
US businesses to tap into the Canadian market. These opportunities
have resulted in an active cross-border lending market. In light of
this, US lenders who are lending into Canada may encounter, and
should be aware of, Canadian-specific legal issues and
considerations.
Our guide summarizes the fundamental elements of secured lending
in Canada, including regulatory matters, tax, taking security and
insolvency and restructuring.
I. Regulatory Matters
Under the Bank Act (Canada) (the
"Bank Act"), a "foreign bank"
is not allowed to engage in or carry on business in Canada except
as authorized by the Bank Act (for example, through a foreign bank
subsidiary or an authorized foreign branch). The term "foreign
bank" is broadly defined in the Bank Act to include any entity
that, in
