On March 30, 2012, Federal Finance Minister Jim Flaherty said his government would not block a
foreign takeover of Research In Motion, and RIM
would be the master of its own destiny. The Minister of Finance is
not responsible for theInvestment Canada
Act (that is the purview of the Minister of
Industry), and the comment was made without reference to precisely
what kind of deal would be on the table, nor presumably what impact
such a takeover would have on Canada. That being said, it was
welcome news to investors as the share price reportedly rose 7% on
Ottawa did intervene to stop a bid by
Australian mining giant BHP Billiton for Potash Corporation of
Saskatchewan Inc. in late 2010 following stiff opposition by
Saskatchewan Premier Brad Wall, several other provinces and even
business leaders. Stikeman Elliott acted for PotashCorp in that
Minister Flaherty's comments appear to indicate that, in the
post-Potash world of foreign investment review, the federal
government is taking a more pro-active approach to demonstrate that
Canada is still open for business.
Still, they come on the heels of Prime Minister Harper's comments in
February to the effect that hostile transactions
and bids for technology companies in which the government had
invested might face a rough ride.
Since the ICA came into force a quarter of a century ago, over
99% of reviewable transactions have been approved. In fact, the bid
for PotashCorp was just the second time that a proposed foreign
acquisition has been turned down by the Canadian government (other
than when a "cultural business" was involved). The first
such rejection involved Alliant Techsystems Inc.'s bid for the
information systems division of MacDonald Dettwiler and Associates
Ltd. That bid was reasonably well-understood by the investment
community as having been based on national security grounds,
because of the military use of some of the technology involved.
Prime Minister Harper's comments had led some to speculate
whether a bid for RIM would be rejected out of hand by Ottawa,
speculation that Minister Flaherty's comments appear designed
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The Canadian Office of the Superintendent of Financial Institutions ("OSFI") recently ruled that a bank cannot promote comprehensive credit insurance ("CCI") within its Canadian branches under the Insurance Business (Banks and Bank Holdings Companies) Regulations (the "Regulations").
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