The new Liberal cabinet and government sworn in today may signal
the start of important developments around the scrutiny of foreign
investment reviews under the Investment Canada Act.
What You Need To Know
Net benefit reviews in high-profile cases will still be
influenced by the political implications of approval, but newly
sworn-in Minister Navdeep Bains and the public service are likely
to be given more autonomy to administer the Act. In their tenure
the Conservatives had a centralized decision-making process that
showed a particular sensitivity to popular opinion and other
general concerns regarding investors from China and certain other
countries. Although Liberal investment policy will evolve over
time, early signs suggest a different approach. Prime Minister
Trudeau has said he will be "open to global investment"
and the Liberals may choose to back this up by making specific
policy changes, such as reversing or softening the effective bar on
State Owned Enterprise investments in the oil sands and adopting
more open engagement with China.
National Security reviews will continue. We have seen a
dramatic rise in the number of reviews since national security
powers were introduced in 2009, with numerous investments blocked
by cabinet order. The number of reviews is unlikely to change under
the Liberals, but there may be an increased willingness to approve
investments conditionally (rather than block them) based on nuanced
assessments of risk.
Foreign investments in cultural businesses may attract more
attention and scrutiny. Under the previous Conservative
administration, discretionary reviews of acquisitions in the
cultural sector were rare and approvals commonplace. This marked a
significant shift from the policy approach of governments that came
before them, which have traditionally taken a greater interest in
preserving cultural businesses. That traditional concern could
resurface under new Minister of Heritage Mélanie Joly.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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