2015 was not the kindest to the Canadian dollar as it saw its
value depreciate by 15% when compared with the U.S. dollar. Despite
the weakening Canadian dollar, Canadian companies remained
undeterred in their pursuit of foreign acquisitions. According to a
recent Bloomberg study, in 2015, Canadian companies
acquired $205 billion worth of assets, almost triple the prior
year's amount and almost double the previous peak of $112
billion in 2007.
Canadian institutional investors have been the primary driver of
this activity. As a result of volatile market conditions and slow
domestic growth, Canadian pension funds have sought to diversify.
In particular, as noted in Crosbie & Co.'s 2015 Q4 M&A Report, Canadian pension funds
have looked to acquire infrastructure and real estate assets in
higher growth markets.
This strategy appears to have been effective. According to
research by RBC Investor & Treasury Services Canadian
pension funds achieved a return of 3.1% in Q4 of 2015 and finished
the year with an annual return rate of 5.4%.
Whether this trend continues into 2016 is uncertain. On the one
hand, the persistence of a low-growth environment should continue
to push Canadian institutional investors to diversify globally. On
the other hand, sustained slumping in the global leveraged-finance
markets may inhibit overall M&A activity. Whatever the case,
the relationship between the Canadian dollar and outward M&A
activity is worth paying attention to in 2016.
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Under the Income Tax Act, the Employment Insurance Act, and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions or GST.
Under the Income Tax Act, the Employment Insurance Act, the Canada Pension Plan Act and the Excise Tax Act, a director of a corporation is jointly and severally liable for a corporation's failure to deduct and remit source deductions.
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