The long anticipated report ("Report") of the
Competition Policy Review Panel (the "Panel") entitled
"Compete to Win" released in mid-summer may well have
been sub-titled "Send us your money: we're open for
business". Indeed the opening paragraph of Industry
Canada's News Release was refreshingly candid, articulating
that the intention of the series of recommendations was aimed
"making Canada a more attractive destination for talent,
investment and innovation, as well as a sweeping national
competitiveness agenda based on the proposition that Canada's
standard of living and economic performance will be raised through
more competition in Canada and from abroad."
More than a year in the making after extensive research and
consultation, the report focussed on three broad main areas: a)
liberalizing investment restrictions; b) modernizing the
competition/antitrust regime; and c) creating an internationally
competitive business environment.
As to liberalizing investment restrictions, the Report advocated
amendments to the Investment Canada Act in a number of key
areas, including raising the threshold for review to $1 billion
(Cdn) enterprise value (from $295 million (Cdn) in 2008) with
application to all noncultural sectors. However, of even greater
interest, and somewhat unanticipated, was a recommended reversal in
the onus of establishing "net benefit to Canada" from the
foreign investor to the Industry Minister where a matter
is reviewable. With respect to specifically regulated
sectors, the Panel also exhorted liberalization of investment
restrictions by: allowing up to 49% foreign ownership of airline
carriers on a reciprocal basis; allowing foreigners to establish
and acquire domestic telecom companies with less than 10% market
share, and after additional review, further liberalizing investment
restrictions in telecom and broadcasting; removing the de
facto prohibition on mergers of large financial institutions;
and liberalizing the foreign ownership restrictions in the uranium
As to modernizing Canada's antitrust regime, the Panel
recommended changing the review process to more closely mirror the
U.S. model, which will be very welcome from a timing perspective
for cross-border M&A transactions. Another change aimed at
moving closer to the U.S. antitrust regime would see replacing
existing conspiracy provisions relating to hard core cartels with
per se offences, such as price fixing. Other practices,
such as resale price maintenance and predatory pricing would be
decriminalized. Industry-specific rules and penalties would be
repealed and a general penalty for abuse of dominance violations
would be introduced.
Lastly, the Report addressed a number of key public policy
priorities for action including: taxation (lowering corporate and
personal income taxes, eliminating capital taxes, harmonizing
provincial and federal commodity taxes); talent (greater
specialization in post-secondary education, reforming immigration
processes); corporate governance (putting directors of Canadian
public companies on a similar footing with their Delaware
counterparts in respect of fiduciary duties in acquisition
proposals); Canada-U.S. economic ties (dealing with Canada-U.S.
border "thickening" as a trade imperative); and
international trade and investment (establishing a timeline to
conclude key bilateral trade and investment agreements with
The Panel's recommendation for the creation of an
independent Canadian Competitiveness Council with a broad mandate
to advocate competition in both the public and private sectors is
intended to move the competition agenda forward. Depending upon the
outcome of the recently announced federal election, it can be
expected that a number of the Panel's recommendations in the
Report will receive legislative priority in the next
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