Copyright 2009, Blake, Cassels & Graydon LLP
Originally published in Blakes Bulletin on Competition, Antitrust & Foreign Investment, August 2009
MELANIE AITKEN APPOINTED COMMISSIONER OF COMPETITION
Canada's Minister of Industry, the Honourable Tony Clement, announced today the appointment of Ms. Melanie Aitken as the Commissioner of Competition (head of the Canadian Competition Bureau) for a five-year term. Ms. Aitken has served as the Interim Commissioner of Competition since January 12, 2009, a position she has held since the completion of Ms. Sheridan Scott's term as Commissioner. Ms. Aitken joined the Competition Bureau in 2005 as Assistant Deputy Commissioner of Competition, Mergers, and was appointed Senior Deputy Commissioner, Mergers, in May 2007. A copy of Industry Canada's press release is available at: http://www.ic.gc.ca/eic/site/ic1.nsf/eng/04896.html .
INDUSTRY MINISTER TAKES UNPRECEDENTED STEPS UNDER THE INVESTMENT CANADA ACT
On July 17, 2009, the Honourable Tony Clement, Minister of Industry, announced that he was taking the unprecedented step of filing an application with the Federal Court of Canada to seek compliance with undertakings provided under the Investment Canada Act (ICA). According to the Notice of Application filed with the Federal Court, when United States Steel Corporation acquired Stelco Inc. in 2007, it provided undertakings to the Minister regarding steel production and employment. It is common practice for non-Canadian investors to provide such undertakings in order to obtain the Minister's approval under the ICA for transactions involving acquisitions of control of Canadian businesses.
Pursuant to the ICA, where the Minister believes that an investor has failed to comply with its undertakings, hey may send a demand letter to the investor requiring the investor to justify its non-compliance. The Minister sent a demand letter to U.S. Steel on May 5, 2009, in response to production cutbacks and significant lay-offs in Canada, asking the company to justify its non-compliance or comply with its undertakings. Industry Canada's own administrative guidelines indicate that "undertakings are based to some extent on projected circumstances" and acknowledge that "where inability to fulfill a commitment is clearly the result of factors beyond the control of the investor, the investor will not be held accountable." However, as set out in a news release issued by Industry Canada on July 17, 2009, the Minister has indicated that he is "of the view that U.S. Steel is not complying with its undertakings" and that he is "not satisfied by its explanations for non-compliance." As a result, an application has been filed with the Federal Court of Canada asking the Court to remedy the situation. The Minister's actions in the present case indicate that the federal government is taking such undertakings seriously and that investors must be prepared to fully explain any non-compliance. A copy of the Minister's news release is available at: http://www.ic.gc.ca/eic/site/ic1.nsf/eng/04836.html .
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