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Canada: Foreign Investment Review

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The Asia-Pacific Antitrust Review 2015

Canada's foreign investment review regime under the Investment Canada Act continues to generate controversy and present challenges in relation to a select number of transactions each year. The first formal rejection of a transaction (outside the cultural arena) under the Act occurred in 2008 in relation to a bid by US-based Alliant Techsystems Inc to acquire MacDonald Dettwiler Associates Ltd, a Canadian aerospace company... [W]hile the vast majority of investments by non-Canadians in Canadian businesses are not reviewable under the 'net benefit to Canada' test, and while almost all of those that are reviewable secure the requisite clearance in a reasonably timely fashion, albeit subject to various negotiated undertakings in certain cases, transactions continuing to encounter uncertainty under the Act include those involving certain types of cultural businesses, Canadian 'champions' as targets, SOE purchasers or national security concerns. Hence, prospective investors are well advised to take the review process under the legislation seriously and, in that regard, to engage capable counsel early in the deal process. Public and government relations experts may, on the advice of counsel, also need to be engaged.

This article on foreign investment in Canada appeared in The Asia-Pacific Antitrust Review 2015 and covers:

  • What is the relevant legislation and who administers it?
  • What kinds of investments are caught?
  • What are the review thresholds?
  • What is the timetable and process for notifications and reviews?
  • What information is required in a filing?
  • What are the substantive tests for clearance?
  • What are the powers of the authorities to prohibit or otherwise interfere with a transaction?
  • Is there any right for third parties to be involved in the review process?

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