UPDATED: Feds reveal Investment Canada Act amendments
Critics suggests changes don't clear up "net benefit" confusion.
Investment Canada Act
OTTAWA: The Harper government today released details of the improvements it’s looking to make to Canada’s foreign investment review process, suggesting the new regulations will provide greater public information and more flexibility in enforcement.
Through the Jobs, Growth and Long-term Prosperity Act, the Harper Government has announced proposed targeted improvements to Canada’s foreign investment review process to provide greater information to the public and more flexibility in enforcement.
“We want our foreign investment review process to continue to promote economic growth, job creation and prosperity in Canada,” said Christian Paradis, Minister of Industry and Minister of State (Agriculture).
Through the Jobs, Growth and Long-term Prosperity Act, the federal government has introduced amendments to the Investment Canada Act to provide Paradis with a greater ability to publicly communicate information on the review process, while preserving commercial confidences. The amendments will also promote investor compliance with undertakings by authorizing the minister to accept security, when offered by an investor, for payment of any penalties ordered by a court for a contravention of the Investment Canada Act.
They will also allow Paradis to publicly disclose if he has sent a preliminary notice to an investor that he is not satisfied that the investment is likely to be of net benefit to Canada.
The government gave no reasons for the changes, but they follow a 2010 non-binding motion in the Commons calling for more transparency, including public hearings, and conditions applied to a successful bidder.
As well, former industry minister Tony Clement had suggested the department would review the act after taking heat from for vetoing the takeover of Potash Corp. by Anglo-Australian mining firm BHP Billiton. At the time, the then-minority government was accused of caving in to political pressure from Saskatchewan.
Critics said Canada’s reputation as an open-for-business market suffered a black eye and the issue has recently raised questions about whether the government would permit a takeover of the country’s best known but troubled high-tech firm, Research in Motion.
NDP critic Peggy Nash called the proposed amendments “a very weak effort” considering the problems associated with the investment act.
The reforms are unlikely to clear up the confusion over the calculations the government makes in determining when a takeover is not considered of “net benefit” to Canada.
“This is just telling people where the process is at, but it doesn’t give them any insight into what the proposals are or what the conditions are … (so) it doesn’t given them a chance to propose their views,” she said.
Although the government has intervened twice to stop takeovers, Nash said the holes in the current act were revealed recently by the “outrageous” closing of the Electro-Motive plant in London, Ont., by Caterpillar Inc. in February.
The plant was shuttered, resulting in the loss of 450 jobs, only two years after it was purchased for $820 million by the Illinois-based company.
In another case, the government took US Steel to court in 2009 for breaking conditions on job and production levels after taking over Stelco operations in 2007. The US company eventually settled with Ottawa by making new commitments on investment.