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foreign investment review
The Investment Canada Act is designed to ensure that significant foreign investments are of "net benefit to Canada". The Act applies to all non-Canadians planning to commence a new business activity in Canada or acquire control of an existing Canadian business. All such transactions must be notified to the federal Department of Industry and, in some instances, may be subject to review under the "net benefit" test. Reviewable transactions involve the consideration of a wide range of economic factors such as employment, investment and exports, as well as inputs from other relevant government agencies including the Competition Bureau (which may also conduct its own reviews under the merger provisions of the Competition Act). Special rules apply to investments in sensitive business sectors such as cultural industries, and a separate review process also exists for transactions that may be "injurious to national security". Investments relating to "cultural businesses" are the responsibility of the Department of Canadian Heritage. All other investments are Industry Canada's administrative responsibility.
The Investment Canada Act is complex and the review process can be time-consuming. McMillan LLP has one of Canada's foremost foreign investment practices, with extensive experience in handling reviews before both Industry Canada and the Department of Canadian Heritage. We advise clients on the Act's application to proposed business transactions, guide clients through the regulatory review process and assist with compliance reports on undertakings.
Representative Transactions/Cases
- Cleared several transactions in the book publishing/distribution/retailing and music recording/publishing sectors
- Advised a private equity investor in the acquisition of a major music recording/publishing business
- Assisted a multinational electronics conglomerate in acquiring a large Canadian equipment/controls manufacturer
- Advised on Bank Act and other exemptions which shielded numerous transactions from review
- Acted for a U.S. purchaser of Canadian vehicle manufacturing plants
- Represented Diageo in its joint acquisition with Pernod-Ricard of the Seagram beverage alcohol business
- Obtained ministerial opinions regarding non-reviewability on various matters from both Industry Canada and the Department of Canadian Heritage
- Counsel to the CRTC (Canada's broadcasting and telecommunications regulator) in its review of the Goldman Sachs/CanWest acquisition of Alliance Atlantis
- Counsel to the CRTC in relation to the privatization of BCE
- Assisted in the review and clearance of the acquisition of a Québec-based video game developer by a UK purchaser
Publications / Presentations
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