8 | LEXPERT • June 2017 | www.lexpert.ca/usguide-corporate/
INVESTMENT LIBERALIZATION
The evidence couldn't be more overwhelming that Canada's
Liberal government has indeed prioritized "global investment and the
jobs that come with it," as declared in its Fall Economic Statement 2016.
Perhaps most importantly, the statement, released on November
1, proposed to raise the threshold for "net benefit" review under the
Investment Canada Act to $1 billion in 2017, two years sooner than
planned. "This move was an extremely strong signal of interest in in-
vestment, effectively removing a bunch of transactions from the re-
quirement of review under the ICA and leaving only the largest for
consideration," says Neil Campbell of McMillan LLP in Toronto.
As well, on October 30, 2016, Canada signed the Comprehensive
Economic and Trade Agreement (CETA) with the European Union.
CETA will require Canada to increase the ICA net benefit review
threshold to C$1.5 billion for investors from European Union mem-
ber countries. Legislation is now before Parliament to implement the
provisions of CETA into Canadian law.
Under the Investment Canada Act, a direct or indirect acquisition
of a "Canadian business" by a "non-Canadian" is either notifiable or
reviewable, depending on the transaction's structure and the value
and nature of the target business. Notifiable transactions require only
the submission of a report following closing. Reviewable transactions,
however, will not be approved unless the federal government (with lim-
ited exceptions) is satisfied that the transaction "is likely to be of net
benefit to Canada."
Quite apart from the net benefit review, however, any investment in
a Canadian business by a non-Canadian is notifiable and subject to a
national security review. "There is no definition of 'national security'
in the ICA, and unlike the net-benefit review process, there is no finan-
Open Doors
TO INVESTMENT
PHOTO:
SHUTTERSTOCK
New developments
emphasize the Canadian
government's interest
in easing the way
for foreign investors
BY JULIUS MELNITZER
