Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/1518995
12 www.lexpert.ca Feature "ey are challenging more deals, and they're getting more powers to do so, generally – whether that is in the US, the EU, or Canada." In addition to the series of amendments, the bureau also recently got attention with commissioner of competition Matthew Boswell's comments on a common private equity strateg y. In remarks at the Canadian Bar Association Competition Law Fall Conference, Boswell said, "On the emerging issues front, we see clearly what's happening in terms of evolving business practices. We are wise to the risks of creeping acquisitions – including private equity roll-up strategies – and the harm they may pose to competition." In a roll-up, the company acquires and merges multiple smaller companies in the same industry to consolidate them into a more dominant player in the market. In the US, the Federal Trade Commission and the Department of Justice have a repu- tation of hostility toward private equity and roll-up strategies, says Stevens. Boswell's comments indicate that energy might be coming to Canada, which could put some private equity players at a competitive disad- vantage relative to other market participants when making acquisitions, he says. Lawyers note that the newfound regulatory assertiveness is palpable in foreign investment reviews as well. Amm says that jurisdictions across the world are focused on these reviews. is is partly the result of a global popular and political shi toward deglobalization and nearshoring. It is also related to the geopolit- ical dynamic with China, he says. Bill C-34, an act to amend the Investment Canada Act, was introduced in November 2021. It has progressed through the House and Senate and is currently being consid- ered by the Standing Senate Committee on Banking, Commerce, and the Economy. e proposed amendments will broaden the review scope of international investment. e feds are proposing to create new filing requirements prior to investment implemen- tation in prescribed sectors, impose stronger penalties for non-compliance, and give the minister authority to extend national security reviews, impose conditions during a national security review, and accept undertakings to mitigate national security risk. Stevens says that it is still unclear how the new amendments will be interpreted and put in force, but they could put foreign investors in certain sensitive jurisdictions at a disadvan- tage against other potential purchasers. ose looking for a co-investor or to sell a company will need to do due diligence in detail to deter- mine in what jurisdictions the other party operates, he says. While mainly aimed at China-related trans- actions, Amm says it does take the foreign investment scrutiny to a broader array of parties. "Certainly, the bigger the deal, the greater attention that will be paid to it." He says there will be more transactions reviewed, and they will take longer. e more assertive regulatory environ- ment extends to industry regulators, says Blair Keefe, co-head of Torys' financial services, bank regulatory, and insurance regulatory practices. He says the Consumer Protection Agency and the Financial Transactions and Reports Analysis Centre of Canada have become much more aggressive in recent years, and the Office of the Superintendent of Financial Institutions, which has been concerned with the housing market, raised capital require- ments for the big six banks by 100 basis points. e Consumer Protection Agency used to monitor banks' compliance with consumer provisions and hand out small fines for non-compliance and write a report, says Keefe, but now the penalties are much more significant, and the Agency is "naming and shaming" violators. Amm says the Office of the Superintendent of Financial Institutions and the Canadian Radio-television and Telecommunications Commission are also flexing their powers, COMPETITION LAW REFORMS Eliminated efficiencies defence Gave Competition Bureau new powers for market studies Enacted new framework for abuse of dominance Upped monetary penalties for violations Would expand private rights of action (proposed reforms) "THE COMPETITION BUREAU IS GETTING NEW POWERS TO CONDUCT MARKET STUDIES IN A MORE FORMAL AND MANDATORY WAY THAN THEN THEY HAD BEFORE" NAVIN JONEJA BLAKE CASSELS & GRAYDON LLP