Lexpert Magazine

www.lexpert.ca 11 as from a foreign direct investment perspective. "Over the past few years, there has been a heightened regulatory scrutiny that we're seeing across the globe," she says, adding it is "still a question" whether, under the second term of US President Donald Trump, there would be a loosening of the regulatory scru- tiny on mergers and acquisitions. As demonstrated by the recent announce- ment of enhanced economic- and national security-related guidance for foreign invest- ment, Banicevic says there is "the prospect of increased national security reviews." While the political environment at the federal level is in flux, Banicevic says she doesn't expect there to be more changes to the Competition Act given the recent amendments. "Even if there is a change in the governing party, I don't expect significant revisions, perhaps some minor tweaking." Banicevic also points out a need for balance in applying the Investment Canada Act to foreign investment. If economic and national security concerns are raised too o en and applied too stringently by the Canadian government, "it may make it more difficult for Canadian companies wanting to make investments in other countries" if other countries, in turn, take retaliatory measures. Torys LLP partner Dany Assaf also thinks the regulatory environment for dealmaking is at a "fork in the road." is is not only about how the new competition laws will affect M&A, he says, but also what sectors could be reviewed under the new economic and national security rules. While some obvious sectors – critical minerals, critical infrastruc- ture, sensitive technology – will likely come under the spotlight of dealmaking involving foreign entities, he mentions agriculture and food security as just one area it could impact over time. Assaf also says that Canadians recognize that, faced with the new reality of a more fractious relationship with the United States, we may have to redefine who our friends are more broadly. "Do we need to leave the door open to be less stringent on certain things? We need to serve the Canadian people and the Canadian national interest first and foremost. "Perhaps we need to keep our doors open more to nurture other customers and partner relations," he says, adding that "our regulatory environment may need to take that into consideration." In these challenging times, Assaf says, factors such as the national interest are "clearly para- mount." Still, questions will arise over "how do you define that, and what does national interest mean in the context of a particular case and how that could differ from national security." Assaf adds, "Ultimately, we need to chart our destiny. We need to look at dealmaking with open eyes, make case-by-case assess- ments under the new regulatory environ- ment without prejudging, and ask ourselves the fundamental question: does this benefit Canada and make us stronger?" As for what lawyers can do in advising clients, Soloway at Blakes points to the adage, "When there's chaos, there are opportunities for lawyers." Lawyers, as trusted advisers, can help clients take a broad "view of the regulatory and political environment that we're operating in. Lawyers are uniquely positioned to take a holistic view and provide the insight and guid- ance to help their clients make sound choices." Adds Soloway: "Now more than ever, it's about how you structure transactions and define the rationale and benefits of those transactions. It's the language you use to internally discuss the pros and cons of those transactions and how you situate yourself in the competitive landscape. "We've been counselling for a long time for clients to get us involved early in the process, even when they are just thinking about a transaction and before they even create a document." Still, Soloway's colleague Joneja says mergers and acquisitions will continue – the question is how long the uncertainty in deal- making could last. "Any time there's disruption in the economy and change, there usually is a period of reposi- tioning, and adapting to the new reality." "The new rules shift the burden onto the merging parties to show there is no substantial lessening or prevention of competition" Dominic Thérien MCCARTHY TÉTRAULT LLP "Last year was a significant year for legislative change in the competition space in Canada, and the foreign investment review space" Navin Joneja BLAKE, CASSELS & GRAYDON LLP

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