Lexpert Magazine

10 www.lexpert.ca 2025 partner Navin Joneja of Blake, Cassels & Graydon LLP. He adds that the latest changes to the Investment Canada Act will create an environment in which Canada's foreign investment review authorities will examine transactions more closely from a security standpoint. On the foreign investment side, "the national security review regime has been evolving quite rapidly," he says. e bottom line, Joneja says, is that a greater number of transactions will fall under regulatory scrutiny, and the March additions will increase that scrutiny. Investors looking to acquire or establish a business in Canada must be "mindful of the new guidelines and the possibility of a national security review under expanded criteria," including supply of critical goods and services, critical minerals, or access to sensitive personal data. Joneja points to sectors ranging from advanced weapons and surveillance tech- nologies to artificial intelligence, robotics, machine learning, and life science tech- nology as examples of "sensitive technology." He says that with changes in both competition and foreign investment rules, those hoping to make deals should start approaching their legal advisers earlier in the process – "advanced planning definitely helps." He notes that more clients are heeding that advice. Dominic érien, a partner with McCarthy Tétrault LLP in Montreal, notes that the regulatory environment for deal- making significantly changed last year due to the adoption of Bill C-59, which deals with the Competition Act, and Bill C-34, which covers changes to the Investment Canada Act that focus on national security issues. Under Bill C-59, the pre-merger notifica- tion and substantive review processes have substantially changed. e bill also offers a pathway for private litigants to more easily bring cases to the Competition Tribunal and expands the Competition Act's reach over areas such as "greenwashing," or making unsupported environmental claims. e act removes the so-called efficien- cies defence, which permits an otherwise anti-competitive merger to withstand a legal challenge if it generates sufficient relevant effi- ciencies to exceed and offset anti-competitive effects. érien says efficiencies arguments can still be made, but "the question is how will the Competition Bureau treat that argument." Canada's Competition Bureau is reviewing its merger enforcement guidelines, and "it will be important to see how it deals with efficiencies." e new rules shi the burden onto the merging parties to show there is no substan- tial lessening or prevention of competition when relevant concentration thresholds are met. e previous review regime placed the burden on the competition commissioner to show an anti-competitive impact. Says érien: " e impact we expect [from these new rules] is significant both from the procedural and substantive point of view. And transactions involving a non-Canadian investor require more than ever strong early analysis from a national security standpoint." Blakes partner Julie Soloway agrees that both sets of regulatory changes will add "layers of complexity" to the review process under the Competition Bureau rules and the foreign investment criteria. " ere will be more scope and depth to review a trans- action, and more time needed to scrutinize." She adds that the latest changes in foreign investment reviews bring in, to some extent, the concept of "nationalistic geopolitical factors" when assessing certain deals. " e rules provide an opportunity to protect Canadian entities on economic and national security grounds." Soloway notes that this will likely result in a shi in the type of legal work done "as people try to allocate risk and assess what transactions are likely to get through quickly or will take time." Anita Banicevic, partner at Davies Ward Phillips & Vineberg LLP, points out that a shi ing and, in some cases, stricter regulatory environment isn't just a Canadian phenomenon. "Across the board, there's been increased regulatory scrutiny of deals under antitrust legislation, as well SENSITIVE TECHNOLOGY AND NATIONAL SECURITY Industries where foreign investment could spark review Advanced digital infrastructure technology Advanced energy technology Advanced materials and manufacturing Advanced sensing and surveillance Advanced weapons Aerospace, space, and satellite technology Artificial intelligence and big data technology Human-machine integration Life science technology Quantum science and technology Robotics and autonomous systems Feature

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