Archive for the 'Investment Canada' Category
On September 20, 2012, Canada’s intelligence agency, the Canadian Security Intelligence Service (CSIS), issued its 2010-2011 Public Report.
In light of the ongoing federal review of the CNOOC/Nexen transaction, heightened debate regarding the conditions for state-owned-enterprise (“SOE”) investment in Canada and fact that some Canadian investments can be subject to a national security review, the following discussions of the Investment Canada Act, SOEs and Canadian national security caught my eye:
“Some foreign investments in Canada can also pose wider national security concerns. The Investment Canada Act provides the Government of Canada with a mechanism to ensure that foreign investments are within Canada’s national security interests. CSIS plays a contributing role by advising government of the national security implications that might arise from a proposed foreign investment.
…
A related security issue is one of foreign investment. Canada is a trading nation, with economic wealth, advanced infrastructure and vast potential – all of which make Canada a natural and attractive prospect for foreign investors. While the vast majority of foreign investment in Canada is carried out in an open and transparent manner, certain state-owned enterprises (SOEs) and private firms with close ties to their home governments have pursued opaque agendas or received clandestine intelligence support for their pursuits here.
When foreign companies with ties to foreign intelligence agencies or hostile governments seek to acquire control over strategic sectors of the Canadian economy, it can represent a threat to Canadian security interests. The foreign entities might well exploit that control in an effort to facilitate illegal transfers of technology or to engage in other espionage and other foreign interference activities. CSIS expects that national security concerns related to foreign investment in Canada will continue to materialize, owing to the increasingly prominent role that SOEs are playing in the economic strategies of some foreign governments.”
For a copy of CSIS’ report see: CSIS – Public Report 2010-2011.
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In a recent decision, the Federal Court of Appeal granted a stay of the Competition Tribunal’s May 29, 2012 decision in the contested CCS merger case Commissioner of Competition v. CCS Corporation.
This decision relates to a recent contested BC landfill merger, in which CCS Corporation acquired Complete Environmental Inc. and its wholly-owned subsidiary Babkirk Land Services (the first contested merger case in Canada in six years, an uncommon example of a “prevent” merger case under the Competition Act and a non-notifiable merger challenged by the Competition Bureau).
As a result of the Tribunal’s May decision, following a challenge of the merger by the Bureau, CCS Corporation (now Tervita Corporation) had been subject to a Tribunal order to divest the shares or assets of acquired Babkirk before the end of the year, after which a trustee was to be appointed to effect the sale. The Tribunal had also issued a related Divestiture Procedure Order in July, setting out the terms for the divestiture process (see: Divestiture Procedure Order).
In this regard, the Tribunal partially granted the Commissioner of Competition’s application accepting that the transaction would likely prevent competition substantially in the relevant secure landfill services market in Northern BC, though ordered divestiture rather than dissolution (see: Competition Tribunal Releases Decision in BC Landfill “Prevent” Merger Case and Commissioner of Competition v. CCS Corporation).
The stay of the Tribunal’s decision now granted by the Federal Court will apply until the final determination of the appeal. In granting a stay, the Court applied the test in RJR – MacDonald Inc. v. Canada (A.G.), [1994] 1 S.C.R. (S.C.C.), in which the Supreme Court set out a three-part test (serious issue, irreparable harm and balance of convenience).
With the considerable focus on Chinese investment in Canada at the moment, largely arising from the proposed CNOOC acquisition of Nexen (as well as several proposed SOE investments in Canada), Josephine Smart at the University of Calgary has published a new paper on Canada/China investment relations entitled “Dancing With the Dragon: Canadian Investment in China and Chinese Investment in Canada”.
Abstract:
“While Canadian trade and investment with China is today relatively modest, with China well on track to displace the United States as the world’s largest economy, Canada must make it a priority to prepare for a future characterized by dramatically increased trade and investment between our two countries. This paper sheds light on some the issues and measures Canadian governments will have to consider as they look to establish safe and prosperous relationships with China. To begin with, Canadians choosing to invest in China must be prepared for the risk inherent in that country’s peculiar ‘capitalism with socialist characteristics.’ The Chinese state continues to play an interventionist role in many significant sectors in the economy, and the strategy behind China’s overseas investment in countries such as Canada is specifically aimed at furthering China’s own national security goals and geopolitical influence. Canadians wishing to do business in China will also require great cultural competency. The cultural institution known as guanxi — in which gifts to sway influence are considered an acceptable, even desirable practice — persists in China, with even native Chinese unclear on where to draw the line between ‘good’ guanxi and ‘bad’ corruption.
At home, Canadians may soon be forced to confront questions about how much of our own land security and natural resource security we are willing to compromise by permitting Chinese investment to gather up our farmland and key industries. Canadians should decide sooner, not later, how well our own strategic interests are served by permitting unrestricted Chinese investment in our economy. In anticipation of these issues, Canada’s federal and provincial governments should provide increased support for a more comprehensive training and research infrastructure that better prepares Canadians for the growing bilateral trade between our countries. They should also reinvest in the monitoring and regulatory enforcement for food and product safety to ensure that Canadians remain protected from unsafe Chinese imports.”
For a copy of the paper see: Dancing With the Dragon
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In advance of its upcoming “Canada in the Pacific Century” conference to be held in Ottawa this fall, the Canadian Council of Chief Executives (CCCE) has published another new paper discussing Canada’s role in a world where the role of the U.S. as a major trading partner is increasingly in doubt and the importance to Canadian businesses to understand Asia seems to grow exponentially with each passing day.
With two current resource plays by Asian state owned enterprises, a recent trade mission having just been completed by Canada’s Trade Minister to South-East Asia and a major China trade mission by Canada’s PM earlier this year, Canada/Asia relations are very much in the spotlight.
Introduction:
“For 250 years, Canada’s strong economic links with its neighbour to the south have been a cornerstone of its growth and prosperity. While the United States will continue to be a major economic partner and critical ally for Canada, it is vital that Canada build equally strong links with Asia.
During the period from 2010 to 2025, Asia is projected to generate 33 percent of global economic growth. China, the world’s second-largest economy, is urbanizing 100 times faster than the United Kingdom did in the 19th century, and is expected to rival the United States in economic terms by 2020-2030. India, too, is urbanizing rapidly. Seven new “smart” cities are planned for the Delhi-Mumbai corridor and more than 215 million people are expected to migrate from villages to cities by 2015.
From the Canadian Council of Chief Executives (CCCE):
“On September 24-25, 2012, the Canadian Council of Chief Executives will host “Canada in the Pacific Century”, a conference bringing together leaders from business, government, academia, and other key groups to discuss Asia’s rise and the implications for Canada.”
For the updated Agenda see:
In anticipation of its upcoming fall Canada in the Pacific Century Conference, the Canadian Council of Chief Executives (CCCE) is publishing a series of Asia investment related papers:
“As part of the Canada in the Pacific Century initiative, the CCCE will publish a series of papers in 2012 dealing with a wide range of issues in the Canada/Asia relationship.”
The CCCE has published the most recent paper in this series by Graham Orpwood, entitled “Competing in the 21st Century Skills Race” – see: Canada in the Pacific Century – Papers
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With the Maple/TMX and Glencore/Viterra deals beginning to quiet down now, the next Competition Act / Investment Canada Act approval dance began earlier today with announcements that China National Offshore Oil Corporation (“CNOOC”) was proposing to acquire Nexen Inc. in a friendly $15.1 billion all cash transaction ($27.50 per Nexen share). Nexen has assets in Western Canada, the U.K. North Sea, Gulf of Mexico and offshore Nigeria, including oil and gas, oil sands and shale gas production.
Canada’s Industry Minister, the Honourable Christian Paradis, confirmed that the transaction would be subject to Investment Canada Act (“ICA”) review (see: Minister Paradis Confirms China National Offshore Oil Corporation and Nexen Inc. Transaction is Subject to Review under the Investment Canada Act) and made a number of rather pro forma statements, including confirming that the transaction exceeded the WTO review threshold and setting out the net benefit to Canada criteria under the ICA. The Minister also confirmed that the Competition Bureau would be reviewing the proposed transaction.
CNOOC, in reply, in this newest ICA approval dance, began to indicate the types of commitments it may be prepared to offer to secure ICA approval, including significant capital investment, listing CNOOC Limited’s common shares on the TSX, making Calgary its head office for North and Central American operations, vowing to maintain existing management and employees (as well as increasing jobs) and accelerating resource development. According to Nexen’s press release, CNOOC also intends to continue to support oil sands research at Alberta universities and participate in the Oil Sands Innovation Alliance (COSIA) (see: CNOOC Limited Enters Into Definitive Agreement to Acquire Nexen Inc.).
The Canadian council of Chief Executives (CCCE) has published its draft agenda for the upcoming Canada in the Pacific Century conference, to be held in Ottawa from September 24-25, 2012: Canada in the Pacific Century – Draft Agenda.
Topics are to include “Asia’s Rise and the Opportunities for Canada”, “Powering Asia’s Rise: Opportunities and Challenges for Canadian Energy Producers”, “Success Stories and Cautionary Tales From the Executive Suite”, “Canadian Trade Strategy in the Pacific Century” and “Foreign Direct Investment in the Pacific Century”.
Tentative speakers are to include a rather diverse range of representatives from CIBC, the University of Singapore, Canada Pension Plan Investment Board, Munk School of Global Affairs, University of Alberta, BMO, Rotman Institute for International Business, Manulife, McKinsey, Asia Pacific Foundation of Canada, Richardson International, Power Corporation and the BC First Nations Energy and Mining Council, as well as the Minister of Foreign Affairs John Baird and Bank of Canada Governor Mark Carney.
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Templates/precedents and checklists to run promotional contests in Canada
Templates/precedents and checklists to comply with Canadian anti-spam law (CASL)
