ⓘ Investment Canada Act

                                     

ⓘ Investment Canada Act

The Investment Canada Act is a Canadian Federal law governing large foreign direct investment in Canada. The ICA was one of the first acts of Brian Mulroneys newly elected Progressive Conservative government, receiving royal assent on 20 June 1985. It has been amended at various times, including recently the Economic Action Plan 2013 Act. Pertinent regulations include the Investment Canada Regulations, SOR/85-611. The Act empowers the government to forbid foreign investments of "significant" size if they do not present a "net benefit to Canada." As of 2017, Canadian policy is to consider over The Investment Canada Act ICA is a Canadian Federal law governing large foreign direct investment in Canada. The ICA was one of the first acts of Brian Mulroneys newly elected Progressive Conservative government, receiving royal assent on 20 June 1985. It has been amended at various times, including recently the Economic Action Plan 2013 Act. Pertinent regulations include the Investment Canada Regulations, SOR/85-611. The Act empowers the government to forbid foreign investments of "significant" size if they do not present a "net benefit to Canada." As of 2017, Canadian policy is to consider over $1 billion "significant." The determination of what substantially constitutes the locus of control of a corporation is governed by the Canadian Ownership and Control Determination Act. billion "significant." The determination of what substantially constitutes the locus of control of a corporation is governed by the Canadian Ownership and Control Determination Act.

                                     

1. History

The Act was intended to signal Canadas openness to foreign investment and coincided with a narrowed mandate of the Foreign Investment Review Agency FIRA, which was renamed Investment Canada. FIRA had been set up by Pierre Trudeaus Liberal government to limit increasing US ownership of Canadian business. Canadian nationalists criticized FIRAs effectiveness, noting that in practice it was rarely used to actually forbid an investment. The business community and opposition Progressive Conservative Party criticized FIRA for its activism, saying it had stifled investment from the emerging global economy.

                                     

2. Effects

All transactions that are acquisitions of a Canadian business by non-Canadians must be "notified" ICA ss. 11-12, but only those above a 5 million dollar threshold or 50 million dollars for indirect investments, such as shares are reviewable ICA s. 14. If the investor is a WTO member, the threshold was 320 million in 2012.

The Act empowers a Director of Investments, who as of April 2015 is Deputy Minister of Industry John Knubley, to produce decisions, and reports of decisions. The thresholds, for valuations above which the ICA is to be invoked, are according to the legislation several and hinge on whether or not the investors are part of the World Trade Organization.

While the ICA gives Investment Canada the power to restrict investment, its mandate is only to "review.significant investments.in a manner that encourages investment, economic growth and employment opportunities" unless proposed investments specifically injure national security. According to labour economist Jim Stanford, the Mulroney government never invoked the Act to deter a foreign investment, nor did its successors, the Chretien and Martin Liberal governments.

Foreign investment in Canada rose significantly in the wake of the ICA, from approximately $100 billion in 1985 to over $550 billion in 2006.

The ICA was invoked for the first time when in 2008 the Conservative government of Stephen Harper blocked the sale of the space division of MacDonald, Dettwiler & Associates, a Vancouver-area technology company, to US-based Alliant Techsystems. As of November 2010, the federal government had reviewed 1.637 takeovers since 1985 and rejected only one, that of MDA.

On 3 November 2010, then-Minister of Industry Tony Clement imposed conditions for approval of the hostile takeover for over $38bn of Potash Corporation by Australia-based mining conglomerate BHP Billiton. On 15 November 2010, BHP-Billiton withdrew its bid, saying the conditions had proved too onerous.

                                     

3. Criticism

While the Act was not used to formally block takeover bids and investments, its presence and vague mandate enables diplomats, public representatives and civil servants to informally dissuade investors, and creates a sense of government risk amongst foreign investment analysts. The scale of impact is difficult to measure and has not been widely studied.

Nationalist critics believe the Act is too narrow and, as a matter of policy, should more heavily restrict foreign investment.

Critics note that Canadas share of world direct investment fell significantly after 1985. Some of this is due to large increases in emerging economies receipt of FDI, but Canadas share has fallen even amongst developed countries, and in the late 2000s Canada became a net investor in the world.

Some critics note that the Harper governments use of the ICA has seemed unpredictable, resulting in a "chilling" effect on foreign investment in Canadian companies. This hidden effect, if it exists, could suppress the value of Canadian shares and companies by deterring potential investors from even considering Canada as a market or destination. In response to this criticism, on 15 November 2010 the Harper government signalled its intention to provide clear guidelines for its use of the ICA.



                                     
  • created through the Investment Canada Act and launched on March 12, 2018 as a departmental corporation. Before the Invest in Canada agency was created
  • The Investment Industry Regulatory Organization of Canada IIROC Organisme canadien de reglementation du commerce des valeurs mobilieres or OCRCVM in
  • by way of the 1997 Canada Pension Plan Investment Board Act to oversee and invest the funds contributed to and held by the Canada Pension Plan CPP
  • established by an Act of Parliament as the Industrial Development Bank IDB in September 1944. IDB was initially an arm of the Bank of Canada and the Governor
  • otherwise notable investment banks. This list of investment banks notes full - service banks, financial conglomerates, independent investment banks, private
  • Accounts 2008 Investment Canada Act March 2004 Decision Transit Management Company Approved BC Transit. February 6, 2008. Investment Canada Act March 2005
  • The Canada Development Investment Corporation CDIC is a Canadian Crown corporation assigned with management of investments and corporate interests of
  • Analysis Centre of Canada Canada Deposit Insurance Corporation Canada Development Investment Corporation Royal Canadian Mint PPP Canada Acts and legislations
  • A foreign direct investment FDI is an investment in the form of a controlling ownership in a business in one country by an entity based in another country
  • Financial Services and Markets Act 2000, where Part XVII, sections 235 to 284 deal with the requirements for a collective investment scheme to operate. It states