Merci.
Good afternoon, Mr. Chair and honourable members of the committee.
My name is Sandy Walker. I'm the chair of the competition law and foreign investment review section of the Canadian Bar Association. I'm a partner with the law firm of Dentons Canada.
Thank you for inviting the CBA to discuss the proposed amendments to the Investment Canada Act.
The CBA's main objectives are to improve the law and the administration of justice, and we are here today to that end.
With me today is Michael Caldecott, chair of the foreign investment committee of the section. Michael is a partner at the law firm of McCarthy Tétrault.
At the outset, the CBA recognizes both the importance of foreign investment to the Canadian economy and the importance of national security review of foreign investments in protecting Canada's national security. Today, we offer our views on how the bill can be improved to ensure its effective implementation without imposing unnecessary burdens on foreign investors and the government.
The bill establishes mandatory preclosing notification for acquisitions involving targets in prescribed business activities. Such transactions could not close until clearance has been received. To ensure predictability, it is critical that the new regime not come into effect until crucial terms such as “a prescribed business activity” have been defined. These definitions are essential to determine whether a preclosing filing is required and, as a result, should be defined either in the law itself or, if not, in regulations the bill would require to define those terms.
Second, if these definitions are not in the legislation, the draft regulations should be prepared in parallel with Bill C-34, or the amendment should come into force only after the regulations have been finalized.
Third, the bill will capture acquisitions of non-controlling interest in a foreign entity with a Canadian subsidiary. Even if the target has very limited operations in Canada, in these cases national security concerns are unlikely to arise. We therefore recommend exempting these indirect acquisitions where revenues and/or assets in Canada are under a de minimis level.
Fourth, to address transactions in progress when the amendments come into force, we recommend that the new regime become effective 90 days after the bill receives royal assent.
I will now ask my colleague Mike Caldecott to discuss the other points.