Misplaced Pages

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15-475: The Act was intended to signal Canada's 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 Trudeau 's Liberal government to limit increasing US ownership of Canadian business. Canadian nationalists criticized FIRA's effectiveness, noting that in practice it

30-475: A matter of policy, should more heavily restrict foreign investment. Critics note that Canada's share of world direct investment fell significantly after 1985. Some of this is due to large increases in emerging economies' receipt of FDI, but Canada's 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 government's use of

45-539: Is a stub . You can help Misplaced Pages by expanding it . Royal Commission on Canada%27s Economic Prospects The Royal Commission on Canada's Economic Prospects was initiated by the Louis St. Laurent government in order to develop recommendations regarding the Canadian economy. Chaired by Walter L. Gordon , its 1956 and 1957 reports were representative of a period of growing concern for Canadian nationalism and questioned

60-722: The Chrétien 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,

75-633: The Royal Commission on Canada's Economic Prospects (known as the Gordon Commission) firmly planted foreign investment on the political agenda. Next, the 1968 Watkins report (known formally as Foreign Ownership and the Structure of Canadian Industry ), called for a national policy capable of handling Canada's interests in the age of the multinational corporation . In 1970, the Wahn Report expanded

90-459: 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

105-476: 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,

120-435: 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

135-469: The ICA. Foreign Investment Review Agency The Foreign Investment Review Agency (FIRA) was established by the Canadian Parliament in 1973 to ensure that the foreign acquisition and establishment of businesses in Canada was beneficial to the country. The Foreign Investment Review Act that created the agency was the culmination of a series of government reports and debates. The 1957 report of

150-429: The act, takeovers were assessed based on their contribution to job creation, Canadian participation in management, competition with existing industries, new technology, and compatibility with federal and provincial economic policies. When Prime Minister Brian Mulroney came to office in 1985, the agency was renamed Investment Canada and its mandate drastically reduced. This Canadian government –related article

165-412: 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 PotashCorp by Australia-based mining conglomerate BHP Billiton . On 15 November 2010, BHP-Billiton withdrew its bid, saying the conditions had proved too onerous. While

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180-406: The government's policy of allowing control of Canada's natural resources and other business enterprises to be sold to foreign interests. When Gordon became Minister of Finance a decade later, he commissioned Mel Watkins to conduct a further investigation into foreign ownership of the Canadian economy, resulting in the "Watkins Report". The Canada Development Corporation was created in 1971 as

195-512: The idea of a screening process, and finally the Gray report (known officially as Foreign Direct Investment in Canada ) provided the rationale and framework for the agency. FIRA was placed under the jurisdiction of the Department of Industry and later, when it was merged with the Department of Trade and Commerce, under the newly named Department of Industry, Trade and Commerce. As outlined in section 2(2) of

210-504: 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

225-487: 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 . 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

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