Changes to Investment Canada Act could bolster Canada's reputation
To view the Enriched Media Release, click here: http://smr.newswire.ca/en/the-school-of-public-policy-at-the-university-of-calgary/foreign-takeover-decisions-beg-more-transparency
CALGARY, Sept. 26, 2011 /CNW/ - Today, The School of Public Policy
released a study authored by Lawrence Herman that examines how Industry
Canada makes decision on foreign takeovers under the Investment Canada
Act. Using the scuttled acquisition of Potash Corporation as an
example, Herman finds that Industry Canada should be more transparent
in their evaluation and decision making for such deals.
"When a foreign acquisition is approved or rejected, the Industry
Minister should be required to issue public reasons," Herman writes.
"Where investment approvals are given subject to undertakings, the
general outlines should be made public."
In the Potash Corporation example, Minister of Industry Tony Clement
denied the bid, citing a lack of net benefit for Canada. Since BHP
Billiton did not formally contest the decision, Industry Canada did not
have to make its reasoning public.
The test of "net benefit" is a standard that Industry Canada applies
when considering foreign takeovers under the Investment Canada Act.
However, Herman argues the need to "recalibrate the legislation" to
require Industry Canada to explain how they apply the net benefit test
to deals like Potash Corporation.
Herman also acknowledges there is a legitimate need to protect
commercial confidentiality and sensitive national security issues, and
argues this can be done by way of public summaries or redacted
"More transparency and public disclosure will make foreign investors
confident the system is fair, objective, and free from bias, bolstering
Canada's reputation as a fine place to invest," Herman writes.
A copy of the paper can be found at policyschool.ca/publications.
Video with caption: "Video: Foreign Takeover Decisions Beg More Transparency
". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20110926_C6345_VIDEO_EN_3784.mp4&posterurl=http://photos.newswire.ca/images/20110926_C6345_PHOTO_EN_3784.jpg&clientName=University%20of%20Calgary%20%26%23150%3B%20School%20of%20Public%20Policy&caption=Video%3A%20Foreign%20Takeover%20Decisions%20Beg%20More%20Transparency%0D%0A%0D%0A&title=Foreign%20Takeover%20Decisions%20Beg%20More%20Transparency
SOURCE University of Calgary - School of Public Policy
For further information:
or to request an interview, please contact: