Challenges for State-Owned Enterprises Arising From Proposed Amendments to the Investment Canada Act

The Canadian government’s Bill C-60 contains proposed amendments to the Investment Canada Act that will significantly impact foreign investors whom the Canadian government considers as state-owned enterprises (SOEs).  An investor might be an SOE even if a foreign state only indirectly “influences” the investor.  Under these amendments, if the Minister of Industry determines that an investor is an SOE and it is acquiring control of a Canadian business, then the applicable review threshold will be the lower SOE-specific threshold and not the significantly higher threshold for non-SOE investments.  A finding by the Minister that an investor is an SOE may also give rise to national security review implications. The proposed amendments introduce potentially broad concepts and elements of uncertainty that will likely, without further clarity from the government, place a burden on parties assessing and addressing regulatory risk should these amendments become law.

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