Canadian Lawyer InHouse

NOVEMBER/DECEMBER 2018 36 INHOUSE For example, the United States recently introduced the Foreign Investment Risk Review Modernization Act of 2018. Ethier says that will change the law gov - erning the Committee on Foreign Invest- ment in the United States, known as the CFIUS Committee. It's being driven by national security concern over growing Chinese investments, but it will capture all foreign investors and expands CFIUS's juris - diction to scrutinize in-bound investment. CFIUS will have the ability to examine non- passive investment in companies that own, operate or supply "critical infrastructure" as well as real estate purchases next to "sensi - tive" U.S. government property. Ethier says clients will have to be "more mindful" of who their investing partners are, particularly when looking to buy or build critical infrastructure. The U.S. defines "critical infrastructure" as "systems and assets, whether physical or virtual, so vital to the United States that the incapacity or destruc - tion of such systems and assets would have a debilitating impact on security, national eco- nomic security, national public health or safe- ty or any combination of these matters." That includes a range of things from communica- tions to dams, transportation systems, waste water, health care and energy, among others. However, it's not just the U.S. that is looking at these issues. In a global foreign investment review report, Baker McKenzie found that six of the eight advanced economies have either modified their foreign investment laws since 2014 or plan to do so. The European Union also plans to change its foreign investment rules. The report says that most cross-border transactions will likely go through, but those in "sensitive sectors may encounter more scrutiny and a prolonged approval process." It also found that the most scrutinized in - dustries worldwide included not only critic- al infrastructure but telecommunications, energy, natural resources and agriculture, among others. Linda Brown, a partner at McCarthy Tétrault LLP in Vancouver who works on infrastructure deals, says, however, "I don't think the awareness around political risk is anything new. It's always been on people's minds." It's particularly true in a province such as British Columbia, where governments change frequently. "It's always been polar - ized, much more than Ontario," Brown says. Moreover, while the NDP scrapped the Massey Bridge project, Brown says the gov- ernment is moving ahead on other fronts, such as transit. In September, Prime Min- ister Justin Trudeau confirmed $1.37 billion in funding for metro Vancouver transit proj- ects, including $3 billion for the Broadway subway and Surrey LRT projects. As well, transit projects continue in Ontario, despite a new government, and Quebec, which has a new Coalition Avenir Québec government following its recent election. Cap and trade aside, lawyers say that the change of government in Ontario isn't ex - pected to upend too much on the infrastruc- ture front, despite the government looking to cut back on $6 billion in spending. In fact, some lawyers say it could be a boon for public-private partnerships. Many of the Ontario ministers are hiring former government staffers from former prime minister Stephen Harper's administration as they ramp up their offices, says Dan Brock, leader of the government relations practice at Fasken Martineau DuMoulin LLP in Toronto. The Harper government was a staunch supporter of P3 projects. "It's still the early days and they [the Ford govern - ment] are figuring out what they want to do" when it comes to infrastructure, says Brock. He says the Ontario mantra is promoting economic development and it will be inter - esting to see if the cash-strapped govern- ment looks more toward alternative financ- ing models to build needed infrastructure. "Ontario is a pretty stable market for these types of procurements [P3s]," says Greg Southam, a partner in the infrastruc- ture practice at Davies Ward Phillips & Vineberg LLP in Toronto. He says that, while there is "some concern" about the Hamilton LRT project, he expects Ontario to continue down the P3 path. As for Alberta, Seidel says, things are relatively quiet on the domestic infrastruc - ture front, as the provincial government prepares for a 2019 election. However, Southam says that, with the shifting political winds, there has been some movement in the infrastructure mar - kets away from design, build, finance and operate to design, build and finance, as gov- ernments decide to remain operators. Southam says that "there is so much private money out there that needs to get placed," he doesn't see a dampening effect on infrastructure projects any time soon. However, it's a different story when it comes to projects that have a national inter - est. The Federal Court ruling that upended the Trans Mountain pipeline, along with the growing slag heap of national energy proj- ects that have failed to get off the ground or been scrapped, has lawyers worried. Southam says the federal government has "lost the will power" to say there is a nation - al interest in building pipelines. He cites the Canadian Pacific Railway as an example of the leadership necessary to build a national interest project. "I don't think we would be The national interest card hasn't been played and it should be. DAVID SOUTHAM, Davies Ward Phillips & Vineberg LLP

• Cover