Canadian Lawyer

LEGAL REPORT/M&A puts it over the magic line." The government will also start looking at the influence in the particular sector, having stated, "Where due to a high concentration of ownership a small number of acquisitions of control by SOEs could undermine the private sector orientation of an industry, and consequently subject an industrial sector to an inordinate amount of foreign state influence, the government will act to safeguard Canadian interests." Lee says: "The investors in Canada's oil and gas industry are pretty tightly concentrated from China, India, Japan, Korea, and Indonesia. It will be interesting to see how companies from Malaysia and Brazil are treated. It is debatable whether many companies that are powerful in the mining industry are state-owned or not." He also notes there is a much broader power SPECIALIZATION IN BUSINESS LAW Classes Starting in September 2013 Part-time, Executive LLM program for corporate counsel and practising lawyers Information Sessions Thursday, February 7th, 12:00 to 2:00pm Thursday, March 7th, 5:30 to 7:00pm U of T Faculty of Law, Faculty Lounge 78 Queen's Park, Toronto No registration required. Please feel free to drop in anytime during these hours. Taught by U of T Faculty of Law professors, together with top international faculty from MIT-Sloan School of Management and expert practitioners. TIME: EVENT: For more information, call 416-978-1400 or visit: http://www.law.utoronto.ca/programs/GPLLM.html Supported by the Association of Corporate Counsel (ACC) - Ontario Chapter and in partnership with Carswell, a Thomson Reuters business. 42 ntitled-2 1 F e b r uary 2013 www.CANADIAN L a w ye r m a g . c o m of review triggered by national security concerns not specific to SOEs. "To put it in context, that protection has no threshold. Even a $2-million deal, where there is no need to make an application, can be reviewed." However Addy was troubled by Harper's allusion to giving the minister of industry more time to consider national security reviews. "This was an important aspect of the amendments in 2009 that we lobbied hard for so that companies could have some certainty. If you come in with a multi-million dollar business deal, you don't want to be told some time later that it's being taken away." Any foreign company that passes the national security test, the SOE definition for oil sands, and the double ticket of threshold and control for all sectors, will still have to satisfy the ultimate test: net benefit to Canada. "How the government comes to a finding of net benefit is no different," says Borgers. "There is no doubt, in the wake of BHP, stakeholders were hoping and asking for clarification of net benefit. While we are not seeing more meat on the bones, foreign investors are being welcomed through deed and word." Addy says the recent treatment of net benefit is positive from the foreign investor's viewpoint. "The government has said things like reciprocity will not be dealt with when dealing with a particular transaction. It is in the realm of state-tostate negotiations. Investors have been concerned that the review of their particular transaction could be sidetracked with inter-governmental matters but that is not part of the net benefit test." All in all, practitioners generally agree Canada is now projecting a great image in the international scene, compared to other countries like Australia and the U.S. where the foreign investment review process is seen as a "black box." "We are living in a world where protectionism is cropping up everywhere," says Lee. "In a business decision, you make the cake first. If the government then says no, you've wasted all that time. We now have a kind of a road map. Nobody will say, 'If you do this you're absolutely guaranteed approval,' but companies say, 'Tell me how high I need to jump and I'll make a business decision whether I want to jump that high.'" 13-01-07 9:58 AM

• Cover