Changes to Investment Canada Act could slow economic reopening

Competition and Foreign Investment Review partner Omar Wakil has warned that any changes to the Investment Canada Act might be detrimental to Canada’s recovery from the COVID-19 pandemic.

Omar expressed this sentiment at a House of Commons industry committee hearing this month which is investigating changes to the Act amid heightened concerns around foreign takeovers.

The committee heard experts’ concerns that the existing rules for foreign investment into Canada need to be adjusted in a digital economy as they presently don’t do enough to address the increasingly strategic nature of the technology and intellectual property rights of many Canadian businesses and industries.

The Financial Post reported Omar’s comments to the committee, where he said lowering the thresholds for review or even going so far as to introduce moratoriums “could exacerbate existing diplomatic tensions or create new ones.”

“Lower thresholds or a moratorium may deter the injection of capital that foreign investment can bring,” Omar said.

“That could impede our economic reopening and harm Canadians.”

These issues reflect the growing sense of protectionism that has been observed in Canada and other countries impacted by the COVID-19 crisis as nations assess the integrity of their supply chains and manufacturing capabilities. Omar, along with partner John Emanoilidis, and Hill and Knowlton Senior VP Elizabeth Roscoe, will be discussing this rising “Canada First” mindset from a foreign investment perspective in the webinar “Canada First?: A changing Canadian business sentiment”.

Register for the July 9 webinar to hear the trio share views on how both political and popular reaction to foreign investment has shifted, what it could mean for our trading partners and investors, and what it will take to get deals done in this new environment.