Impact of the New Canadian Government on Foreign Investment Review

The new Liberal cabinet and government sworn in today may signal the start of important developments around the scrutiny of foreign investment reviews under the Investment Canada Act.

What You Need To Know

• Net benefit reviews in high-profile cases will still be influenced by the political implications of approval, but newly sworn-in Minister Navdeep Bains and the public service are likely to be given more autonomy to administer the Act. In their tenure the Conservatives had a centralized decision-making process that showed a particular sensitivity to popular opinion and other general concerns regarding investors from China and certain other countries. Although Liberal investment policy will evolve over time, early signs suggest a different approach. Prime Minister Trudeau has said he will be "open to global investment" and the Liberals may choose to back this up by making specific policy changes, such as reversing or softening the effective bar on State Owned Enterprise investments in the oil sands and adopting more open engagement with China.
• National Security reviews will continue. We have seen a dramatic rise in the number of reviews since national security powers were introduced in 2009, with numerous investments blocked by cabinet order. The number of reviews is unlikely to change under the Liberals, but there may be an increased willingness to approve investments conditionally (rather than block them) based on nuanced assessments of risk.
• Foreign investments in cultural businesses may attract more attention and scrutiny. Under the previous Conservative administration, discretionary reviews of acquisitions in the cultural sector were rare and approvals commonplace. This marked a significant shift from the policy approach of governments that came before them, which have traditionally taken a greater interest in preserving cultural businesses. That traditional concern could resurface under new Minister of Heritage Mélanie Joly.