Enforcement of the NBR Provisions Acquisitions are rarely refused approval under an NBR – since the ICA came into force in 1985, only two proposed acquisitions in non-cultural sectors have resulted in ministerial decisions that the transaction failed to meet the net benefit standard. In 2008, the Minister denied approval of a proposed C$1.325 billion acquisition by Alliant Techsystems Inc. of the space division of MacDonald, Dettwiler and Associates Ltd. In 2010, the Minister announced that BHP Billiton’s unsolicited C$38 billion offer to acquire Potash Corporation of Saskatchewan Inc. was not likely to be of net benefit to Canada. However, government policy statements or initial feedback during an NBR may have either deterred some investments from being proposed at all or prompted parties to abandon proposed transactions before forcing the Minister to make a formal NBR decision. FIRES and Canadian Heritage have issued policies with respect to the application of the NBR criteria to some specific sectors, including critical minerals, book publishing, films and video games. They have also issued guidelines relating to NBRs involving certain categories of investors. SOEs have been a particular focus of such NBR guidance. Other government NBR policies provide that investments by foreign SOEs to acquire control of a Canadian oil sands business (2012) or important Canadian mining companies with core assets in the critical minerals sector (2022) will be found to be of net benefit on an exceptional basis only. The oil sands policy noted more broadly that the Minister will carefully monitor SOE transactions throughout the Canadian economy. The oil sands policy was prompted by the US$15.1 billion acquisition of Nexen by China’s CNOOC. As noted above, however, more recently the government has undertaken initiatives to increase investment from China generally and specifically indicated that the government is open to more investment by China in the oil sands sector. Pursuant to the Russia Policy, only on an exceptional basis would the Minister find an acquisition of control of a Canadian business by a direct or indirect Russian investor to be of net benefit to Canada. Having regard to the COVID Policy, concerns about opportunistic foreign investments by SOEs or private investors closely tied to or subject to direction from foreign governments taking advantage of depressed valuations of Canadian businesses could lead to enhanced scrutiny under NBRs in similar challenging economic circumstances.
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