CANADA: Government no plans to extend Canada foreign investment rules on SOEs to other industries

Tuesday April 23 2013

In December 2012, the Minister of Industry announced clarifications to the Canada foreign investment review process to focus on the most significant transactions. The Government provided clarity on how Canada assesses investments by state-owned enterprises (SOEs). The Government also permitted the extension of timelines, where necessary, for national security reviews. In effect, the measures amounted to new powers for the government to limit Canada foreign investment by SOEs in the oil-sands industry, with new investment permitted only in exceptional circumstances.

In an interview, Natural Resources Minister Joe Oliver has said Canada has a wealth of resources other than oil and gas, including potash, uranium and diamonds, but the government does not currently plan to expand the constraints on state-owned firms to other sectors. He stated that the government felt the need to shield the oil sands industry particularly because most of the world’s oil reserves are controlled by state-owned enterprises.

When questioned about comments made by Saskatchewan Premier Brad Wall that Canada should eliminate foreign ownership limits for uranium companies such as Cameco Corp. (CCO) except in cases where a state-owned company is the bidder, Oliver stated the government had no plans to change the rules in that regard. Currently foreign investors are subject to an aggregate 49% ownership cap.

This information will be updated as further information becomes available.