CANADA: Report recommends greater clarity in Canada foreign investment rules

Thursday April 18 2013

The Institute for Research on Public Policy has published a report, “Greater clarity required in Canada`s foreign investment rules”, in which it urges the government to re-examine Canada`s foreign investment rules, which create the mistaken impression that Canada doesn’t welcome foreign investment.

The report suggests that the review process under the Investment Canada Act should become more transparent, rather than removing the current “net benefit test”. To achieve this, the government could:

• modernize the net benefit test to include additional criteria such as an investment`s compatibility with environmental, fiscal and trade policy objectives;
• publish a model list of undertakings to inform investors of the requirements that may be attached to a transaction`s approval;
• adopt formal guidelines for national security reviews; and
• amend the guidelines for state-owned enterprises to clarify issues of reciprocity, “exceptional” circumstances and other specific requirements (e.g., bonds).

Click on the above link for the report.