Contributing Lawyers


Cyndee Todgham Cherniak

United States

Susan Kohn Ross


Andrew Hudson

Canada's "Compete to Win" Report Recommends Opening Canada to Foreign Investment

On June 26, 2008, Canada's Competition Policy Review Panel issued its much anticipated "Compete to Win" Report.  The Report was presented to the Minister of Industry who will consider the recommendations.  Foreign companies looking at opportunities to invest in Canadian companies, Canadian industries, industries (telecommunications and broadcasting, resources (uranium and mining, financial services, air transport etc.) should review this report and consult with Canadian counsel so that they may continue to monitor the opportunities and obstacles that will undoubtedly arise.

The Report makes a number of specific policy recommendations to the federal government, and also calls for action by other levels of government, the business community, post-secondary educational institutions and individual Canadians to make Canada more competitive in the context of economic globalization.

Specific policy recommendations to the federal government include:

  • Amending the Investment Canada Act to reduce barriers to foreign investment by increasing review thresholds; reversing the onus to require the government to demonstrate that an investment would be contrary to the national interest before disallowing a transaction; increasing transparency and predictability; and preserving a distinct approach for the cultural sector while also initiating a broad review of Canada's cultural policies;
    • Change the Investment Canada Act in order to become more open to the world and reduce barriers to foreign investment by:
    • Increasing Canada's threshold for investment review to $1 billion in
      enterprise value, and applying this threshold to all non-cultural
    • Shifting the onus to the Minister to say why a foreign investment is not in Canada's "national interest";
    • Increasing transparency, predictability and reporting; and
    • Initiating a comprehensive review of Canada's cultural policies.
  • Liberalizing investment restrictions in the Canadian air transport, uranium mining, and telecommunications and broadcasting sectors, and removing the de facto ban on mergers in the financial services sector;
    • Introduce greater liberalization of investment restrictions in regulated sectors in order to increase Canada's competitiveness by:
      • Reviewing air transport, uranium mining, telecommunications and broadcasting, and financial services regimes every five years;
      • Allowing up to 49 percent foreign ownership of air carriers on reciprocal basis;
      • Liberalizing foreign ownership restrictions in uranium mining, subject to a new national security regime, and obtaining greater rights to develop nuclear resources or process uranium;
      • Allowing foreign firms to establish or acquire Canadian telecommunications companies with less than a 10% market share, and, following a review of broadcasting and cultural policies, further liberalizing investment restrictions in the telecom and broadcasting sectors;
      • Retaining the financial services sector's "widely held" rule, while removing the de facto prohibition on mergers of large financial institutions, subject to regulatory safeguards.
  • Updating and modernizing the Competition Act in line with best practices internationally;
    • Update the Competition Act and improve economic efficiency by:
      • Reforming Canada's merger review procedures to more closely mirror international and US practices;
      • Repealing outdated or ineffective pricing provisions;
      • Replacing conspiracy provisions with criminal procedures for hard core cartels and civil procedures for other types of anti-competitive agreements, and decriminalizing resale price maintenance; and
      • Providing general penalties for abuse of dominant position violations, and repealing industry-specific rules and penalties.
  • Creating a Canadian Competitiveness Council to give voice to and advocate for competition in Canada, and ensure sustained attention by governments on national competitiveness.

As part of the Panel's national competitiveness agenda, the Report also identifies a number of broad public policy priorities bearing on Canada's competitiveness, and makes recommendations for action in these areas with the goal of making Canada a location of choice for global talent, capital and innovation.

These specific public policy priorities for action are:

  • Taxation - lowering corporate income taxes, eliminating capital taxes,
    reducing personal income taxes for lower and middle income Canadians,
    and harmonizing provincial sales taxes with the GST;
  • Attracting and developing talent;
  • Head offices and cities;
  • Fostering growth businesses;
  • Strengthening the role of directors in mergers and acquisitions - placing directors of Canadian public companies
    on a comparable footing with their Delaware counterparts when
    exercising their fiduciary duties in relation to acquisition
  • The Canadian economic union - - eliminating all internal barriers to the
    free flow of goods, services and people within 3 years, and
    harmonizing federal and provincial environmental assessment policies
    and procedures;
  • Canada-US economic ties - addressing Canada-US border "thickening" as
    Canada's number one trade priority;
  • International trade and investment - setting an ambitious timeline to
    conclude foreign trade and investment agreements with priority
    countries, incorporating comprehensive business input;
  • Regulation - assessing all regulations against competitiveness
    impacts, and harmonizing product and professional standards with the
    US, unless public policy considerations dictate otherwise; and
  • Innovation and intellectual property - ensuring R&D and innovation
    policies support both domestic and global investment, and that new
    copyright legislation, patent laws, and counterfeit and piracy laws
    reward creators and further competition and innovation.

It will be interesting to see whether the recommendations will be adopted and will become law in Canada.  It should be noted that in 2003, an Industry Canada committee recommended the lifting of foreign ownership restrictions applicable in to the telecommunications industry.  In 20067, the Telecommunications Policy Review made the same recommendations as the Competition Policy Review Panel

For more information, please go to the Competition Review Policy Panel website -

Please contact Cyndee Todgham Cherniak who is a member of Lang Michener LLP's Business Law and International trade Law Groups (416-307-4168).

Leave a Reply

remember my information