Canada’s economy attracted a lot of positive press while the rest of the world lingered in recession. Foreign investors were paying attention, and they too now want a piece of the good life in a rules-based, free-market economy with a lot of potential, particularly in the mining, energy, and high-tech sectors.
As a result, the Canadian mergers and acquisitions market, already up in 2010, is expected to grow even further in 2011. Depending on the industry, much of the investment will come from outside Canada. In some cases, it will mean foreign businesses will get controlling shares of Canadian companies. Canada is open for business, and it should remain that way. Thankfully, Canadian governments largely understand and respect that foreign investment is ultimately good for Canadians.
However, when Ottawa stepped in to stop the unsolicited takeover of Potash Corp. of Saskatchewan by Australia’s BHP Billiton Ltd. last year, there were natural questions. Is this the first in a series? Are we entering a new era in which Canada will be more rigorous in making sure its natural resources remain in the hands of Canadian companies? Is Canada being stricter than other countries around the world? These questions are explored in-depth in our cover story “Fortress Canada?” on page 16.
For now, the answer to those questions appears to be no. Ottawa has used its right to block foreign takeovers under the Investment Canada Act sparingly and responsibly. It has done so only twice, including PotashCorp, and has had fairly good reasons in both cases. There is no indication it will act any differently in the future.
In the longer term, depending on how the global economy goes and how other countries act, all cards might be on the table. We could end up with either a stricter or looser interpretation of the ICA’s core mission: to “provide for the review of significant investments in Canada by non-Canadians in order to ensure such benefit to Canada.” But for now, the balance seems just right.
Also in this issue, we look at how electronic tools are increasing efficiency in legal departments, as our “Beyond paper” feature shows on page 26. In addition, the approval of the much-awaited Canada Consumer Product Safety Act will more stringently regulate product recalls, as the “Safety first” article indicates on page 31. We also have a look at problems the Canadian biotech industry is facing (page 35) and new global challenges to attorney-client privilege thanks to a European court ruling (page 39).
Beyond the print edition, I also want to remind all of you to visit our web site, canadianlawyermag.com/inhouse, where our web-exclusive content grows every week. Since the beginning of the year, our group of publications has also been busy with a new daily blog, Legal Feeds, which often contains material relevant to an in-house counsel and business-executive audience. As well, our LinkedIn group is now approaching 100 members, so if you use the service and haven’t joined yet, please do so for a chance to network with your colleagues and us.