Legal Feeds Blog

Tuesday, 29 May 2012 12:11

Quebec lawyers take to streets to protest Bill 78

Lawyers in formal court dress mingled with pot-banging demonstrators of all ages in a central Montreal square yesterday after some 500 jurists took to the streets to protest against Quebec’s Bill 78.

The law, passed in efforts to get protesting Quebec students back to class, restricts freedom of assembly, protest, or picketing on or near university grounds, and anywhere in Quebec without prior police approval. The law also places restrictions upon education employees right to strike.

Some 500 lawyers took to the streets of Montreal to protest Bill 78, which they say tramples Quebeckers’ rights. (Photo: Carl-Philippe Simonise)

Rousing cheers met hundreds of lawyers and notaries as they filed into Place Émilie-Gamelin — one of the focal points for nightly protests in Quebec’s widening political and social crisis — following a solemn march in near silence that began almost two hours earlier at Montreal’s Palais de Justice, the main courthouse.

“We are here to express our concern with the lack of confidence of a growing number of our fellow citizens toward our judicial institutions that are there to uphold fundamental individual and collective liberties and the primacy of the law,” litigator Rémi Bourget, one of the organizers of the march, shouted through a megaphone.

“We are also officers of justice and many of us will be on the front lines of the fight to have the law declared illegal,” said Bourget, calling Bill 78 “a disproportionate attack on our freedom of expression, association, and of peaceful protest.”

Yesterday’s street protest by legal professionals of all stripes really began last week, a few days after Bill 78 was adopted with a few lawyers sharing concerns about its implications on a Facebook page, Bourget said before the march. That quickly morphed into plans for a formal protest to “remind people of the dignity of our function [as lawyers] and our system of justice” in a “spontaneous grouping that is independent of any organization or political party.”

“I am outraged by this law that bullies the rights of association and the individual right to protest that was adopted with the goal of putting an end to the conflict rather than focusing on the problem and settling it,” said Nathalie Belley, a solo practitioner and a litigator with 20 years of experience who travelled from Chambly, a city about 25 kilometres southeast of Montreal to attend Monday’s march. “It erodes the future of democracy and the idea that a special law can be adopted to control the population at large is scary.”

Besides the protest march, hundreds of Quebec lawyers have volunteered their time or sent input for a court challenge on the constitutionality of Bill 78 by some 124 individuals, community organizations, unions, and Quebec’s three main student groups that is set to be heard before a judge of Quebec Superior Court this Friday.

Changes to foreign investment review aim for more clarity

Proposed changes to the review and enforcement of foreign investments under the Investment Canada Act should provide greater transparency to Canadians and make for a more appealing environment for foreign investors.

Proposed changes to the Investment Canada Act are ‘a positive message for foreign investors,’ says Subrata Bhattacharjee.

On May 25, the Industry Minister Christian Paradis announced three main proposed amendments under the act.

Of most significance is an amendment to the regulations which will, over a four-year period, change the financial threshold for review under the ICA from $330 million in asset value to $1 billion in enterprise value. This is to ensure the review process focuses on the most significant transactions, says Subrata Bhattacharjee, a partner with Heenan Blaikie LLP in Toronto.

“This is a positive message for foreign investors,” says Bhattacharjee. “The previous standard of $330 million in asset value was probably seen to be too inclusive. It caught too many transactions in the net, which raised no serious net benefit let alone any national security issues. There is some legitimate questions to be raised on what exactly enterprise value will mean and when the draft regulations come out stakeholders will have a chance to see how it will work in practice.”

Once the regulations are in force, the investment review threshold will immediately rise from $330 million in asset value to $600 million in enterprise value for two years, then up to $800 million for two years, then to $1 billion (subsequently, the threshold will be indexed to reflect changes in Canada’s gross domestic product as is currently the case under the ICA).

The change was seen as critical to reducing the number of transactions subject to review on the perception that foreign investors in non-contentious acquisitions would find it as a barrier.

The current standard is based on the value of the assets according to the business’ financial statements, or book value.

A second change incudes the issuance of mediation guidelines that make formal mediation procedures available under the ICA as an alternative means of voluntarily resolving disputes when the minister believes a non-Canadian investor has failed to comply with an undertaking given in connection with an investment.

“Most foreign investors would not want to see a situation as happened in U.S. Steel, where several years after making the acquisition you’re engaged in litigation that goes all the way to the appellate courts about your Investment Canada undertakings,” says Bhattacharjee.

For many years, if a foreign investor agreed to maintain employment at a Canadian plant it intended to acquire, it was required to so for a period of time unless circumstances were out of its control. What began to happen, partially as a result of the recession, was as some foreign investors made significant acquisitions in Canada they began to try and rationalize operations. In the case of U.S. Steel Corp., the government litigated to try and hold the company to employment obligations it said it had made when it bought Canadian steelmaker Stelco.

“U.S. Steel was indicative of a new era in how we treated commitments foreign investors made when they came into Canada,” says Bhattacharjee. “Part of the criticism at the time was there was concern foreign investors were walking away from employment or financial commitments they had made.”

The amendments will also include publication of an annual report by Industry Canada on the administration of the ICA.

“One of the comments that has been made about the Investment Canada process is that it’s fairly black box. That works to the advantage of the foreign investor and the government but, having said that, we have had a stream of high-profile cases where Canadian companies have been acquired by foreign investors and two high-profile blocks with MacDonald Dettwiler and Associates and BHP Billiton Ltd. bid for Potash Corp.,” says Bhattacharjee.

In both MacDonald Dettwiler and Potash the government did not provide a comprehensive statement on the reasons for blocking those deals.

“Transparency is another perceived issue the government is trying to address with these changes. In general the government wants to try and liberalize aspects of our foreign investment regime and so the announcements are consistent with those goals,” says Bhattacharjee.

At the same time, he says the changes are seen as strengthening the act.

“I think there has certainly been criticism about the ability of the minister to ensure that foreign investors who make commitments or undertakings as a condition to getting a net benefit determination are actually upheld.”