Friday, July 13, 2007

Canada Announces Competition Policy Review in Midst of Foreign Takeover Wave

This should be interesting to watch.

Yesterday, the federal government announced the creation of a Competition Policy Review Panel, to be chaired by Lynton Ronald Wilson, former CEO of telecom/media company BCE and currently the chairman of the board of CAE (flight simulators).
"The Panel's core mandate is to review two key pieces of Canadian legislation, the Competition Act and the Investment Canada Act, including the treatment of state-owned enterprises and the possibility of a national security review clause. The Panel will also examine Canada's sectoral restrictions on foreign direct investment, and the competition and investment regimes of other jurisdictions to assess reciprocity between their rules and Canada's. Separately, the Panel will also assess how Canada's policies may further encourage outward investment. The Panel will report to the Minister of Industry, on behalf of the Government of Canada, by June 30, 2008 with concrete recommendations to further enhance competition in Canada".
Canada's competition and foreign investment laws have not gone through any major review in 20 years.

This is all happening in the midst of a series of foreign takeovers of major Canadian enterprises that economic nationalist critics claim are having the effect of "hollowing out" the country's corporate structure.

Well-known Canadian firms that have been taken over by foreign investors in the near past include Inco, Dofasco, Falconbridge, Four Seasons Hotels and the über-Canadian icon Hudson's Bay Co. (aka "The Bay").

Coincidentally, the announcement was made hours after the Anglo mining conglomerate Rio Tinto concluded a $38.1 billion (U.S.) deal for Canadian aluminum maker Alcan. It will be the largest corporate takeover in Canadian history.

More from today's Globe and Mail article Alcan takeover fuels economic worry.

Further discussion of the "hollowing out" issue from the Canadian Broadcasting Corporation:

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posted by Michel-Adrien at 11:01 am

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