June 17, 2008

The Honourable Céline Hervieux-Payette, PC
Leader of the Opposition in the Senate

News Release

Protecting Canada's Interests Against Some Foreign Acquisitions

OTTAWA, June 17, 2008 - The Leader of the Opposition in the Senate, the Honourable Céline Hervieux-Payette, today will introduce a bill to amend the Investment Canada Act, a measure inspired by Bill C-386, which was tabled in the House of Commons by Etobicoke-North MP Roy Cullen.

"Over the last two years we have witnessed the proliferation of takeovers of Canadian companies by foreign corporations which are often state-owned or sovereign wealth funds. This issue must be put before the Parliament of Canada, and our parliamentarians must act, given the present government's unwillingness to protect our companies," Senator Hervieux-Payette said.

This bill includes ten clauses. It would allow the government to review any foreign investment intended to create a new Canadian corporation, if it considers the national interest to be at stake. It would allow the government to review any foreign investment intended to create a new Canadian corporation, if it considers the national interest to be at stake. This amendment would also apply to foreign takeovers of a Canadian business deemed contrary to national interest, and to investments whose total value is equal to or greater than $295 million.

"Contrary to other G-8 countries, Canada has no foreign investment review mechanism to protect the national interest. The only approval criterion we apply is that of "net benefit" provided in section 20 of the Investment Canada Act," MP Roy Cullen said. "We remain convinced, however, of the need to encourage foreign investments, and this bill will not affect this important principle", added Roy Cullen.

In 2006, for the first time since 1994, the combined value of Canada's foreign direct investment abroad in the energy and metallic ore industries did not surpass the combined value of foreign direct investments in Canada for those two industries.

Canada's deficit in the area of corporate takeovers exceeded $24.3 G (US) between 2005 and 2007, according to a study conducted by SECOR and the Conference Board of Canada. Canada is selling off more of its companies in the metal, energy and technology sectors than it is buying, with the accumulated deficit reaching $112 billion (CAN) (Canadian Press).

Marc Roy
Communications Director
Office of the Honourable Céline Hervieux-Payette, P C.
Leader of the Opposition in the Senate
613-947-8008