Prime Minister Justin Trudeau speaks during his daily press conference on COVID-19 in front of his residence at Rideau Cottage in Ottawa, on Sunday, April 19, 2020. THE CANADIAN PRESS/Justin Tang

Prime Minister Justin Trudeau speaks during his daily press conference on COVID-19 in front of his residence at Rideau Cottage in Ottawa, on Sunday, April 19, 2020. THE CANADIAN PRESS/Justin Tang

Feds increase scrutiny of foreign takeovers to protect firms hit by pandemic

The new measures announced over the weekend follow the lead of other countries in Europe

The federal government has moved to protect Canadian businesses battered by the COVID-19 pandemic or producing medical supplies from being gobbled up by outside interests by tightening the rules around foreign investments and takeovers.

The new measures announced over the weekend follow the lead of other countries in Europe and elsewhere by adding additional scrutiny to a range of proposed investments and transactions until the economy recovers from the pandemic.

“We recognize that countries around the world are looking at their own regimes and recognizing there are vulnerable businesses that are going to be important to our recovery who are perhaps exposed to foreign purchases in a vulnerable time,” Prime Minister Justin Trudeau said Sunday.

“So we will be strengthening our oversight and paying close attention to foreign investment in this country to ensure that there aren’t people taking advantage of this crisis.”

Foreign investments in Canadian businesses that deal with public health or the provision of what the government loosely defines as “critical goods and services” are among those that will get an extra close review, according to Innovation, Science and Economic Development Canada.

The federal government will also be examining all investments by companies or entities with direct or suspected links to foreign governments while some other investments will be required to apply for approval from the federal industry minister.

The added scrutiny comes as countries around the world are ramping up their at-home abilities to produce critical medical supplies and personal protective equipment for health-care workers and others working on the frontlines during the COVID-19 pandemic.

“As we strengthen our own domestic industry and production, we wouldn’t want a foreign investor to be able to take that production that is being made for Canadians in this moment of crisis and send it overseas,” Trudeau said.

“We also recognize that there are perhaps some startups with brilliant ideas that are facing a cash-crunch right now that we would very much want to remain Canadian for the coming years who could be exposed to predatory foreign investors.”

READ MORE: B.C. police can now issue $2,000 tickets for reselling medical supplies, price gouging

The government’s decision to add an additional layer of scrutiny is “prudent” given the circumstances in which Canadian businesses are currently finding themselves thanks to COVID-19, said Brian Kingston, vice-president of policy at the Business Council of Canada.

“Given what’s going on right now and the fact that corporate valuations are down, there is a risk that there might be opportunistic efforts by state-owned companies, other governments around the world to acquire companies in this environment,” he said.

At the same time, Kingston hoped the measures announced by the federal government and other countries are only temporary given Canada’s reliance on trade and foreign investment for its economic prosperity.

“My hope is that this is temporary in nature,” he said. “Of course countries will take a more strategic look at their medical supply chains just to make sure that they have built-in resiliency. But I’m hoping that this isn’t a permanent shift to a greater level of protectionism.”

Lee Berthiaume, The Canadian Press


Like us on Facebook and follow us on Twitter.

Coronavirus

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

An aerial shot of Cedar Valley Lodge this past August, LNG Canada’s newest accommodation for workers. This is where several employees are isolating after a COVID-19 outbreak was declared last Thursday (Nov. 19). (Photo courtesy of LNG Canada)
Forty-one positive COVID-19 cases associated with the LNG Canada site outbreak

Thirty-four of the 41 cases remain active, according to Northern Health

Maria Lewis president of the Prince Rupert Royal Canadian Legion accepts a $5,000 donation gifted via an artillery shell from Shawn MacDonald governor of the Prince Rupert Loyal Order of the Moose 1051 on Nov. 13.
Major donation overwhelms Prince Rupert Legion

Prince Rupert Moose Lodge 1051 donates $5,000 to local veterans organization

Air Canada /Jazz flight AC8280 on Nov. 16 from Vancouver to Prince Rupert had a confirmed case of COVID-19, said Air Canada on Nov. 20. (File photo)
Flight into city had confirmed case of COVID-19

Nov. 16 flight from Vancouver to Prince Rupert affected by coronavirus

Prince Rupert carving artist Henry Kelly is having his work installed on Nov. 20, as a permanent art exhibit at the Prince Rupert Regional Airport. The traditional cedar canoe is a welcome symbol to those arriving at YPR. (Photo: supplied)
Art unveiling ceremonies at YPR cancelled due to new pandemic restrictions

Coast Tsimshian Cultural Exhibit at Prince Rupert Regional Airport features local carvers

People wearing face masks to help curb the spread of COVID-19 cross a street in downtown Vancouver, on Sunday, November 22, 2020. The use of masks is mandatory in indoor public and retail spaces in the province. THE CANADIAN PRESS/Darryl Dyck
B.C. reports 17 COVID deaths, 1,933 new cases as hospitalizations surge over the weekend

There are 277 people in hospital, of whom 59 are in ICU or critical care

Workers arrive at the Lynn Valley Care Centre seniors home, in North Vancouver, B.C., on Saturday, March 14, 2020. It was the site of Canada’s first COVID-19 outbreak in a long-term care facility. THE CANADIAN PRESS/Darryl Dyck
Rapid tests ‘not a panacea’ for care homes, Dr. Bonnie Henry says

B.C. lacks capacity for daily tests of thousands of workers

(Delta Police Department photo)
Cannabis edibles found in Halloween bag lead B.C. police to illegal lab

Delta police arrested a man and a woman while executing a warrant at a residential property Nov. 20

A woman being arrested at a Kelowna Value Village after refusing to wear a mask on Nov. 22.(@Jules50278750/Twitter)
VIDEO: Woman arrested for refusing to wear mask at Kelowna Value Village

RCMP claims the woman was uncooperative with officers, striking them a number of times and screaming

Join Black Press Media and Do Some Good
Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

B.C. Liberal MLA Shirley Bond questions NDP government ministers in the B.C. legislature, Feb. 19, 2020. (Hansard TV)
Cabinet veteran Shirley Bond chosen interim leader of B.C. Liberals

28-member opposition prepares for December legislature session

Motorists wait to enter a Fraser Health COVID-19 testing facility, in Surrey, B.C., on Monday, November 9, 2020. THE CANADIAN PRESS/Darryl Dyck
COVID-19: What do rising positivity rates mean for B.C.? It’s not entirely clear

Coronavirus cases are on the rise but the province has not unveiled clear thresholds for further measures

A rider carves a path on Yanks Peak Saturday, Nov. 21. Two men from Prince George went missing on the mountain the next day. One of them, Colin Jalbert, made it back after digging out his sled from four feet under the snow. The other, Mike Harbak, is still missing. Local search and rescue teams went out looking Monday, Nov. 23. (Sam Fait Photo)
‘I could still be the one out there’: Snowmobiler rescued, 1 missing on northern B.C. mountain

As Quesnel search and rescue teams search for the remaining rider, Colin Jalbert is resting at home

More than 70 anglers participated in the bar-fishing demonstration fishery on Sept. 9, 2020 on the Fraser River near Chilliwack. DFO officers ticketed six people and seized four rods. A court date is set for Dec. 1, 2020. (Jennifer Feinberg/ Chilliwack Progress file)
Anglers ticketed in Fraser River demonstration fishery heading to court

Sportfishing groups started a GoFundMe with almost $20K so far for legal defence of six anglers

Most Read