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

Abbotsford International Airshow opening 50-year-old time capsule

Bronze time capsule was put together to commemorate AIA as Canada’s National Airshow

Rainfall records fell in deluge Saturday across the Fraser Valley

The steady rain broke the May 30 record in Chilliwack for rain with one day total of 31.7 mm

Abbotsford’s UFV gym now without a sponsor

Partnership with Envision Financial ends, school seeking new organizations to partner with

Road washout affecting section of Highway No. 3 near Manning Park

Road maintenance crews are on the scene, with an almost two kilometre long stretch impacted

CBC Bearcats hire Rebecca Garner as women’s volleyball head coach

Abbotsford-based team hires former Bearcat, Briercrest star to lead program

VIDEO: Injured bald eagle rescued in B.C. First Nations community

Bird suspected injured in fight, whisked off to Coquitlam rehab

Facing changes together: Your community, your journalists

New platform allows readers to make a one-time or ongoing donation to support local journalism

Love flourishes at Peace Arch Park, but COVID-19 concerns loom

South Surrey park becomes only place for international couples to meet

UPDATE: B.C.’s Central Kootenay issues evacuation orders for hundreds of residents due to flooding

An evacuation alert covers all areas except the Cities of Castelgar and Nelson

PHOTOS: Thousands gather at Vancouver Art Gallery to protest racism

Rally is in response to the deaths of black Americans and a Toronto woman

Number of students returning is a wild card as B.C. schools reopen Monday

A common model will see other teachers work four days a week in class then the fifth remotely,

Human Rights Tribunal denies church’s request to toss out White Rock Pride Society’s complaint

Star of the Sea and White Rock Pride Society to go to Human Rights Tribunal hearing

Most Read