‘Guidelines will only take us so far’: Osler competition law expert

Peter Glossop, Osler, Hoskin & Harcourt LLP

Lack of clarity on foreign investment rules was the subject of headlines this week, after Ottawa announced last Friday that the proposed takeover of Progress Energy by Malaysian state-owned-enterprise (SOE) Petronas did not meet the “net benefit test.”

With a new policy framework on foreign investment expected in the not-too-distant-future, Peter Glossop, partner at Osler, Hoskin & Harcourt and leading advisor on foreign investment review, shared his take on the situation with Lexpert.

More detail in the SOE guidelines which outline the additional net benefit criteria would certainly be welcome, he says. “I do think guidelines will only take us so far. There needs to be more transparency around positive net benefit decisions which the Minister is authorized under the Investment Canada Act to do on a discretionary basis, but is not doing. Real reasons in real cases would be helpful to investors, advisors and the public. There is ample precedent for this practice;  the Competition Bureau issues statements on the approach taken in more difficult cases on a regular basis.

While more transparency is desirable, lawyers also recognize a lack of discretion may be problematic from the government’s perspective. As McCarthy Tétrault partner, John Boscariol told Canadian Lawyer earlier this week,

Whenever government comes up with guidelines, to an extent they’re handcuffing themselves — they’re putting something out there, they’re putting it in writing. So I can see why, from the government’s point of view, it may make sense to be as flexible as possible; to retain as much opportunity as possible to treat different foreign investors differently.

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