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

Morning start: This famous singer is from the West Kootenays

Here is your Kootenays’ morning start for Tuesday, May 26

RDCK recycling depots to join RecycleBC program

Some depots open, others close, and different materials will be accepted

West Kootenay SAR crews rescue injured mountain biker near Rossland

Crews were called in to help after the biker seriously injured himself at around noon Saturday

Suspected fentanyl and cocaine seized during RCMP search in Castlegar

Two men were taken into police custody during the search warrant

Castlegar and Creston skate parks opening May 27

The RDCK is asking skateboarders to take physical distancing protocols to combat spread of COVID-19

Facing changes together: Your community, your journalists

The COVID-19 pandemic has changed the world in ways that would have… Continue reading

‘Paralyzed by fear’: B.C. woman details anxiety, grief at Italian relief hospital

Sheila Vicic spent two months in Italy as the country grappled with COVID-19

Dr. Bonnie Henry given new name in B.C. First Nation ceremony: ‘one who is calm among us’

The provincial health officer was honoured in a May 22 ceremony at elementary school in Hazelton

CAMH survey looks at binge-drinking, financial anxiety during COVID

Alcohol may be used as a coping mechanism for those whose careers may have been sidelined due to the pandemic

Half of Canadians say governments are hiding something about COVID-19: poll

More than a third of people believe the virus was created in a lab

Kelowna man charged with harming a hamster

The 20-year-old Kelowna man faces several animal cruelty charges

High tech fish transport system set up to ‘whoosh’ salmon past Big Bar landslide

Fish will spend roughly 20 seconds inside the system, moving at roughly 20 metres per second

Trudeau to seek 10 days of paid sick leave for Canadian workers, says talks are ongoing

Paid sick leave is key to keeping COVID-19 spread under control, prime minister says

Most Read