When is a reputation change greater than a reputation change? When the change is a mirrored image of shifting authorities priorities and an enhanced give attention to nationwide safety scrutiny of inbound international funding in Canada.
The Overseas Funding Evaluation and Financial Safety (FIRES) Department is the brand new title of the federal government division most just lately generally known as the Funding Evaluation Division (IRD) of Innovation, Science and Financial Improvement Canada. The shift in emphasis on financial safety is the most recent in a sequence of strikes by the Canadian authorities which have elevated the usage of and give attention to the nationwide safety overview provisions of the Funding Canada Act as a part of Canada’s nationwide safety technique.
In 2017-2018, the Canadian authorities solely issued 4 (4) notices of potential overview underneath the nationwide safety provisions – a couple of small sparks of concern. By 2021-2022, the embers of nationwide safety curiosity had been clearly glowing, and the variety of notices flared as much as 24. The federal government has not but launched figures for the 2022-2023 fiscal yr, however primarily based on our expertise we count on there will likely be an additional important enhance in potential nationwide safety opinions performed by the federal government.
Different examples of this heightened focus embody the latest personnel appointments throughout the FIRES Department. Jamieson McKay, the brand new Director Basic, has important background with nationwide safety roles throughout the Canadian authorities, together with expertise on the Division of Nationwide Defence, whereas Marie Eve Roy Marcoux, the brand new Director of the Funding Evaluation Directorate, was beforehand the Director, Monetary Sector Integrity and Nationwide Safety on the Division of Finance. These appointments of civil servants with important nationwide safety expertise demonstrates the Canadian authorities’s give attention to managing nationwide safety threats via the Funding Canada Act.
Lastly, proposed amendments to the ICA are slowly burning their means via Parliament which, if handed, would require obligatory pre-closing notification for proposed investments by international traders in Canadian companies that function in to-be-prescribed “delicate” sectors and provides the Minister of Innovation, Science and Trade higher powers throughout nationwide safety opinions. For extra info on these amendments, see our weblog publish.
Nationwide safety has grow to be a sizzling subject and is clearly a serious precedence for the Canadian authorities. Overseas traders seeking to spend money on Canadian companies (together with international companies with Canadian subsidiaries), particularly these which function in delicate sectors, ought to interact Canadian counsel upfront of implementing such investments to assist mitigate potential dangers and keep away from getting burned.[View source.]