Skip to main content

The Globe and Mail

Ottawa to lift veil on reviews of foreign takeovers

Ottawa rejected BHP Billiton's $38.6-billion takeover offer for Potash Corp. of Saskatchewan


The Harper government is injecting more transparency into Ottawa's process for reviewing foreign takeovers of Canadian companies, loosening a gag that has traditionally prevented his ministers from explaining why a deal was rejected.

The government is changing the Investment Canada Act to give the federal Industry Minister more freedom to talk openly about why he or she blocked a foreign takeover.

Prime Minister Stephen Harper is trying to boost investor confidence in Canada after a couple of rejected deals that sent confusing signals about this country's enthusiasm for outside investment.

Story continues below advertisement

In November, 2010, for instance, the government blocked one of the most controversial foreign takeovers in Canadian history and then gave conflicting explanations for its decision.

Gerry Ritz, the Conservatives' political minister for Saskatchewan, told the Commons at the time that rejecting BHP Billiton Ltd. 's $38.6-billion (U.S.) offer for fertilizer company Potash Corp. of Saskatchewan Inc. was an attempt to preserve international clout.

He said Ottawa regarded potash – a key ingredient in fertilizer – as a "strategic resource," suggesting that Ottawa was increasingly concerned that a hands-off attitude to foreign investment might not serve the national interest when it comes to supporting companies that have a dominant position in important sectors.

"From a strategic standpoint, I think we have it in spades here," Mr. Ritz told the Commons at the time.

But then-industry minister Tony Clement later backed away from the idea of potash as a strategic resource, pointing out the word "strategic" does not even appear in the Investment Canada Act.

On Friday, Industry Minister Christian Paradis said he hopes the changes will encourage outside investors to feel more confident about sinking capital into Canadian businesses.

"We want our foreign investment review process to continue to promote economic growth, job creation and prosperity in Canada," Mr. Paradis said in a prepared statement.

Story continues below advertisement

The changes announced would allow the Industry Minister to publicly disclose that he has sent notice to a foreign company that he is "not satisfied that the investment is likely to be of net benefit" to Canada.

"They would also allow the minister to publicly explain ... reasons for sending the notice as long as it would not cause harm to the Canadian business or the investor."

In 2008, the Harper government also surprised international investors by rejecting a bid by Minneapolis-based Alliant Techsystems Inc. to acquire the space division of Vancouver-based MacDonald Dettwiler and Associates Ltd.

Report an error Editorial code of conduct Licensing Options
Tickers mentioned in this story
Unchecking box will stop auto data updates
As of December 20, 2017, we have temporarily removed commenting from our articles as we switch to a new provider. We are behind schedule, but we are still working hard to bring you a new commenting system as soon as possible. If you are looking to give feedback on our new site, please send it along to If you want to write a letter to the editor, please forward to