| FOR IMMEDIATE RELEASE
June 5, 2012
OTTAWA – The Canadian Bar Association (CBA) says that the part of the budget implementation bill that deals with changes to the Investment Canada Act (ICA), contained in Bill C-38, requires more detail in regulations before it comes into force.
Bill C-38 authorizes the federal government to accept security for payment for certain penalties that may be imposed under the ICA if the investor is found to be in breach of its undertakings to the government.
The CBA questions whether the security for payment proposal will increase compliance by foreign investors. “While the goal of promoting compliance with undertakings is laudable,” says Anthony Baldanza, Chair of the CBA’s Foreign Investment Review Committee of the National Competition Law Section, “the security for payment proposal is unlikely to achieve the desired outcome.”
The CBA submission notes that taking security would not materially expedite the enforcement process. If the government proceeds with the change, the CBA recommends that it take effect only when regulations are in place to outline the circumstances in which security may be taken and the nature and amount of the security.
The CBA favours a greater openness and transparency for ministerial reasons for accepting or rejecting a foreign acquisition. According to the CBA brief, “Issuing reasons in all cases would establish a body of decisions to assist foreign investors in understanding the rules for investing in Canada and demonstrate and help ensure that decisions are made on a principled basis.”
The CBA says that these ministerial opinions – with commercially-sensitive information removed – could form a body of helpful guidance and ensure consistency in application of the Act and provide a valuable resource to potential foreign investors in the future.
Along with its specific concerns, the CBA objects to the omnibus style of legislation in Bill C-38. “The significant impact and sweeping nature of the changes, and the quick timeframe for its passage, militate against meaningful comment or debate,” says the CBA letter, available on the CBA website.
The CBA has also provided its views on amendments in Bill C-38 to the Corrections and Conditional Release Act and to the Immigration and Refugee Protection Act to the House of Commons Finance Committee and the Senate National Finance Committee.
The CBA is dedicated to improvement in the law, the administration of justice, and support for the rule of law. Some 37,000 lawyers, law teachers, and law students from across Canada are members.
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The Canadian Bar Association
613-237-2925, ext. 146