These days it seems everybody wants to collect as much information about you as possible. When commercial enterprises ask for more than they need to complete a transaction, it’s to make money – it either wants to sell your information or figure out how to sell more to you.
The government’s purposes for doing so aren’t always so clear.
The CBA’s Competition Law Section recently wrote to the Investment Review Division of Innovation, Science and Economic Development Canada to express its concern with unnecessary information being gathered in certain Investment Canada Act forms and under Investment Canada Regulations. The ICA delineates investments made by non-Canadians that can be reviewed to ensure an economic benefit for Canada or to safeguard national security.
“The CBA Section is primarily concerned that the IRD is interpreting the Regulations in a manner that calls for the provision of personal information from directors and officers of investors contrary to the requirements of the Privacy Act,” says the letter, signed by Section Chair Susan Hutton.
“Accordingly, we request that the IRD clarify that it will not collect this information, or alternatively, that the Regulations and forms will be amended to comply with the Privacy Act.”
One of the problems with the request for certain information is that the IRD doesn’t say why it wants information such as dates of birth or residential or email addresses of investors, nor doesn’t it specify the use to which that information will be put – something the Privacy Act requires.
“To the extent that information is necessary for a national security assessment (as we understand to be the unofficial reason to collect it), the Regulations should be amended to clearly indicate that residential addresses are being requested, and the forms themselves should specify the express purpose for the collection. In the interim, given the quasi-constitutional status of the Privacy Act, the Regulations should be interpreted so as not to interfere with the operation of that law.”
The letter also points out other issues identified by the Section that could be addressed through ministerial guidance or through revisions to the forms and Regulations.
For ministerial guidance, the Section recommends:
- Clarifying the distinction between a “state-owned enterprise” and ownership or voting interest of a “foreign state”
- Clarifying the level of detail required about the sources of funding for an investment
- Clarifying how post-closing earn outs are to be dealt with in the context of an asset transaction under section 3.5 of the Regulations.
For revisions to the forms and Regulations, the Section recommends a few housekeeping issues – such as deleting the requirement for the investor to provide a fax number, since most businesses no longer use fax machines, amending the forms to allow investors can skip certain questions, or including a “not applicable” option; and revising the Regulations to provide that where quarterly financial statements are not prepared, the most recent annual financial statements will be acceptable.