doing business in canada - Davies Ward Phillips & Vineberg LLP

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NAFTA investors. The concept of a "NAFTA investor" is similar to the definition of a "WTO investor", except thatit refers to individuals who are "nationals" of the United States or Mexico.CONSULTATIONSWhen IRD or Canadian Heritage receives an application for review, they consult with all the provinces in whichthe Canadian business has assets or employees, as well as federal government departments with relevantexpertise. This allows the affected provinces and departments to review the proposed investment and informIRD and/or Canadian Heritage if they have any concerns or objections. Finally, the Bureau is charged withproviding advice regarding the effect of the investment on competition in the relevant industry or industries inCanada.TIMING OF REVIEW PROCEDUREThe ICA sets out certain time limits for the review procedure. Within 45 days after a completed application hasbeen received, the Minister must either indicate whether or not he or she is satisfied that the investment is likelyto be of net benefit to Canada or extend the review period for a further 30 days, following which the Ministermust indicate his or her assessment regarding the likely net benefit to Canada. (However, if the Minister requiresmore time, the investor may be requested to consent to an extension of the review period.) Where the Ministerhas advised the applicant that he or she is not satisfied that the investment is likely to be of net benefit toCanada, the applicant has the right to make representations and submit undertakings within 30 days of the dateof the notice of the Minister's decision (or any longer period that may be negotiated).PROHIBITIONS AND REMEDIESNon-Canadians who implement a reviewable investment in contravention of the ICA may be ordered to divestthemselves of control of the acquired Canadian business. Generally, the ICA prohibits the implementation of aninvestment until the completion of the Minister's review, but this prohibition does not apply in somecircumstances, including an acquisition of control of a corporation incorporated outside Canada or where theMinister is satisfied that the delay in implementing the acquisition would result in undue hardship. However, incircumstances where closing before completion of the review is permitted, subsequent divestiture could berequired if the Minister is not ultimately satisfied that the transaction is likely to be of net benefit to Canada.Where a NAFTA investor has acquired a cultural business that is required to be disposed of under the ICA, thefederal government may acquire all or part of the cultural business.NATIONAL SECURITY REVIEWIrrespective of whether an investment is subject to a "net benefit to Canada" review, the ICA provides for thereview of investments that "could be injurious to national security".Under this process, Cabinet may, on the recommendation of the Minister, order a national security review. IfCabinet orders a review, the Minister is required to send a notice to the investor that the investment will bereviewed, and the proposed transaction cannot be completed while the review is pending. If the transaction hasalready been completed, a review can still be ordered (and remedies, including divestiture of the Canadianbusiness, can still be required) following implementation of the transaction.The expression "national security" is not defined and there are no monetary thresholds that must be exceededto trigger a national security review. Moreover, the general "net benefit" review threshold requirement that44 Foreign Investment
there be an "acquisition of control" of a "Canadian business" has been relaxed such that a national securityreview could occur where there has been an acquisition "in whole or in part" of "an entity carrying on all or anypart of its operations in Canada if the entity has (i) a place of operations in Canada, (ii) an individual orindividuals in Canada who are employed or self-employed in connection with the entity's operations, or (iii)assets in Canada used in carrying on the entity's operations".The national security review is carried out by the Minister in consultation with the Minister of Public Safety andEmergency Preparedness. The Minister has until 45 days following the filing of a notification or an applicationfor review, or until 45 days following implementation of a transaction not subject to notification or review, toissue a notice to a non-Canadian that its proposed investment may be subject to a national security review. Theentire review process can take up to 130 days.Alternatively, the federal Cabinet can order a national security review within 45 days of the filing of anotification or an application for review, or within 45 days of implementation of a transaction not subject tonotification or review, without a notice of possible review first being issued. If this occurs, the entire nationalsecurity review process can take up to 105 days.If, following the review, the Minister is satisfied that the investment would be injurious to national security, thenthe Federal Cabinet is authorized to take any measures that it considers advisable to protect national security,including imposing conditions on the investment or the outright prohibition of a proposed investment (ordivestiture in the case of a completed investment).Foreign Investment 45
Page 1 and 2: DOING BUSINESSIN CANADAYOUR COMPLET
Page 3 and 4: ONTENTSTABLE OF CONTENTSINTRODUCTIO
Page 5 and 6: IntroductionPOLITICAL AND CONSTITUT
Page 7 and 8: 5RealEstateIndustrial and Intellect
Page 9 and 10: accordance with directions from the
Page 11 and 12: TITLE INSURANCE, TITLE OPINIONS AND
Page 13 and 14: 11EnvironmentalLawIndustrial and In
Page 15 and 16: commercial activities, or carrying
Page 17 and 18: The federal government currently re
Page 19 and 20: 17Types ofBusiness OrganizationIndu
Page 21 and 22: provincial law cannot do so as of r
Page 23 and 24: partnership, limited partners’ li
Page 25 and 26: parties. In Québec, joint venturer
Page 27 and 28: 25Financing aBusiness OperationIndu
Page 29 and 30: The Civil Code of Québec provides
Page 31 and 32: 29CorporateGovernanceIndustrial and
Page 33 and 34: Instrument 58-101. The practices re
Page 35 and 36: 33CompetitionLawIndustrial and Inte
Page 37 and 38: BID-RIGGINGBid rigging is any agree
Page 39 and 40: anticompetitive agreements among co
Page 41 and 42: 39ForeignInvestmentIndustrial and I
Page 43 and 44: apply for Canadian citizenship. (Pe
Page 45: (D)GENERAL REVIEW THRESHOLDSThe fol
Page 49 and 50: Industrial and Intellectual Propert
Page 51 and 52: to perform or cause them to be perf
Page 53 and 54: Registration grants an exclusive ri
Page 55 and 56: PIPEDA applies in all provinces of
Page 57 and 58: Employment LawCanadian employment l
Page 59 and 60: displacement, laying-off, suspensio
Page 61 and 62: easonable cause to believe that the
Page 63 and 64: 63Retirement Plans, EmployeeBenefit
Page 65 and 66: • funding;• eligibility;• pen
Page 67 and 68: 67Temporary Entry andPermanent Resi
Page 69 and 70: INTERNATIONAL AGREEMENTSIn recent y
Page 71 and 72: immigrant in another class, he or s
Page 73 and 74: 73Bankruptcy andInsolvency Proceedi
Page 75 and 76: BANKRUPTCYBankruptcy results in the
Page 77 and 78: INTERNATIONAL BANKRUPTCYASSETS LOCA
Page 79 and 80: Tax ConsiderationsThis chapter prov
Page 81 and 82: TAX REPORTINGAnnual Tax ReturnsCana
Page 83 and 84: Québec has legislation that limits
Page 85 and 86: Amendments, SIFTs and their unithol
Page 87 and 88: Conversely, where a Canadian reside
Page 89 and 90: A person, whether resident in Canad
Page 91 and 92: APPENDIX I: CANADA’S IN FORCE TAX
Page 93: TORONTODAVIES WARD PHILLIPS & VINEB

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