Competition, Antitrust & Foreign Investment


The Throne Speech, which officially opened the Second Session of the 41st Parliament on October 16, 2013, included renewed commitments from the Canadian federal government to foreign investment and highlighted a number of consumer protection initiatives. Regarding foreign investment, the speech reiterated Canada's commitment to foreign investment, but with close scrutiny of investments made by state-owned enterprises. For more information on recent developments in this area, see our May 2013 Blakes Bulletin: Changes to Investment Canada Act for State-Owned Enterprise Investments. With respect to consumer protection, the Throne Speech emphasized a number of initiatives, including:

  • Taking steps to reduce roaming fees, unbundle television channel offerings and enhance high-speed broadband networks
  • Working towards greater transparency for the cost of different payment methods
  • Taking further action to end what the government sees as geographic price discrimination against Canadians, namely that consumers in Canada are charged more for identical goods that sell for less in the United States.

The Throne Speech is a mechanism for setting out the broad goals of the government. As such, there are no details available with respect to the government's plan to tackle these initiatives; however, the suggested areas of reform each invoke complicated economic and legal issues which will need to be addressed legislatively in order to implement change.

Blakes will report on the implementation of these initiatives as details become known.


In what marks a first under the national security review provisions of the Investment Canada Act (ICA), on October 7, 2013, the Canadian Cabinet (the federal executive branch) issued an order prohibiting a foreign investor, Accelero Capital Holdings (Accelero), from completing a proposed acquisition of control of a Canadian business, the Allstream subsidiary (Allstream) of Manitoba Telecom Services Inc. (MTS). The decision confirms the Canadian government's intention to invoke the national security review provisions where the government determines that a transaction is potentially injurious to national security.

By way of background, on May 24, 2013, MTS announced that it had signed a binding agreement to sell Allstream to Accelero for C$520-million. Accelero is an investment and management group with a focus on telecommunication, digital media and technology. Former executives of Orascom Telecom, Wind Telecom and VimpelCom established the company, which is backed by Naguib Sawiris, an Egyptian telecom entrepreneur and the former financial backer of Canada's Wind Mobile.

Allstream is a wholly owned subsidiary of MTS, which is the fourth-largest telecommunications provider in Canada. The company has operations across Canada, owning a national fibre optic network that provides telecommunications services to its customer base of approximately 65,000 Canadians and businesses (including the Canadian government).

The ICA review of the transaction took approximately five months to complete from the time the transaction was announced, which indicates that the Investment Review Division of Industry Canada, the Minister of Industry and Cabinet undertook a full national security review of the transaction. Although investors have abandoned transactions in other cases following the receipt of a notice that a national security review would be conducted, this is the first transaction since the enactment of the national security review provisions in 2009, in which a complete national security review was undertaken to the point of a Cabinet order.

According to the companies, Accelero made substantial commitments in support of its ICA application. Despite these commitments, the government rejected Accelero's application on "national security" grounds and declined to offer any reasons for its decision. The Canadian government's decision in this matter is further proof of its commitment to national security. The review once again highlights the importance for investors and target companies to understand the views of the Canadian government on such matters to the extent possible prior to commencing the ICA process.


On October 3-4, 2013, the National Competition Law Section of the Canadian Bar Association held its Annual Competition Law Fall Conference in Ottawa. Key highlights from the conference include:

  • The Commissioner of Competition, John Pecman, in an open interview with Brian Facey, Co-chair of Blakes Competition, Antitrust and Foreign Investment Group, renewed the Competition Bureau's commitment to collaboration and compliance. In particular, Commissioner Pecman discussed the concept of "shared compliance", under which the Competition Bureau will promote compliance through publications, advocacy and enforcement, and the legal and business communities will be expected to reciprocate by increasing awareness of obligations under the Competition Act and putting in place and following credible and effective compliance programs.
  • In promotion of the goal of shared compliance, the Competition Bureau released two updated guidance documents in advance of the conference: updated Immunity and Leniency FAQs and an updated version of its Information Bulletin on the Communication of Confidential Information under the Competition Act.
  • Commissioner Pecman also announced the release of a draft bulletin regarding Communication during Inquiries, part of the Competition Bureau's Action Plan on Transparency.