The long anticipated report (“Report”) of the Competition Policy Review Panel (the “Panel”) entitled “Compete to Win” released in mid-summer may well have been sub-titled “Send us your money: we’re open for business”. Indeed the opening paragraph of Industry Canada’s News Release was refreshingly candid, articulating that the intention of the series of recommendations was aimed at:

“making Canada a more attractive destination for talent, investment and innovation, as well as a sweeping national competitiveness agenda based on the proposition that Canada’s standard of living and economic performance will be raised through more competition in Canada and from abroad.”

More than a year in the making after extensive research and consultation, the report focussed on three broad main areas: a) liberalizing investment restrictions; b) modernizing the competition/antitrust regime; and c) creating an internationally competitive business environment.

As to liberalizing investment restrictions, the Report advocated amendments to the Investment Canada Act in a number of key areas, including raising the threshold for review to $1 billion (Cdn) enterprise value (from $295 million (Cdn) in 2008) with application to all noncultural sectors. However, of even greater interest, and somewhat unanticipated, was a recommended reversal in the onus of establishing “net benefit to Canada” from the foreign investor to the Industry Minister where a matter is reviewable. With respect to specifically regulated sectors, the Panel also exhorted liberalization of investment restrictions by: allowing up to 49% foreign ownership of airline carriers on a reciprocal basis; allowing foreigners to establish and acquire domestic telecom companies with less than 10% market share, and after additional review, further liberalizing investment restrictions in telecom and broadcasting; removing the de facto prohibition on mergers of large financial institutions; and liberalizing the foreign ownership restrictions in the uranium industry.

As to modernizing Canada’s antitrust regime, the Panel recommended changing the review process to more closely mirror the U.S. model, which will be very welcome from a timing perspective for cross-border M&A transactions. Another change aimed at moving closer to the U.S. antitrust regime would see replacing existing conspiracy provisions relating to hard core cartels with per se offences, such as price fixing. Other practices, such as resale price maintenance and predatory pricing would be decriminalized. Industry-specific rules and penalties would be repealed and a general penalty for abuse of dominance violations would be introduced.

Lastly, the Report addressed a number of key public policy priorities for action including: taxation (lowering corporate and personal income taxes, eliminating capital taxes, harmonizing provincial and federal commodity taxes); talent (greater specialization in post-secondary education, reforming immigration processes); corporate governance (putting directors of Canadian public companies on a similar footing with their Delaware counterparts in respect of fiduciary duties in acquisition proposals); Canada-U.S. economic ties (dealing with Canada-U.S. border “thickening” as a trade imperative); and international trade and investment (establishing a timeline to conclude key bilateral trade and investment agreements with priority jurisdictions.

The Panel’s recommendation for the creation of an independent Canadian Competitiveness Council with a broad mandate to advocate competition in both the public and private sectors is intended to move the competition agenda forward. Depending upon the outcome of the recently announced federal election, it can be expected that a number of the Panel’s recommendations in the Report will receive legislative priority in the next Parliament.