Investors address Canada national security concerns

Foreign investors should continue to be mindful of a Canadian investment act that can trigger national security concerns.

Sandy Walker, a partner at Dentons Canada LLP, said that the Investment Canada Act (ICA) can be "very political".

The topic was discussed at the Canada China Industrial Cooperation Seminar on May 12 in Toronto. A Chinese delegation led by the China Chamber of Commerce for Import and Export of Machinery and Electronic Products participated.

According to Walker, it is important early in the investing process to develop relationships with the government along with public relations strategies, particularly for high profile or politically sensitive acquisitions.

In 2015, there were two national security cases involving Chinese companies.

One of those involved the blocking of a Chinese state-owned enterprise from establishing a fire alarm-making business in Quebec, near the Canadian Space Agency.

In the other case, a Chinese investor successfully challenged the Canadian government's rejection of its acquisition of a telecom business.

"There are fewer Investment Canada Act reviews now than before, because the review (value) threshold has gone up, so most investments if they are under $800 million, they just file a notification with the federal government," Walker said. "The new Liberal government has said that it is always open to global investment in a way that respects and defends Canada's interests."

Other seminar participants focused on the advantages of Sino-Canadian trade.

Ontario Minister of International Trade Michael Chan said that his province has a diversified and supportive business environment and a highly skilled and well-educated labor market. He expressed hope that Canada and China would expand cooperation agreements and further promote economic exchanges and trade.

Li Aihua, president of the Canada China Chamber of Commerce, believes that the combination of the two countries' advantages - Canada's advanced manufacturing industry and expertise in project management, and China's strong productivity and outstanding efficiency - can lead to more market share in the future.

"Many companies in the seminar from both sides wish they had met each other earlier," Li said. "From another angle, Canadian companies used to lack the knowledge of or bear skepticism about the Belt and Road Initiative. However, with the support from the governments of the two sides, the idea will meet both interests and create a positive environment for collaboration between Chinese and Canadian companies."

The Belt and Road Initiative, which refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road development plan, was created by President Xi Jinping in 2013.

"We are not only selling products here, but working together to build relations with our Canadian partners," said Wang Hongqi, one of the delegates from Guangzhou Minyard Martinez Musical Instruments.

renali@chinadailyusa.com