Feds form panel to review foreign investment legislation

On the heels of London-based Rio Tinto‘s (RIO-N, RIO-L) friendly takeover bid for Montreal-based Alcan (AL-T, AL-N), comes news that the federal government will create a Competition Policy Review Panel.

The panel will review key elements of Canada’s competition and investment policies to ensure that they are working to help Canada remain competitive in an increasingly cutthroat world economy.

“The global economy has changed significantly in the last decade. Trade agreements have opened national markets, while international investments have reached unprecedented levels,” says Maxime Bernier, federal minister of industry. “Our competition and investment policies must be working fully to the benefit of Canadians in this environment.”

In particular, the panel will review two key pieces of Canadian legislation: the Competition Act and the Investment Canada Act, including the treatment of state-owned enterprises and the possibility of a national security review clause. Neither piece of legislation has been substantially changed in more than 20 years.

The panel will also examine Canada’s sectoral restrictions on foreign direct investment, and the competition and investment regimes of other jurisdictions to assess reciprocity between their rules and Canada’s.

Separately, the panel will look at how Canada’s policies may further encourage outward investment.The panel will report to the minister of industry, on behalf of the federal government, by June 30, 2008, with its recommendations to further competition in Canada.

The panel will be chaired by Lynton “Red” Wilson, a former chairman of Bell Canada Enterprises. Joining Wilson are four others, namely Murray Edwards, Isabelle Hudon, Thomas Jenkins and Brian Levitt.

Edwards is owner and president of Edco Financial Holdings, a Canadian merchant bank; Hudon served as an executive with the Canadian Space Agency, Bombardier Aerospace, and BCE Media; Jenkins is executive chairman and chief strategy officer with Waterloo, Ont.-based software developer Open Text Corp.; and Levitt is co-chair of law firm Osler, Hoskin & Harcourt and one of Canada’s best-known corporate governance and mergers and acquisitions advisors.