Investment Canada

Invest In Canada is the Government of Canada organization that promotes and attracts foreign direct investment into Canada. As a bureau in the Department of Foreign Affairs, Trade and Development Canada, Invest In Canada assists companies planning to invest in Canada or to expand their Canadian operations. The department was created in 1985 by the Investment Canada Act. Recent practice by the Harper government has been to limit foreign investment to no more than 50% share,^[1] a policy designed by Nigel S. Wright during his time at the PMO, although that was thrown out the window prior to the Oliver budget of April 2015 with the sale of a 50.1% share in the Canadian Wheat Board.^[2]

Foreign direct investment (FDI) by country^[3] and by industry^[4] are tracked by Statistics Canada; the total in 2012 of FDI was CAD$634bn.^[3] New FDI inflow to Canada in 2011 was CAD$40.8bn.^[5] Canada was host to CAD$33bn in state-owned enterprise investment over the period between 2005 and 2012.^[6] Over the same period, the net FDI increased by CAD$236.1bn, so that SOE FDI was almost 14% of the total. Conversely, Canadian SOEs limit themselves to domestic affairs. The SOE of Canada are not aggressive in this manner: Canadian SOEs have no foreign investments.

The Canadian government is planning to raise to CAD$1bn the amount of foreign money that can go into a Canadian company before the investment is reviewed. As of 2012, an investment or takeover of a Canadian business by a WTO investor worth CAD$330mn or more triggers a federal review under the Investment Canada Act. The WTO was implemented in Canada by the World Trade Organization Agreement Implementation Act in 1994.^[7] Industry Canada provides a helpful webpage with this information, and explains that WTO members are eligible for CAD$344mn review-free investment as of 12 January 2013.^[8] The WTO maintains a membership list.^[9] The information on the WTO "amount" permitted by discretion of the Minister of Industry under subsection 14.1(2) of the Investment Canada Act is published annually in January in the Canada Gazette. The government investigates whether the investment is of "net benefit" to Canada, which brings into play a nebulous political definition.^[10] Amounts inferior to this limit do not incur political oversight under the Investment Canada Act, so that the foreign investor is treated like any other Canadian investor. This means effectively, that Canada is open to reverse takeover by stealth. Prime Minister Harper clarified this FDI policy area in Toronto on 7 November 2013 when he said that a little wiggle room was needed on foreign takeover rules.^[11]

Services

Invest In Canada can guide companies through every step of the investment process, from the exploratory phase through to site selection and follow up: it will provide companies with a wealth of information about doing business in Canada and introduce them to specialists who offer one-on-one assistance customized to meet particular needs.

Canada has a global network of investment and trade professionals present in more than 150 cities worldwide to assist companies in making Canada their next investment destination. This global network can help if a company is considering their own Canadian operation, working with a Canadian partner, or gaining a Canadian base for access to North American markets.

Investment and Trade Professionals

Canada's investment professionals can provide companies with strategic intelligence and put them in touch with the right contacts in Canada.

Services Available to Companies

Invest In Canada offers a wide range of services. These include:

• Strategic market intelligence on specific sectors in the context of the Canadian and North American marketplace
• Referrals to a variety of contacts with private-sector industry associations and professionals such as bankers, lawyers, accounting firms, and information specialists
• Information and advice on how to set up a business in Canada, taxation, R&D incentives, regulations and financial and non-financial government programs specific to an industry sector
• Facilitation of site visits to support companies in the identification of a strategic location for their investments and enhance their business opportunities/strategic alliances in a welcoming environment
• Assistance in developing a business case for investment decision.

Bonds

On 5 November 2013, British Columbia finance minister Mike de Jong reported a successful placement of Chinese RMB$2.5bn in dim sum bonds.^[12] The issue was five times oversubscribed.

Contacting Invest In Canada

Invest In Canada's global network will show companies why Canada is an ideal strategic choice for growth. By contacting the nearest Canadian Embassy, High Commission, or Consulate, a company can get information and assistance they need to make the right decisions. It is unclear who holds the reins at Investment Canada; a total of five ministers and four parliamentary secretaries are listed on its webpage.^[13]

Investments

2004

• On 8 March 2004, The J.M. Smucker Company bought International Multifoods Corporation for cash US$500M and considerations of $340M.^[14] This included Robin Hood Flour, Red River Cereal, Bick's Pickles and Monarch Flour, among a dozen other brands.^[15]

2005

• On 21 August 2005,TUI AG unit Hapag-Lloyd agreed to acquire CP Ships Limited, including its Port of Montreal transshipment wharf, for €1.7bn (US$2bn) in cash. It has now made the combined fleet the fifth largest by capacity in the worldwide container shipping market.^[16] In 2006 the CP Ships name disappeared for good. TUI AG plans to divest of Hapag-Lloyd, which is a 37% German SOE.

2006

• In 2006 and 2007, Sinopec Shanghai Engineering Co. Ltd.'s Canadian subsidiary named SSEC Canada Ltd was hired by Canadian Natural Resources to build a structure on their Horizon Oil Sands project. On 24 April 2007, two Chinese temporary foreign workers were killed and five other Chinese temporary foreign workers were injured. SSEC was fined in October 2012 CAD$1.5mn for the incident. Investigations later determined that 132 SSEC workers had been unpaid since the start of their employment with SSEC. SSEC fled the country and the government was unable for a number of years to serve it legal documents.^[17][18]
• In January 2006, ArcelorMittal took over Dofasco, for CAD$5.5bn.^[19]
• In August 2006, Xstrata (subsequently delisted) CAD$16bn purchased for US$22.5bn Falconbridge Ltd. (subsequently delisted)^[20]
• In October 2006, Vale purchased 86% of INCO (subsequently delisted) for CAD$15bn^[21]

2007

• In January 2007, Bowater merged with Abitibi Consolidated to form a 52-48 joint venture called AbitibiBowater.^[22]
• In April 2007, Algoma Steel was purchased by India's Essar Group for US$1.63 billion, continuing operations as a subsidiary known as Essar Steel Algoma Inc.
• In May 2007, a deal to acquire IPSCO steel (of Saskatchewan^[23]) for $7.7 billion was announced by SSAB Swedish Steel AB.
• In 2007, US Steel's CAD$1.9bn took over the bankrupt Stelco works (largely in Hamilton), subsequently idled in 2010 and finally shutdown in October 2013.^[24]
• In 2007, the UK Tate & Lyle conglomerate announced the sale of its Redpath Sugar refining business to American Sugar Refining
• In June 2007, the ED Smith Income Fund accepted a takeover for CAD$217mn from TreeHouse Foods of Chicago.^[25]
• In July 2007, Rio Tinto acquired Alcan Inc., in a US$38 billion deal.^[26] Rio Tinto Alcan subsequently divested itself of Alcan Engineered Products (to a consortium) and Alcan Packaging (to Amcor, announced in August 2009). In January 2013 the CEO in charge of the Alcan deal, Tom Albanese, stepped down in favour of Sam Walsh because he had overpaid.^[27]

2009

• In spring 2009, China Investment Corporation purchased a CAD$1.7bn 17% share ownership of Teck Resources.^[28][29]
• IPIC, which is wholly owned by the government of the Emirate of Abu Dhabi, 100% purchase of Nova Chemicals (subsequently delisted)^[30]

2010

• On April 12, 2010, ConocoPhillips agreed to sell its 9% share in Syncrude to Sinopec, a Chinese SOE oil company. The sale, for $4.65 billion, was completed on June 25, 2010.^[31][32]
• In April 2010, Merit Mining Corp. was taken over by Tianjin Huakan Group Co. Ltd. in a CAD$15.5mn deal,^[33][34] and in December 2010 subsequently renamed to Huakan International Mining Inc.^[35] The transaction was funded by Hong Kong Huakan Investment Corp., an opaque Chinese investor located at Unit 1105, 11/F, Tower 1, Lippo Centre No. 89 Queensway, Admiralty, Hong Kong.^[36][37][38]
• The Norwegian SOE, Statoil, formed a 65-35 joint venture^[39] with Husky Energy,^[40] which is controlled in Hong Kong by Li Ka Shing.^[41]

2011

• Pohang Iron and Steel Company joint venture with Fortune Minerals, a $768mn project^[42]
• HD Mining International was taken over by Huiyong Holdings (BC) (55%) and Canadian Dehua Lvliang Ltd. (40%) to operate the Murray River project. Huiyong Holdings (BC) is 100% owned by Huiyong Holdings China, an opaque Chinese investor.^[43][44]

2012

• In October 2012, TransCanada Corporation and Phoenix Energy Holdings (aka PetroChina SOE) formed a 50-50 joint-venture CAD$3bn Grand Rapids Pipeline project in Northern Alberta (operated by Brion Energy Corp.).^[45]
• Athabasca Oil Corp. and Phoenix Energy Holdings (aka PetroChina SOE) 40-60 joint-venture in Dover oil sands project.^[46]
• In December 2012, Malay SOE, Petroliam Nasional, purchased for CAD$6bn Progress Energy (since delisted).^[28][47]
• In December 2012 was formed Baffinland, now a Nunavut Iron/ArcelorMittal 50-50 joint venture, with the latter as Project Operator^[48]

2013

• On 14 January 2013, JSC «Atomredmetzoloto», a unit of ARMZ Uranium Holding, which in turn is controlled by Russian SOE, Rosatom, bid US$1.3bn for the 49% stake it didn't already own in Uranium One, a Canadian miner with holdings in Khazakstan.^[49][50]
• On 29 January 2013, AltaGas and Idemitsu Kosan formed a 50-50 joint venture named Triton LNG Limited Partnership, to export Alberta LNG to Japan.^[51][52]
• In February 2013, ExxonMobil took over Celtic Exploration Ltd. in a deal valued at CAD$3.1bn^[53][54] because of holdings in the Duvernay Formation.^[55]
• In February 2013, CNOOC (a Chinese SOE) purchased for CAD$15.1bn Nexen Canada^[56]
• In June 2013, the H. J. Heinz Company was sold to Berkshire Hathaway and 3G Capital of Brazil for CAD$28bn.^[57] The deal had been agreed in February of that year.^[58] Included in this deal was the Heinz tomato ketchup plant in Leamington, which later was closed in November 2013,^[57] after the October announcement by McDonald's that they would stop serving Heinz products in their restaurants, because the CEO hired by Heinz, Bernardo Hees, was then vice-chairman of Burger King, which was at the time owned by 3G Capital.^[59]
• In November 2013, Talisman Energy sold 75% of its Montney Formation gas holdings to Petronas SOE for CAD$1.5bn.^[60] The transaction involves 127,000 acres.^[61]
• In November 2013, Petronas SOE 90% subsidiary Pacific Northwest LNG announced its plans to build a CAD$11bn LNG terminal on Lelu Island. The plant is still in its early design phases; only 25 employees have been hired.^[62]
• In December 2013, EnCana and PetroChina SOE formed a 50.1-49.9 joint venture (total CAD$4.4bn) to develop the Duvernay Formation in Alberta.^[53]
• On December 16, 2013, it was announced that Reynolds Consumer Products Inc., subsidiary of Rank Group Ltd. of New Zealand, planned to purchase aluminum products manufacturer Novelis, subsidiary of Hindalco of India for CAD$35mn.^[63]
• On December 24, 2013, Sherritt International divested itself of Alberta and Saskatchewan coal properties valued at CAD$465mn to the benefit of Colorado-based Westmoreland Coal^[64]

2014

• On 31 January 2014, Norwegian SOE Statoil and Thailand SOE PTTEP announced their plan to split their 60-40 joint-venture in the Kai Kos Dehseh oilsands project, so that they would each control 100% of their own leasehold properties. PTTEP spent $2.3bn on the joint venture in 2011. PTTEP got the "Thornbury", "Hangingstone" and "South Leismer" leases, while Statoil obtained the "Leismer" and "Corner" properties and was to pay $200mn to PTTEP.^[65][66]

However, in September 2014, Statoil postponed its investment in the "Corner" project.^[66]

• On 12 February 2014, Mexican baker Grupo Bimbo announced a $1.83bn takeover of Canada Bread, a publicly traded corporation which had been controlled by Maple Leaf Foods.^[67] Canada Bread sales in 2013 were estimated at $1.6bn, and its employees numbered 5,400.^[67] By contrast, Bimbo employs 126,000 people at 144 plants in 19 countries, including Mexico, Latin and South America, the United States, Europe and Asia.^[67]
• Canada's fifth-largest independent oil producer, Talisman Energy, was purchased by Repsol, the Spanish oil major, for $8.3 billion plus the assumption of $4.7 billion of Talisman's debt.^[68][69]

The oil sands in Alberta cover a vast area, and the pipelines needed to ferry their output to the BC coastline, where it will be transported by ship to Asian markets, span a wide range of investments. Many joint venture projects with foreign firms exist because Canadian capital is insufficient. Examples of news articles that have yet to be harvested for this wiki are a CBC article,^[70] and the BC regulator,^[52] as well as p. 13 of a report from Ernst and Young.^[71]

2015

• On 16 April 2015 the Saudi Agricultural and Livestock Investment Co. (SALIC) partnered with U.S. agribusiness giant Bunge Limited to form Global Grain Group (G3), which will be the majority owner of Winnipeg-based Canadian Wheat Board with an investment valued at $250-million.^[2][72][73] As the principal was less than the government-regulated threshold, the investment incurred no review.

External links

• Official Invest In Canada website

References