Invest in Canada
| Company type | Government of Canada |
|---|---|
| Headquarters | Ottawa |
| Products | Inward Investment support |
| Website | www.investincanada.gc.ca |
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 and International Trade, 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.
Foreign direct investment by country[2] and by industry[3] are tracked by Statistics Canada; the total in 2012 of FDI was CAD$634bn.[2] New FDI inflow to Canada in 2011 was CAD$40.8bn.[4] Canada was host to CAD$33bn in state-owned enterprise investment over the period between 2005-2012.[5] 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.[6] 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.[7] The WTO maintains a membership list.[8] 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.[9] 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.[10]
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.[11] 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.[12]
Success Stories
- ArcelorMittal's January 2006 takeover of Dofasco, for CAD$5.5bn.[13]
- In January 2007, Bowater merged with Abitibi Consolidated to form a 52-48 joint venture called AbitibiBowater.[14]
- In April 2007, Algoma Steel was purchased by India's Essar Group for US$ 1.63 billion, continuing operations as a subsidiary known as Essar Steel Algoma Inc.
- In 2007, Rio Tinto acquired Alcan Inc., in a US$38 billion deal. Rio Tinto Alcan subsequently divested itself of Alcan Engineered Products (to a consortium) and Alcan Packaging (to Amcor).
- In May 2007, a deal to acquire IPSCO steel for $7.7 billion was announced by SSAB Swedish Steel AB.
- US Steel's CAD$1.9bn 2007 takeover of the bankrupt Stelco works (largely in Hamilton), subsequently idled in 2010 and finally shutdown in October 2013.[15]
- Xstrata (subsequently delisted) CAD$16bn purchase of Falconbridge (subsequently delisted)[16]
- Vale CAD$15bn 86% takeover of INCO (subsequently delisted)[17]
- China Investment Corporation CAD$1.7bn 17% share ownership of Teck Resources.[18][19]
- IPIC, which is wholly owned by the government of the Emirate of Abu Dhabi, 100% purchase of Nova Chemicals (subsequently delisted)[20]
- Petroliam Nasional CAD$6bn takeover of Progress Energy (since delisted).[18][21]
- CNOOC CAD$15.1bn purchase of Nexen Canada[22]
- On April 12, 2010, ConocoPhillips agreed to sell its 9% share in Syncrude to Sinopec, a Chinese state-owned oil company. The sale, for $4.65 billion, was completed on June 25, 2010.[23][24]
- Statoil 65-35 joint venture[25] with Husky Energy[26]
- Pohang Iron and Steel Company joint venture with Fortune Minerals, a $768mn project[27]
- Merit Mining Corp. was taken over by Tianjin Huakan Group Co. Ltd. in a CAD$15.5mn deal,[28][29] and in December 2010 subsequently renamed to Huakan International Mining Inc.[30] 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.[31][32][33]
- 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.[34][35]
- TransCanada Pipeline and Phoenix Energy Holdings (aka PetroChina) 50-50 joint-venture CAD$3bn Grand Rapids Pipeline project in Northern Alberta (operated by Brion Energy Corp.).[36]
- Athabasca Oil Corp. and Phoenix Energy Holdings (aka PetroChina) 40-60 joint-venture in Dover oil sands project.[37]
- ExxonMobil take-over of Celtic Exploration Ltd. valued at CAD$3.1bn[38][39] because of holdings in the Duvernay Formation.[40]
- Baffinland, now a Nunavut Iron/ArcelorMittal 50-50 joint venture, with the latter as Project Operator[41]
- AltaGas and Idemitsu Kosan formed, on 29 Jan 2013, a 50-50 joint venture named Triton LNG Limited Partnership, to export Alberta LNG to Japan.[42][43]
- EnCana and PetroChina 50.1-49.9 joint venture (total CAD$4.4bn) to develop the Duvernay Formation in Alberta.[38]
- In November 2013, Talisman Energy sold 75% of its Montney Formation gas holdings to Petronas for CAD$1.5bn.[44] The transaction involves 127,000 acres.[45]
- In November 2013 Petronas 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.[46]
- 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.[47]
External links
References
- ^ "Alberta courts China as ‘key’ energy market in framework deal" 18 Oct 2013 Financial Post
- ^ a b [1]
- ^ [2]
- ^ [3]
- ^ Globe 28 Oct 2013 "Canada's slow oil, gas infrastructure development worry Chinese, minister says"
- ^ Text of the "World Trade Organization Agreement Implementation Act", SC 1994, c 47
- ^ "Thresholds for Review", Industry Canada
- ^ WTO membership list
- ^ "Ottawa moves to limit foreign investment reviews" CBC 25 May 2012
- ^ "Harper says clarity not needed on foreign takeover rules " G+M 8 Nov 2013
- ^ "Canadian Province Issues Offshore Yuan-Denominated Bonds" 5 Nov 2013
- ^ "Our Ministers"
- ^ "Dofasco recommends acceptance of Arcelor bid". CBC News. 2006-01-24.
- ^ "Abitibi, Bowater merging to create forestry giant". CBC News. 2007-01-30. Retrieved 2009-04-16.
- ^ G+M 30 Oct 2013 "U.S. Steel ends an era in Hamilton"
- ^ Financial Post: "How Xstrata won Falconbridge"
- ^ Bloomberg: "Vale Buys Control of Canadian Nickel Miner Inco" 24 Oct 2006
- ^ a b WSJ: "Chinese steel giant eyes Rio Tinto assets" 27 Sep 2013
- ^ G+M "The man behind the Teck-CIC deal" 3 Jul 2009
- ^ Nova Chemicals: "Company History and Development"
- ^ Financial Post: "Petronas completes $6-billion Progress Energy acquisition after deal gets Ottawa’s approval" 12 Dec 2012
- ^ Reuters: "CNOOC closes $15.1 billion acquisition of Canada's Nexen" 25 Feb 2013
- ^ "China's Sinopec takes $4.65-billion US stake in oilsands with ConocoPhillips buy". Vancouver Sun. 13 April 2010. Retrieved 1 April 2012.
- ^ "ConocoPhillips Sells Syncrude Stake to Sinopec". Press Release. RigZone. 25 June 2010. Retrieved 25 June 2010.
- ^ Offshore Technology: "Mizzen Prospect"
- ^ G+M "Husky, Statoil laud big offshore Canada oil find " 26 Sep 2013
- ^ investnorthwestbc.ca: "Arctos Anthracite Project (formerly Mount Klappan Anthracite Metallurgical Coal Project)"
- ^ Report on Business Magazine, Nov 2013
- ^ "Merit Mining Corp. Signs Subscription Agreement with Hong Kong Huakan Investment Co., Limited" 10 Apr 2010, Huakan press release
- ^ "Merit Mining Corp. Changes Name" 15 Dec 2010 Huakan press release
- ^ Bloomberg Businessweek "Company Overview of Hong Kong Huakan Investment Co., Ltd"
- ^ "HONG KONG HUAKAN INVESTMENT CO., LIMITED; Local Company" companies-hongkong.com
- ^ [ca.hotstocked.com/docs/show/huakan_international.../ew051410.pdf "EARLY WARNING REPORT PURSUANT TO NATIONAL INSTRUMENT 62-103"]
- ^ "About HD Mining International Ltd" company webpage
- ^ "B.C. coal mine has close ties to Chinese government, steelworkers say" 19 Dec 2012 Globe and Mail
- ^ "TransCanada Corp And Phoenix Energy Holdings Ltd. Form Joint Venture To Develop Grand Rapids Pipeline System" 29 Oct 2012
- ^ "Athabasca shares plummet as First Nation wins leave to appeal" G+M 18 Oct 2013
- ^ a b 13 Dec 2012, Financial Post: "Encana, PetroChina form joint venture to develop natural gas in Alberta"
- ^ "Ottawa approves Exxon Mobil’s $3.1-billion bid for Celtic Exploration " 20 Feb 2013
- ^ albertaoilmagazine.com: "ExxonMobil’s takeover of Celtic Exploration closes"
- ^ marketwatch.com 13 December 2012 "ArcelorMittal and Nunavut Iron Ore become equal partners in Baffinland"
- ^ "AltaGas Ltd. and Idemitsu Kosan Co., Ltd. Form Partnership to Pursue Opportunities to Export Energy From Canada" 29 Jan 2013
- ^ "INFORMATION BULLETIN: Triton LNG joins list of B.C. proposals" gov.bc.ca
- ^ "Foreign investment doesn’t need ‘absolute clarity': Harper" Toronto Star, 8 Nov 2013
- ^ 8 Nov 2013, Bloomberg "Talisman Sells Montney to Petronas for $1.4 Billion"
- ^ "Petronas moves to secure Asian market with natural gas megaproject" 17 Nov 2013 G+M
- ^ "Novelis sale to Reynolds could lead to job cuts" G+M 16 Dec 2013