Ottawa moves to guard businesses against hostile takeovers during trade war
Canada’s Industry Minister Francois-Philippe Champagne is taking action to protect Canadian businesses from what he describes as “predatory investment behavior” amidst the ongoing trade war with the United States. In a statement posted on the social media platform X, Champagne expressed concerns about the impact of the sweeping tariffs imposed by U.S. President Donald Trump on Canadian businesses.
He warned that the rapidly changing trade environment could lead to a decline in the valuations of Canadian businesses, making them vulnerable to opportunistic or predatory investment from foreign entities. Champagne emphasized that if essential Canadian firms are compromised, it could pose a threat to the country’s economic security.
To address these concerns, Champagne announced plans to update the Investment Canada Act (ICA) to include economic security as a key consideration when evaluating proposed deals. The ICA is a tool used by the Canadian government to assess whether foreign investments will benefit the country’s economy. While the act already requires the government to assess national security implications of investments, Champagne stressed that economic security is integral to national security.
The proposed changes to the ICA would empower Canada to reject foreign investments that could harm the Canadian economy or workers, striking a balance between attracting foreign investment and protecting national interests. This move comes in response to the recent imposition of tariffs by the U.S. on Canadian goods, including a 25% tariff on most products and a 10% levy on energy exports, prompting retaliatory tariffs from Canada.
In a related development, U.S. Commerce Secretary Howard Lutnick indicated in an interview on Bloomberg TV that President Trump is expected to make an announcement regarding tariffs on Canada and Mexico later in the day. The ongoing trade tensions between Canada and the U.S. have underscored the importance of safeguarding Canadian businesses and economic interests against external threats.
