It’s taken a little bit of reading between the lines but I think I have figured out the government’s intentions with respect to the Investment Canada Act. When Prime Minister Harper said in the Commons the day after the Potash decision was announced that the Act needed to be ‘reviewed’, he was not signaling legislative change. Instead, he was agreeing with Jack Layton that the Act needed to be studied and that he would be supportive of any ‘review’ conducted by a parliamentary committee. Presumably if the government liked the committee’s suggested changes and there were some areas of agreement with the opposition parties, legislative amendments could be introduced sometime in the future.
The Prime Minster must be aware that without a majority government significant changes to the Act will be difficult to stick handle unless it’s done through the budget process. This has been a tactic used by the Conservatives to improve the chances of legislative success in other policy areas, as opposition to budget measures triggers an election. So far no party has been willing to do that.
In the meantime, Minister Clement has been working on issuing some interpretive guidelines around the Act. Given the unparalleled undertakings that BHP Billiton made during their Potash transaction, there is a state of confusion in the business community about how net benefit is calculated. Minister Clement’s guidelines will be a welcome relief for companies looking for foreign capital. These guidelines should be out within the next couple of weeks so companies should not have to wait too long for more clarity.