Melanie Aitken, co-chair of competition, antitrust and foreign development at Bennett Jones
With the world’s longest and most commerce-active border, the United States and Canada have maintained an intimate relationship for over two centuries. A shared cultural heritage, trade necessities and proximity have meant that the two nations have grown up together, and by virtue of this, have grown to rely heavily on one another.
“It’s’ very hard to find a substantive client in the United States that doesn’t have a Canadian operation or vice versa… The fact of the matter is that many of them act like there isn’t a border there. If you look, for example, at the Fortune 500, of those 500, more than 450 have operations on both sides of the border, and of those 450, 90 percent of them talk about North American operations, not Canadian operations versus U.S. operations,” says Joe Andrew, global chair of Dentons.
Melanie Aitken, co-chair of competition, antitrust and foreign development at Bennett Jones says, “The issue of foreign investment review has attracted disproportionate attention recently, and for good reason. The government’s enhanced interest is largely driven by concerns around SOE (State Owned Enterprises) investors and, plainly, Chinese government players. The government is concerned to probe whether the proposed investors are directly or indirectly influenced by their government, particularly when they are looking to invest in Canadian resources or infrastructure that might touch on sensitive networks.”
Perhaps the best known rejection of an SOE seeking to purchase a Canadian asset came in 2010, when Australian mining corporation BHP Billiton made a bid of close to $40 billion to acquire the Potash Corp. of Saskatchewan. A vital ingredient in fertilizer and one of the provinces largest sources of income, the potash reserves were deemed a “strategic resource” and the deal was struck down by the Canadian government.
While the permeable membrane between the U.S. and Canada may encourage the proliferation of commerce, for the legal department, that story of reliance and common interest doesn’t always translate to ease in business dealings.