Recent Developments in the Application of the Foreign Investment Review Act to the Oil Industry

Abstract

The author reviews recent developments relating to the Foreign Investment Review Act, in particular, the introduction of guidelines with respect to acquisitions of interests in oil and gas rights and Part II of the Act dealing with the establishment of new businesses. He discusses the basis of reviewability under the Act, how various transactions and activities are classified under the guidelines, and problems and deficiencies arising out of the resulting classification. He outlines the guidelines issued by the Agency that deal with the question of whether two businesses are related and comments on problems and implications arising from undertakings extracted by the Agency from applicants seeking approval of acquisitions. The writer views the most significant effect of the Act as encouraging companies to Canadianize and thereby comply with the Act by avoiding it. He accordingly reviews some possible ways to Canadianize. Finally, he outlines title problems created by the Act and counsel's duties regarding the applicability of the Act to the purchase and sale of Canadian Business Enterprise.