Canada ready to raise threshold on foreign takeovers to $1.5B for Europe

OTTAWA – The Harper government has agreed to smooth the way for more takeovers of Canadian companies by European firms in one of several concessions during free-trade talks, sources tell The Canadian Press.

With Prime Minister Stephen Harper still hoping to sign a deal in principle while in Europe over the next several days, sources say Canadian negotiators have agreed to a provision to raise the threshold for reviewing foreign acquisitions from Europe to $1.5 billion.

All acquisitions under that value would not be subject to a government assessment about whether they create a net benefit for Canada.

The proposed change comes just after the House of Commons passed the budget implementation bill that raises the threshold for automatic review from the current $334 million to $1 billion over the next four years.

Intense talks, especially over the last few weeks, have brought the two sides together on several issues, the sources say.

Canada has significantly moved to appease European demands for opening up provincial energy utilities, particularly in Ontario and Quebec, for procurement of foreign goods and services.

On autos, rules-of-origin concerns have been resolved to Europe’s satisfaction.

As well, Canada is prepared to give Europeans more market access in protected sectors such as telecommunications, which has restrictions on foreign ownership, as well as uranium mining, postal services and insurance.

Overall, the two sides say they will completely eliminate all industrial tariffs within seven years, a measure that will save Canadian exporters $213 million annually — and European exporters $635 million — at current exchange rates.

While negotiations have closed the gaps on some issues, sources say they remain apart on several others, particularly agriculture and urban transit project procurement.