In this Update
On February 21, 2017, the Government of Quebec (the Government) released a Plan to Strengthen the Quebec Economy as an Executive-Driven Economy (the Plan).
The Plan puts forward measures intended both to assist with the growth of Quebec-based companies with head offices in the province and to ensure that Quebec-based interests are as well positioned as possible to participate in change of control transactions.
Several measures are of particular relevance to parties considering M&A opportunities in Quebec, most notably:
The Plan announces the creation of a Financial Initiatives Group designed both to monitor developments that could affect the ownership of Quebec companies and to guide the Government in its efforts to ensure that the capital needs of Quebec's growing companies are met in a way that helps foster the emergence of more large Quebec-based businesses with head offices in the province.
The Plan makes clear that the Government does not intend to amend the existing legal framework governing hostile takeover bids and defensive tactics, but instead, intends to work to enhance the understanding that boards and executives in the province have of the existing legal framework and the way it can be used to reduce the risk of being on the receiving end of a hostile bid.
The Plan also contains a number of fiscal measures designed to harmonize the treatment of stock options with the approach taken in other Canadian provinces and to facilitate intergenerational transfers of businesses.
Reacting to concerns expressed for some time in Quebec that too many of the province's flagship companies are being acquired by interests outside the province, on February 21, 2017, the Government of Quebec (the Government) released a Plan to Strengthen the Quebec Economy as an Executive-Driven Economy (the Plan).1 The Government initially notes that in the last 15 years Quebec companies purchased twice as many foreign companies as the number of Quebec companies that were sold to foreign interests and that, between 2000 and 2014, 171 Quebec companies joined the ranks of corporations with gross annual revenues of over $1 billion while 75 fell off that list. Nevertheless, the Government has been under sustained political pressure to respond to critics calling on it to do more to preserve head offices and to prevent strategic corporate jobs from being moved out of Quebec.
The Plan puts forward a package of measures that seek to achieve a balance between, on...