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Political considerations and critical minerals strategy will be top of mind for Ottawa as it considers whether to approve a planned tie-up between Canada’s Teck Resources Ltd. and U.K.-based Anglo American PLC.
The proposed merger would create a $70 billion critical minerals giant at a time when Prime Minister Mark Carney’s government is keenly aware of the sector’s importance, including naming two mining sites among the first five major projects it aims to fast-track under new legislation.
The companies appear to have kept regulators in mind when hammering out the deal, which promises to keep the new entity’s headquarters in Vancouver and yield no net job losses. The question is whether this will be enough to help the deal go ahead after a review under the Investment Canada Act, which can be used to block deals deemed not in the national interest.
“The Investment Canada Act is sort of an exceptional regime created for specific types of circumstances where a transaction raises concerns that basically go to national interest,” said Jennifer Quaid, a professor in the civil law faculty at the University of Ottawa.
“What is recognized is that it’s basically a political decision.”
The review marks one of the first times the act has been used to scrutinize a merger since it was updated.
The federal government announced changes to the Investment Canada Act on March 5 to incorporate a consideration for deals that may undermine Canada’s economic security.
After the merger was announced, Industry Minister Mélanie Joly said in a statement that the government will look at various issues, including the Vancouver headquarters, job creation and employment, capital expenditures and Indigenous participation.
Meanwhile, Carney emphasized the government’s critical minerals strategy on Thursday when two of the five priority projects announced were copper-focused. He said that critical minerals and mining are sectors of national interest with the potential to diversify markets.
Quaid noted the final call on approval is “discretionary,” made from a holistic analysis by the minister after being informed by other experts around them. She said the minister would have to decide whether a merger is in Canada’s interest and consider factors outside typical competition concerns.
“It’s supposed to be a political decision made in Canada’s interest, in the public interest, but it is ultimately a decision made by a minister who’s accountable to parliament, and it’s accepted that there will be probably competing interests that have to be weighed,” she said.
Since the merger would create a copper giant, the government will have to consider how the deal will fit into its overall critical minerals strategy.
“The government has previously made policy statements suggesting it was only going to approve these types of deals in exceptional circumstances,” said David Rosner, a lawyer specializing in competition and foreign investment at Goodmans.
“But we do not know what those exceptional circumstances are or whether this deal would satisfy the government in that regard.”
Factors listed for consideration under the Investment Canada Act include the impact on economic activity as well as employment and resource processing, the participation by Canadians in the business in question, and the effect on productivity and competition. Other considerations include the compatibility of the investment with national industrial policies and the contribution of the investment to Canada’s competitive standing in global markets.
“The preservation or creation of both jobs in Canada and the involvement of Canadians in the management of the business is an important consideration for the government, but it is one of several factors and not determinative,” Rosner said.
According to Quaid, the act looks at ensuring that a transaction benefits the Canadian economy.
“The primary objective is to make sure that foreign ownership doesn’t end up hollowing out the Canadian economy, but also, there is a central consideration linked to national security, which is one of those black box terms,” she said.
Ensuring that transactions are in Canada’s economic interest is a “recognition that Canada is a middle power” and needs to be mindful of losing influence to outside entities, Quaid said.
“It’s trying to make sure that we don’t just allow the free market to just make us into some sort of vassal state to other economic powers.”
Despite any potential concerns regarding foreign ownership, Teck and Anglo American have framed the deal as a “merger of equals,” even though Anglo American is worth more than double Teck.
Rosner said the government tends to focus less on the framing of a deal and more on its substance.
The deal would also see the company headquarters of what would be known as Anglo Teck be in Vancouver, a commitment the company said in a press release would remain “indefinitely.”
“Companies make all kinds of promises, which are basically at the end of the day unenforceable when you get a couple of years out. So they might promise, but they might move it later,” Quaid said.
As Ottawa scrutinizes the deal, Quaid said it will also have to consider the implications of not approving it.
“Some people suggest that it’s just a matter of time before Teck gets snapped up,” Quaid said.
This report by The Canadian Press was first published Sept. 12, 2025.
— With files from Ian Bickis and Lauren Krugel
Companies in this story: (TSX:TECK. B)
Daniel Johnson, The Canadian Press
