Government of Canada to modernize the Investment Canada Act
New bill represents the most significant update of the ICA in more than a decade and will address evolving national security concerns
December 7, 2022 – Ottawa, Ontario
Canada has an open economy and is an attractive destination for foreign investments. At the same time, the world is evolving and challenges that could endanger both our national security and prosperity require new tools to not only protect our interests and our assets but also keep us safe. That is why the Government of Canada is tabling legislation to modernize the Investment Canada Act (ICA). These changes will help align the Act with changing global dynamics and enable it to be more agile.
Today, the Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry, announced the introduction of the Act to amend the Investment Canada Act, also known as the National Security Review of Investments Modernization Act. This new bill represents the most significant update of the ICA since the introduction of the national security review process in 2009 and is introducing new tools to ensure that Canada can continue to address changing threats that may arise from foreign investments.
The proposed amendments to the Investment Canada Act under the new bill include:
- New filing requirement prior to the implementation of investments in prescribed business sectors;
- Authority for the Minister to extend the national security review of investments;
- Stronger penalties for non-compliance;
- Authority for the Minister to impose conditions during a national security review;
- Authority for the Minister to accept undertakings to mitigate national security risk;
- Improved information sharing with international counterparts; and
- New rules for the protection of information during the course of judicial review.
The government is determined to continue working with Canadian businesses to attract foreign direct investments from partners that share our interests and values. Today’s modernization efforts will further enhance transparency in the ICA national security review process, while ensuring that the government is able to take action quickly where required. The government will continue to do everything it can to see more economic growth and more Canadian jobs, without compromising our national security or interests.
“While our government continues to welcome foreign direct investment, we need to be vigilant and protect Canadian interests. These new amendments will help bring the Act in line with today’s reality, while ensuring we can work at the speed of business. We will continue to work toward an updated ICA framework that ensures Canada’s continued prosperity and, at the same time, continue to act decisively when investments threaten our national security.”
– The Honourable François-Philippe Champagne, Minister of Innovation, Science and Industry
Canada benefits significantly from foreign investment as an important source of capital and technology. Recognizing the importance of protecting national security, the Investment Canada Act provides for:
- the review of significant investments in Canada by non-Canadians in a manner that encourages investment, economic growth and employment opportunities in Canada; and
- the review of investments in Canada by non-Canadians that could be injurious to national security.
In fiscal year 2021–22, 24 investments were subject to extended national security reviews.
In fiscal year 2021–22, no investments were blocked under the ICA. However, in the previous year, three were subject to orders under section 25.4 of the Act (two divestiture orders and one blocked transaction).
So far in fiscal year 2022–23, three investments in critical minerals were subject to divestiture orders.
The proposed amendments to the ICA will make the national security review process more efficient and flexible and will allow the Minister to order the further review of investments under section 25.3 of the Act, in place of the Governor in Council.
The Act will ensure that the national security review of certain transactions in prescribed sectors can occur before potential injury to national security by requiring investors to file notifications in time periods set out in regulation.
The changes to the ICA will update the penalties for non-compliance and provide authority to update these penalties in the future.
The Act will facilitate international cooperation and information exchange with allies on national security threats.
Senior Manager, Communications
Office of the Minister of Innovation, Science and Industry
Innovation, Science and Economic Development Canada
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