Ottawa, October 2 - There has been a rise in global instability over the past two years, and with the increased influence of state-owned enterprises and crown corporations, the Canadian Federal Government passed Bill C-34 to amend the Investment Act of Canada. Being granted Royal Assent on March 22, 2024, this legislation came into force on September 3, 2024. Seeking to place greater protection surrounding sensitive industries from foreign control, this emendation aims to fortify Canada’s investment review process by closing loopholes and enhancing revision powers. 

When the Investment Canada Act was approved in June of 1985. It was meant to allow for the protection of national security using a review of significant investments in Canada by non-Canadians while encouraging economic growth. With new developments in technology, banking and increased security threats, the Act required amendment. This allowed for the introduction of new tools, according to the Government of Canada's National Security Review of the Modernization of the Act. One of the most significant additions is the requirements of Pre-Closing Filling requirements on qualifying investments in fields such as artificial intelligence or critical minerals providing scope for enhanced government review. The review process has been broadened to include asset acquisitions along with government authority to initiate net benefit reviews of crown corporation investments and infusions by countries with which Canada does not have trade agreements, such as China and Russia. 

The review comes in response to growing global tensions which led to federal officials deeming the amendment necessary to address vulnerabilities in the review process. 

For investors, the new requirements will lead to inspection into trades relating to industries deemed as high-risk or sensitive. For nations lacking preferential trade agreements, this will result in increased complications and restrictions in the process.

The Minister of Innovation, Science, and Industry Francois-Philippe Champagne stated that “Canada is one of the top destinations for foreign investments worldwide. While our government is committed to working with businesses to attract investments and to create greater economic opportunity for all Canadians, we will not hesitate to take action on transactions that could harm Canada’s national and economic security. By modernizing the Investment Canada Act, we are making sure we have the right tools to protect Canada’s interests and economy while bringing the foreign investment review regime in line with today’s reality”. This new bill aims to reform the previously outdated procedures, giving Canadian businesses a new means of protection from foreign command and enhancing domestic growth.

Works Cited:

“34, 44th Parliament, 1st Session Monday, November 22, 2021, to Present.” C, www.parl.ca/legisinfo/en/bill/44-1/c-34. Accessed 1 Oct. 2024.

Innovation, Science and Economic Development Canada. “The National Security Review of Investments Modernization Act Receives Royal Assent.” Canada.Ca, Government of Canada, 27 Mar. 2024, www.canada.ca/en/innovation-science-economic-development/news/2024/03/the-national-security-review-of-investments-modernization-act-receives-royal-assent.html.

Innovation, Science and Economic Development Canada. “Updated Backgrounder: An Act to Amend the Investment Canada Act.” Canada.Ca, Government of Canada, 27 Mar. 2024, www.canada.ca/en/innovation-science-economic-development/news/2022/12/an-act-to-amend-the-investment-canada-act.html.