Investment Canada Act amendments come into force

Summary#

This Order sets September 3, 2024 as the day many parts of An Act to amend the Investment Canada Act come into force. Practically, it lets the government use new tools to review foreign investments for national security and clarifies what counts in the Act’s economic “net benefit” test.

What it does#

• Gives the Minister of Innovation, Science and Industry the power to extend certain national security reviews without needing a separate order from the Governor in Council. The Minister will consult the Minister of Public Safety when doing this.
• Lets the Minister impose short-term, interim conditions on an investment while a national security review is underway.
• Allows the Minister to accept and later release undertakings (promises) from investors to address national security concerns, instead of only using a Governor in Council order.
• Permits case‑specific disclosure of privileged information to a foreign government when it helps national security reviews.
• Makes clear the Minister may say that an order authorized an investment with conditions and may name the parties when issuing such orders.
• Requires notice to the National Security and Intelligence Review Agency and the National Security and Intelligence Committee of Parliamentarians when investments are allowed on undertakings or when the Governor in Council has used its authorities.
• Requires the Director of Investments to include details about the Minister’s use of these powers in the Annual Report.
• Clarifies that the “net benefit” factors may include intellectual property developed with government funding and the handling/protection of Canadians’ personal information.
• Allows the Crown to use closed court proceedings in judicial reviews where sensitive information must be protected.
• Makes various technical and timing clarifications (e.g., timelines for cultural investments, French wording alignment, cross‑references).

Who's affected#

• Foreign investors and their advisers who are planning acquisitions or control investments in Canada.
• Canadian companies that could be bought or otherwise controlled by non‑Canadians.
• National security and intelligence agencies involved in reviews.
• Oversight bodies and Parliamentarians who will receive new notices and reporting.
• Lawyers, bankers and consultants who handle cross‑border deals and regulatory filings.
• It is clear which instrument and sections come into force, but if you want to know whether a specific deal will be affected you may need legal or regulatory advice.

Why it matters#

• Reviews can move faster and be more flexible, because the Minister can extend reviews and set interim conditions without waiting for the full cabinet process.
• Transactions may be subject to new short‑term limits or to negotiated undertakings, which can change deal terms or timing.
• There will be more formal information sharing with foreign partners, which can help coordinated reviews but may raise confidentiality concerns.
• Investors should expect greater scrutiny of intellectual property developed with government support and of how Canadians’ personal data would be used or protected.
• The changes increase oversight and reporting, while also allowing closed proceedings to protect sensitive evidence—so some details of reviews may remain confidential even in court.
• Innovation, Science and Economic Development Canada is preparing guidance and processes to help stakeholders apply the new rules when they start on September 3, 2024.