Question Period Note: INVESTMENT CANADA ACT

What is the Government doing about foreign investment in Canada?

• Canada is a first class investment destination. Foreign investments and trade fuel innovation and help businesses to succeed and grow, creating good, well-paying jobs and enabling economic growth that benefits all Canadians.

• The Investment Canada Act provides for the review of the most significant investments by non-Canadians to ensure their overall benefit to the Canadian economy. It also provides for the review of all foreign investments for national security concerns.

• Canadian businesses and foreign investors need certainty and transparency to plan their growth and investment strategies. We have increased the transparency of investment review processes by publishing national security guidelines and related review statistics in the Investment Canada Act Annual Report.
SUPPLEMENTARY MESSAGES ON NATIONAL SECURITY

• We never have and never will compromise Canada’s national security and will take action where necessary to protect national security.

• The Government's actions are based on facts and evidence, and the advice of Canada’s security and intelligence agencies.

IF PRESSED ON WHETHER CHINESE COMPANIES ARE BEING TARGETED

• The Investment Canada Act provides for the review of investments from non-Canadians, and is not country specific.

The Investment Canada Act (ICA or “the Act”) provides for the net benefit review of significant foreign acquisitions of control of non-cultural businesses by the Minister of Innovation, Science and Industry, as determined by a monetary threshold based on the value of the Canadian business. In 2020, the thresholds are: $1.075 billion in enterprise value (EV) for private-sector World Trade Organization (WTO) investors; $1.613 billion in EV for trade agreement investors (i.e., Australia, Chile, Colombia, the European Union, Honduras, Japan, Mexico, New Zealand, Panama, Peru, Singapore, South Korea, the United States and Vietnam); and $428 million in asset value (AV) for WTO state-owned enterprise (SOE) investors. The Minister of Canadian Heritage is responsible for net benefit reviews of cultural businesses, which are subject to different thresholds. Proposals are assessed according to the net benefit factors listed in Section 20 of the Act. The net benefit review process can last 75 days, or longer with the consent of the Minister and the investor.

The Act also provides for the national security review of all foreign investments. This process is undertaken in consultation with Canada’s national security and intelligence agencies. Information on the administration of the ICA national security provisions has been published in the ICA annual report since 2016. The national security review guidelines include a non-exhaustive list of factors that are considered in assessing the national security risks of a transaction and information on how to engage the regulatory process. If each stage of the process is engaged, a national security review can last 200 days, or longer with the consent of the Minister and the investor.

In 2018-19, there were nine net benefit applications made and approved and 953 notifications certified under the Act. These filings, in addition to other investments, which are not subject to the notification or application requirements in the Act, were subject to review by Canada’s national security agencies and the other investigative bodies prescribed in the National Security Review of Investments Regulations for potential national security concerns. During this period, there were seven Governor-in-Council (GIC)-ordered reviews resulting in three notices of no further action under the ICA, two withdrawals and two orders for divestiture.

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