Question Period Note: INVESTMENT CANADA ACT – UPDATED NATIONAL SECURITY GUIDELINES

What are the updated guidelines? Why is the Government taking this action?

• Foreign investment fuels innovation and helps businesses enabling economic growth that benefits all Canadians.

• The Government of Canada has updated these guidelines to provide increased transparency and certainty for Canadian businesses and investors.

• We have a responsibility to ensure that foreign direct investment does not bring with it national security threats.

• This update specifically addresses national security concerns relating to investments involving potentially sensitive technologies, sensitive personal data and the security of critical mineral supply chains.

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

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.

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, and the ICA National Security guidelines, which were first published in 2016. The updated 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.

The updated guidelines include additional information on potentially sensitive technology areas, sensitive personal data and on critical minerals. The guidelines do not change any existing authorities under the Act. The update follows the April 2020 Covid-19 Policy Statement on the enhanced scrutiny of certain investments, which will remain in place until the economy recovers from the pandemic. The updated guidelines indicate that the enhanced scrutiny for all investments by SOEs and private investors assessed as being closely tied to or subject to direction from foreign governments, originally announced in the Covid-19 policy statement, will continue.