National security provisions of the Investment Canada Act amended to create voluntary filing option

August 22, 2022 | Eric Dufour, Reema Mahbubani

As of August 2, 2022, the national security provisions of the Investment Canada Act (the “Act”) allow foreign investors who do not have a filing obligation under the Act to receive regulatory certainty that the transaction, as it pertains to Canada, will not be challenged on national security grounds.

Under the Act, any investment by a foreign investor to establish a new Canadian business or acquire control of a Canadian business, is subject to mandatory filing requirements. Further, any direct or indirect investment in a Canadian business by a foreign investor, regardless of the size of the Canadian business, or the level of investment, is subject to the Act’s national security provisions.

The new filing option provides foreign investors contemplating minority investments in Canadian businesses an opportunity to address the national security review risk prior to closing. It is important to note that if a foreign investor chooses not to make a voluntary filing, the Canadian government may challenge the investment up to five years post-closing.

As part of the voluntary filing, information regarding the foreign investor and its ultimate controller will be required, along with other information regarding the target and nature of the investor. Interested readers can download a copy of the form by visiting the government’s website.

Within 45 days of submitting a “complete” filing, foreign investors will be informed of whether the Canadian government views the investment as a national security risk and the likelihood of it being challenged on national security grounds.

Should you have any questions regarding this bulletin or require further information, please do not hesitate to contact the authors of this article.


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