ANNOUNCEMENT 18 Apr 2020

On 18 April 2020, the government of Canada announced a policy statement concerning foreign investment screening process during the Covid-19 pandemic.

NUMBER OF INTERVENTIONS

2

  • 2 harmful
  • 0 neutral
  • 0 liberalising

SOURCE

Government of Canada, Investment Canada Act, Ministerial Statements, “Policy Statement on Foreign Investment Review and COVID-19”. Available at: https://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/lk81224.html

Government of Canada. News release "Minister Champagne highlights updated guidelines on national security review of foreign investments". 24/03/2021. Available at: https://www.canada.ca/en/innovation-science-economic-development/news/2021/03/minister-champagne-highlights-updated-guidelines-on-national-security-review-of-foreign-investments.html

Government of Canada. Investment Canada Act Guidelines: "Guidelines on the National Security Review of Investments". 24/03/2021. Available at: https://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/lk81190.html

Inception date: 18 Apr 2020 | Removal date: open ended

FDI: Entry and ownership rule

On 18 April 2020, the government of Canada published a policy statement concerning the foreign investment screening process during the Covid-19 pandemic. According to the announcement, the government will subject certain foreign investments into Canada that are related to public health or involved in the supply of critical goods and services to “enhanced scrutiny” under the Investment Canada Act (ICA).

It is stated in the announcement that the value of many Canadian businesses has declined as a result of the Covid-19 pandemic. These unique circumstances may lead to opportunistic investment behaviour by foreign investors. For this reason, the Canadian government decided to increase the scrutiny of investments of any value in Canadian businesses that are related to public health or involved in the supply of critical goods and services.

Similarly, the Canadian government increased the scrutiny of foreign investments by state-controlled companies. For details, please see related intervention.

This enhanced scrutiny of certain foreign investments under the ICA will apply until the economy recovers from the effects of the COVID-19 pandemic.

 

AFFECTED SECTORS

 
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Inception date: 18 Apr 2020 | Removal date: open ended

FDI: Entry and ownership rule

On 18 April 2020, the Canadian government announced a policy statement concerning the foreign investment screening process during the Covid-19 pandemic. According to the announcement, the government will subject certain foreign investments into Canada to “enhanced scrutiny” under the Investment Canada Act (ICA).

It is stated that some investments into Canada by state-owned enterprises may be motivated by “non-commercial imperatives” that have the potential to damage the economic and national security interests of Canada. For this reason, the Canadian government decided that, regardless of their value, foreign investments by investors that have a direct or indirect link to a foreign government will be subject to enhanced scrutiny under the Investment Canada Act.

This enhanced scrutiny of certain foreign investments under the ICA will apply until the economy recovers from the effects of the COVID-19 pandemic.

Update

On 24 March 2021, the government made "enhanced scrutiny" of state-owned enterprises' foreign investment permanent as a part of the National Security Review of Investments. The FDI screening guidelines cover all types of foreign direct investment, including establishing a new business in Canada, acquiring a share in the local business, or acquiring control of a company operating in the country. 

 
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