Canada beefs up its foreign investment rules

The government is looking to implement new rules under the Investment Canada Act that would require foreign actors to give advanced notice of investments in sectors deemed as “sensitive” and subject those investments to conditions from Canada’s industry minister. 

  • Right now, foreign investors aren’t required to notify the government of planned investments or acquisitions until 30 days after the investment has closed. 

The feds didn’t say exactly what sectors will be affected by these changes, but the industry minister did confirm that critical minerals, quantum computing, and AI would all be covered. 

Why it matters: Though China isn’t mentioned in the proposal, experts are reading between the lines. Many believe stricter foreign investment rules are yet another move to put a fence around Canada’s emerging critical minerals sector to keep out Chinese state-owned firms. 

Zoom out: By some accounts, China has done a much better job capitalizing on Canada’s critical minerals sector than Canada, spending ~$90 billion since the 2000s to stake its claim in the industry. Canada’s only operating lithium mine is still owned by a Chinese company. 

Yes, but: Some are skeptical over how impactful the rules will really be, with one trade lawyer telling The Globe, “It reads tough, but in reality, I can’t see how this would have changed the outcome of any [recent] major decision… it’s mostly housekeeping.”