As of August 2, 2022, foreign investors are able to file a voluntary notice where they otherwise would not be subject to mandatory notification or net benefit review. This applies to non-controlling or minority investments made by foreign investors that do not constitute an acquisition of control or the establishment of a Canadian business under the Investment Canada Act ("ICA").
The main objectives of the Regulations amending the National Security Review of Investments Regulations (the "Amendments") are to provide an option for foreign investors to obtain pre-implementation regulatory certainty regarding a national security review of investments that do not require filing under the ICA, and to enhance the review process by increasing the initial review period for which a filing is not mandatory.
The Amendments modify paragraph 2(c) and subparagraph 4(b)(iii) of the National Security Review of Investments Regulations for the category of investments that do not require filing as defined by paragraph 25.1(c) of the ICA, such that:
(a) if the foreign investor files a voluntary notification, the government has up to forty-five (45) calendar days to take the first step in the initial review process, either issuing a notice under subsection 25.2(1) of the ICA or make an order for national security review under subsection 25.3(1) of the ICA, or
(b) if the foreign investor does not file a voluntary notification, the government has up to five (5) years after the date of implementation of an investment to issue a notice under subsection 25.2(1) of the Act or make an order for national security review under subsection 25.3(1) of the Act.
The ICA has made effective on August 2, 2022 a new form to notify the acquisition of an entity(ies) or the establishment of a new business referred to in paragraph 25.1(c) of the ICA. Please click here to access the new form.
If you are unsure about the likelihood of your investments being subject to such a review, you should seek legal advice to ascertain these issues early on. Gardiner Roberts LLP's team of dedicated lawyers is competently positioned to provide counsel to and assist with such a review and the successful completion of any transaction if needed.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
