The Director of Investments recently issued his Investment Canada Act Annual Report for the fiscal year ended March 31, 2020.  During that fiscal year, a total of 1,032 applications for review and notifications were certified under the Investment Canada Act, being an all time high for such filings.  Of these filings, 255 were in respect of proposals to establish new businesses in Canada.  The balance of the filings were in respect of foreign acquisitions of control of existing Canadian businesses.

Net Benefit Reviews

Of the 1,032 filings, only 9 investment proposals were of sufficient size to require Ministerial clearance under the Investment Canada Act.  To obtain Ministerial approval, non-Canadian investors are required to demonstrate to the satisfaction of the Minister of Innovation, Science and Economic Development that their investment proposals will likely be of “net benefit to Canada” – essentially an evaluation of the potential economic benefits that such foreign ownership could generate for Canada.

Those 9 reviews required an average of 87 days from certification to completion.  All 9 investments were approved by the Minister as likely being of net benefit to Canada.

National Security Reviews

All of the 1,032 investment filings made under the Investment Canada Act and an unknown number of additional investments by non-Canadians that, because they did not represent acquisitions of control of Canadian businesses and, as such, did not require a filing under the Investment Canada Act, were scrutinized by Canada’s national security and intelligence agencies under the national security provisions of the Investment Canada Act during the same period.  (Other federal legislation, such as the Bank Act and the Insurance Companies Act, also provide for certain investments to be considered from a national security perspective. The statistics in the Annual Report do not include these reviews.)

Only 7 of the non-Canadian investments that were subjected to national security scrutiny were ordered under section 25.3 of the Investment Canada Act to go through a formal national security review.  The average review period for those 7 reviews was 217 days from the date of certification to conclusion.

Of those 7 investments ordered to go through a formal national security review, 3 were abandoned by the non-Canadian investors prior to the formal national security review being completed, 3 non-Canadian investors received orders to divest of their investments and 1 investment was cleared.

While the Investment Canada Act protects the confidentiality of the foreign investors and their specific investment proposals, the Director of Investments provided the following information with respect to countries of origin of the investors, industry sectors involved and the decisions made:

Origin Industry Sector Resolution
China Machinery, equipment and supplies merchant wholesalers Divestiture
France Support activities for air transportation Divestiture
United Kingdom Activities related to credit intermediation Withdrawal
Belarus Computer systems design and related services No further action under the ICA
China Computer systems design and related services Withdrawal
China Scientific research and development services Divestiture
Luxembourg Administrative and support, waste management and remediation services Withdrawal


While very few investments result in national security reviews (less than 0.7 % of all filings), if a national security review is ordered, the review process will be a lengthy one and there will be considerable uncertainty regarding whether the proposed investment will be allowed to proceed.  Further, while there may be a general impression that only Chinese investments attract national security attention, this was not the case in 2019/20, as only 3 of the 7 investments that were subjected to national security review originated from China.

Given that the COVID-19 pandemic started at the end of the time period covered by this Annual Report, the Annual Report does not provide any insight into the impact, if any, that the pandemic has had on the clearance times and, more importantly, on the Canadian government’s view as to which types of investments will merit the attention of its national security and intelligence agencies going forward.  The Annual Report for the 2020/21 fiscal year should provide greater insight into whether the pandemic has had the effect of increasing Canada’s scrutiny of foreign investments.