Investment Canada Act

Marginal note:Rules respecting control of entities

• 26 (1) Subject to subsections (2.1) and (2.2), for the purposes of this Act,

  • (a) where one Canadian or two or more members of a voting group who are Canadians own a majority of the voting interests of an entity, it is a Canadian-controlled entity;

  • (b) where paragraph (a) does not apply and one non-Canadian or two or more members of a voting group who are non-Canadians own a majority of the voting interests of an entity, it is not a Canadian-controlled entity;

  • (c) where paragraphs (a) and (b) do not apply and a majority of the voting interests of an entity are owned by Canadians and it can be established that the entity is not controlled in fact through the ownership of its voting interests by one non-Canadian or by a voting group in which a member or members who are non-Canadians own one-half or more of those voting interests of the entity owned by the voting group, it is a Canadian-controlled entity; and

  • (d) where paragraphs (a) to (c) do not apply and less than a majority of the voting interests of an entity are owned by Canadians, it is presumed not to be a Canadian-controlled entity unless the contrary can be established by showing that

    • (i) the entity is controlled in fact through the ownership of its voting interests by one Canadian or by a voting group in which a member or members who are Canadians own a majority of those voting interests of the entity owned by the voting group, or

    • (ii) in the case of an entity that is a corporation or limited partnership, the entity is not controlled in fact through the ownership of its voting interests and two-thirds of the members of its board of directors or, in the case of a limited partnership, two-thirds of its general partners, are Canadians.

• Marginal note:Trusts

  (2) Subject to subsections (2.1) and (2.2), where it can be established that a trust is not controlled in fact through the ownership of its voting interests, subsection (1) does not apply and the trust is a Canadian-controlled entity where two-thirds of its trustees are Canadians.

• Marginal note:Minister may determine

  (2.1) Where an entity that carries on or proposes to carry on a specific type of business activity that is prescribed for the purposes of paragraph 15(a) qualifies as a Canadian-controlled entity by virtue of subsection (1) or (2), the Minister may nevertheless determine that the entity is not a Canadian-controlled entity where, after considering any information and evidence submitted by or on behalf of the entity or otherwise made available to the Minister or the Director, the Minister is satisfied that the entity is controlled in fact by one or more non-Canadians.

• Marginal note:Minister may declare

  (2.2) Where an entity referred to in subsection (2.1) has refused or neglected to provide, within a reasonable time, information that the Minister or the Director has requested and that the Minister considers necessary in order to make a decision under that subsection, the Minister may declare that the entity is not a Canadian-controlled entity.

• Marginal note:Retroactivity possible

  (2.3) A determination made under subsection (2.1) or a declaration made under subsection (2.2) may be retroactive to such date, not earlier than June 19, 1992, as the Minister specifies, in which case the determination or declaration shall, for all purposes of this Act, be deemed to have been made on the date so specified.

• Marginal note:Entity to be informed

  (2.4) The Minister shall forthwith inform the entity concerned, in writing, of any determination made under subsection (2.1) or declaration made under subsection (2.2), and of any date specified under subsection (2.3).

• Marginal note:Where corporation deemed to be Canadian

  (3) Where, after considering any information and evidence submitted by or on behalf of a corporation incorporated in Canada the voting shares of which are publicly traded in the open market, the Minister is satisfied that, with respect to the corporation,

  • (a) the majority of its voting shares are owned by Canadians,

  • (b) four-fifths of the members of its board of directors are Canadian citizens ordinarily resident in Canada,

  • (c) its chief executive officer and three of its four most highly remunerated officers are Canadian citizens ordinarily resident in Canada,

  • (d) its principal place of business is located in Canada,

  • (e) its board of directors supervises the management of its business and affairs on an autonomous basis without direction from any shareholder other than through the normal exercise of voting rights at meetings of its shareholders, and

  • (f) the circumstances described in paragraphs (a) to (e) have existed for not less than the twelve month period immediately preceding the submission of the information and evidence,

  the corporation shall be deemed to be a Canadian for the purpose of making any investment described in subsection 14(1), except an investment falling within a prescribed specific type of business activity that, in the opinion of the Governor in Council, is related to Canada’s cultural heritage or national identity, and the Minister shall so notify the corporation.

• Marginal note:Proof

  (4) The Minister may accept, as proof of the circumstances described in paragraphs (3)(e) and (f), a written statement by the corporation to that effect, signed by all the members of its board of directors.

• Marginal note:Duration of presumption

  (5) If the material facts submitted by or on behalf of the corporation are accurate, the presumption under subsection (3) applies, from the date of the notification by the Minister referred to in that subsection, for so long as those material facts remain substantially unchanged or for two years from the date of that notification, whichever period is shorter.

• Marginal note:Equal ownership

  (6) Where two persons own equally all of the voting shares of a corporation and at least one of them is a non-Canadian, the corporation is not a Canadian-controlled entity.